Dollars & Details:
Consulting is unique as an industry, in the way that the sizes of consultancies range on a scale rarely seen in the world of business. In contrast to the massive size and global infrastructure of the leading management consulting companies (such as McKinsey & Company and Boston Consulting Group), a large portion of the industry is comprised of very small firms—in many cases these are one-person shops, perhaps operating from a spare bedroom at home. This part of the business has grown rapidly, as legions of highly qualified and experienced executives have turned to consulting after being laid-off during corporate downsizing or taking early retirement. These professionals have turned to self-employment as consultants, focusing on their career specialties and combing their contacts for clients.
Unless there’s a recession, watch for continued steady growth and high profits in this industry. Annual revenues at top global consulting firms run in the billions of dollars, and high-ranking consultants may each earn $200,000 to $500,000 or more yearly in return for grueling hours, high stress and many, many days spent traveling far from home.
Global consulting industry revenues (including HR, IT, strategy, operations, management and business advisory services) will be about $488 billion in 2017, according to Plunkett Research estimates, up from $470 billion during the previous year.
Trends and Theories:
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. Government spending and debt have been called in question, and in some cases curtailed. This has been particularly hard on some consulting firms, since government agencies are prime clients for consultancies.
Ranks and Results:
At the highest level of the business is “management consulting,” the segment that advises top executives and boards of directors at Fortune 1000 firms on strategy and organization. McKinsey & Company, Inc., Bain & Company, Inc., Boston Consulting Group, Inc. and a handful of other companies are the most elite. Such firms may charge their clients anywhere from $300,000 to $1 million in monthly fees, with top consultants billing as much as $5,000 daily plus expenses, and associates at $2,000 or so. These consultants’ engagements for a multinational corporation may include analysis of multiple divisions and involve travel to several continents.
All the information you need about this industry can be found at Plunkett Research, including our consulting research center online, and our just-published, completely-updated Plunkett’s Consulting Industry Almanac, 2017 edition.