The Road to 9%: How the Consulting Industry Is Recovering

The Road to 9%: How the Consulting Industry Is Recovering
4 February 2021 Marina Hercka
In Journal

Talk of cautious optimism has been prominent in recent press and, as we at Patrick Morgan have observed, there is plenty of cause for such an attitude in the consulting industry—the Management Consultancies Association examines the market every year. At the beginning of 2020, before the COVID-19 pandemic threatened the world’s health and economy, it “suggested that the industry would see […] growth of just 4% through 2020 [in the UK], in what at the time seemed like a grave warning.” Why? Numbers from previous years already indicated that the industry was growing “at its slowest rate since 2012-2013, when the market was still on the recovery path from a recession the year before.”

Then, of course, the looming danger of an emerging virus enforced hiring freezes, stalled expansion efforts, and caused serious concern for the long-term survival of some firms in the market. The 4% figure started to seem outlandish, as most of us would have been perfectly content opening 2021 with little to no decline. At this momentous point in the process of rebuilding, however, “the news that by the [MCA’s] reckoning the British consulting market actually expanded by 2.5% is likely to be met with jubilation in some quarters.” That, it certainly has, not least because the MCA has also predicted a 9% growth in 2021.

Despite current and upcoming obstacles—notwithstanding Brexit anxieties—we’ve seen previously discarded hiring plans come back into effect, geographical expansion back on the table, and previously impossible strategising about the future become an important talking point again. Positive data, both economical and scientific, as the vaccine is rolled out, has fed a certain sense of optimism, which is vital in making necessary efforts to reach those figures at the end of the year—that 9%. Further, due to its wide reach into the many sectors it covers, progress in consultancy also requires—and drives—innovation across the board.

This is not to limit the conversation to the UK market—in fact, in March of 2020, Brexit-related shifts in UK attitudes saw the rest of Europe in much better standing. Based on data from Sources Global Research, “Europe now represents a 29% share of the global consulting market, […] a share which remained stable in 2019.” Specifically, “the German-speaking countries of Germany, Austria, and Switzerland (known as DACH) are, combined, Europe’s largest region by revenue, generating to the tune of €12 billion in fees […].” Looking to the future, a Business Market Insights report predicts that the industry will grow “from US$ 8.7Bn in 2017 to US$ 17.08Bn by the year 2025. This represents a CAGR of 8.9% from the year 2018 to 2027.” The sectors experiencing the most growth the fastest are intuitive—for instance, Simon-Kucher & Partners “has appointed seven new partners in its global Life Sciences practice, four of which are based in the firm’s European offices,” including one in Frankfurt and one in Zurich, underlining the potential of the DACH region. The Life Sciences and Healthcare sector has been at the top of many lists of priorities, especially when it comes to hiring efforts at senior levels.

Overall, the start of 2021 has seen positive changes in the consulting market, in the UK as well as the rest of Europe, and has promised even further development over the next few years, as pandemic fears are gradually assuaged. From the conversations we at Patrick Morgan had with clients and candidates alike—and from the work we’re undertaking—we’ve gathered an optimistic sentiment similar to the general consensus. Innovative recovery and proactive efforts to build a stronger economy in the aftermath of the COVID-19 pandemic will drive the market forward. Through cross-border collaboration and playing to each region’s and sector’s strengths, consulting firms can maintain the encouraging progress we’ve seen so far, while striving always for more and better on the road to 9%, and further.

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