UK consulting sector to see double-digit growth in 2022
Double-digit growth is expected for the UK’s management consulting industry in 2022, as clients turn to the sector to help with digital transformation, supply chain challenges and sustainability priorities, according to the latest member survey of consultants from the Management Consultancies Association (MCA), among whose members include Deloitte, EY, IBM, Grant Thornton, Siemens, KPMG and PwC.
Growth in 2021 far exceeded expectations of those working in the sector, up 16%, a six-fold increase from 2.5% the previous year, as pent-up demand from existing clients, urgent digital transformation demand and a need to make supply chain challenges more resilient took centre stage during the pandemic.
“Thousands of British and global clients have turned to the UK’s leading consultancy sector to transform their businesses digitally and pull through from the pandemic, using trusted advisors to accelerate growth plans and provide greater resilience to supply chain operations,” says Tamzen Isacsson, chief executive of the MCA. “Consulting sector growth has been driven by work in the private sector with an uplift in exports overseas and this is forecast to continue at a high rate for the rest of the year.”
Demand for sustainability services expected to double this year
Research reveals digital transformation will continue to dominate demand, with 13% growth estimated in 2022, and 92% of members expecting increased demand in digital technology services. Increase in growth in less than last year, however.
It is demand for sustainability services, ranked second to digital technology, that is expected to see the biggest increase this year as clients turn to consultancies to help them solve sustainability challenges like restructuring supply chains and responding to new green regulations and changing consumer demand. Double the number of consultants (56%) believe sustainability priorities will increase in 2022, up from 27% last year.
After digital technology and sustainability, consulting services expected to see the most increase in demand in 2022, according to consultant members, include those addressing supply chain risks (35% increase), cost reduction (34%), cultural change (27%), regulatory change (14%), risk mitigation (13%) and merger or acquisition (10%).
“Whilst we as a country emerge from the pandemic, clients continue to require consultancy support to navigate its impact and a variety of other challenges including supply chain disruption, demands fort them to become more sustainable and the need to improve diversity,” says Oliver Worsfold, Director at Savanta, an independent market research agency which partnered with MCA on the member report 2022.
Consultancies retaining top talent and taking on more diverse talent
That’s not to say the sector won’t be without challenges in 2022, with consultants expecting the shift to hybrid working to provide challenges in their own firms, with 67% citing the need for flexible/remote working as the most significant issue.
But while many markets and industries are dealing with the ‘Great Resignation’, consulting firms are not with 82% of consultants saying they were not seeking a new role either in consulting or a different industry, up from 77% last year, thanks to “high job satisfaction and the challenge of working with new and varied clients”, says Isacsson.
Overall, nearly three-quarters of consultants felt that their current work/life balance was either better or unchanged compared to pre-pandemic, with many embracing the fact there is less committing and more remote work.
Training and development continues to be a high priority for consultants of all levels and many firms have invested in digital training in recent months with half of consultants saying they received at least as much training as before the pandemic. However, more than one-quarter say they haven’t had as much training or the quality of the training has dropped.
Isacsson adds: “As client demand continues to drive double-digit growth, the industry remains an attractive career option for the brightest talent in our country, but firms must ensure that training and development t continues to be world-class and that the generation that joined in the pandemic is able to benefit from learning in both digital and face-to-face meetings.”
Data from young consultants with 0-5 years of experience show that the consulting industry continues to increase its accessibility to young talent from a diverse range of backgrounds, with research revealing a decrease over the last decade in the hire of young consultants from a Russell Group university – falling 73% to 36% – as firms increasingly look for bright new entrants from more diverse talent pools.