Global consulting industry revenues (including
HR, IT, strategy, technical, operations, management and business advisory
services) will be about $491 billion in 2018, according to Plunkett Research
estimates.
This represents reasonable
growth from $488 billion during the previous year.
In the U.S., consulting of all types, including
management, scientific and technical, generated $264.7 billion during 2017, up
from $254.8 billion the previous year.
Accounting and related services (such as tax return preparation)
generated an additional $175.4 billion in 2017, up from about $167.6 billion
during 2016, according to the U.S.
Bureau of the Census.
In recent years, corporate profits in general have
grown dramatically, meaning that executives are reasonably willing to authorize
new consulting projects, as long as they see the potential for a good return on
the cost.
For example, India's leading
consultancies have recently enjoyed substantial growth in employee count and
revenues, as have most of the global consulting firms based in the U.S.
and EU.
While corporate profits have been growing,
government budgets in the U.S.
and much of Europe have been under tremendous
pressure at the national, state and local levels.
While recent years have seen a general rebound
in state and local tax collections, sharp increases in government employee
pension and health care costs are having a devastating effect on finances.
Spending and debt have been called in
question, and in some cases curtailed.
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Global consulting industry revenues (including
HR, IT, strategy, technical, operations, management and business advisory
services) will be about $491 billion in 2018, according to Plunkett Research
estimates. This represents reasonable
growth from $488 billion during the previous year.
In the U.S., consulting of all types, including
management, scientific and technical, generated $264.7 billion during 2017, up
from $254.8 billion the previous year. Accounting and related services (such as tax return preparation)
generated an additional $175.4 billion in 2017, up from about $167.6 billion
during 2016, according to the U.S. Bureau of the Census.
In recent years, corporate profits in general have
grown dramatically, meaning that executives are reasonably willing to authorize
new consulting projects, as long as they see the potential for a good return on
the cost. For example, India’s leading
consultancies have recently enjoyed substantial growth in employee count and
revenues, as have most of the global consulting firms based in the U.S. and EU.
While corporate profits have been growing,
government budgets in the U.S. and much of Europe have been under tremendous
pressure at the national, state and local levels. While recent years have seen a general rebound
in state and local tax collections, sharp increases in government employee
pension and health care costs are having a devastating effect on finances. Spending and debt have been called in
question, and in some cases curtailed. This has been particularly hard on some consulting firms, since
governmental agencies are prime clients for consultancies.
Positive factors for the consulting industry over the
mid-term:
1) Continued growth in health care
expenditures and significant changes in health care coverage are creating
demand for consulting projects. This
includes a focus on greater operating efficiencies and cost controls, creating
a perfect environment for consulting.
2) In nearly all business sectors, consultancies
that focus on projects that clearly reduce business costs and enhance operating
profits in a reasonably short period of time will find a ripe corporate market
(such as consultants who focus on cash flow enhancement, supply chain
efficiency and manufacturing efficiency).
3) Vast labyrinths of government
regulation in the U.S. and in the UK/EU, for example in the ecommerce, banking
and investment industries, are creating numerous opportunities for consultants
who can show companies how to navigate rapidly changing relationships between
government and industries, or deal with government oversight, particularly in
financial services, environmental matters and health care.
4) Consultants who assist firms in
lowering employee benefits costs are in high demand, as are those who
specialize in change management, employee retention and employee productivity
enhancement.
5) Consultants and advisors in information
technology and mergers and acquisitions will be in high demand.
Source:
Plunkett Research, Ltd.
The top specialties in the consulting field are
led by management consulting and technology consulting. Management consultants assist companies with
restructuring or strategy development, in order to enhance operating
efficiencies, increase productivity and increase return on assets, as well as
significant assistance in identifying and merging with other firms that are
targeted for acquisitions.
Technology consultancies offer skilled services
across the full spectrum of technology needs. This includes consulting in telecommunications, software development, supply
chain enhancement, factory automation, systems implementation and
enterprise-level databases. In recent
years, much of this work has shifted to projects involving cloud computing, data
analytics, mobile apps and mobile tools for workers in the field. Machine learning and artificial intelligence
work will be among the fastest-growing specialties for the long-term. Consulting firms based in India have carved
out a very significant market share in this field. Other significant sectors within consulting
include human resources and employee benefits consulting; risk management; and
environmental and regulatory compliance.
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