Consultancies posted significant growth in the 2005 through 2007 period. Major consulting firms are hiring again—stalking the ivy-covered halls of America’s best business school campuses in search of the best and brightest new MBAs. The fact that new graduates will have trouble getting jobs in the financial and banking industry in 2008 will be a boost to recruiters at consulting companies. However, a question looms about consulting firms’ ability to grow and hire in 2008 in light of the latest economic slowdown and shrinking corporate budgets. Government budgets are under pressure as well, particularly at the state level where large deficits loom. Big corporations and governmental agencies are prime clients for consultancies. Outside the U.S., the consulting industry and related sectors have been booming. However, the slowdown of 2008 will temper that growth. Until recently, global business growth from Europe throughout North America to Asia/Pacific were fueling demand for consulting of all kinds, including management consulting, HR consulting, industrial consulting and technology consulting. Meanwhile, many types of consulting and accounting projects are being offshored. Initially this was due to efforts by firms in North America and Europe that wanted to take advantage of lower hourly fees. To a growing degree, however, offshoring of such tasks is becoming. Certain trends have impacted the industry, changing the face of consulting. Some examples include:

1) Consulting Firms Accept Assignments with Contingency Fees.

With the understanding that today, more than ever, corporate clients want fast results and a high return on investment in consultants; many major consulting firms are accepting contingency payment for part of their fees. This practice recognizes the fact that client companies are taking big risks and facing large fees when hiring consultants.

2) Government Consulting is Strong, Including IT, Transportation, Defense and Security.

America’s emphasis on homeland security post-9/11 has led to a rapid ramp-up of spending for products and services in relevant areas, particularly consultancies with expertise in security, surveillance, intelligence and related infrastructure.

3) Offshoring to India Drives Changes in Global Consulting.

U.S. domestic employment figures paint a grim picture in some industries due to “offshoring,” or the movement of jobs to other countries in order to cut costs. India is creating both the largest problem and the largest opportunity for consulting companies based in the U.S. and Europe.

To find out more about these exciting trends and others, check out Plunkett’s Consulting Industry Almanac 2008, or go to www.plunkettresearch.com and sign up for a subscription to Plunkett’s completely up-to-date online database!

About Plunkett Research, Ltd.

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