| | Usually at this time of
year, the main concern
of our readers is
whether or not bonuses
have met expectations.
Not this year though.
Top of readers' concerns
right now is
unsurprisingly the
impact that the credit
crunch (and associated
bad press) is having on
the consulting industry
at large – and
recruitment prospects in
particular. We asked the
specialist recruitment
team at Astbury Marsden
to comment on recent
market developments and
how these are impacting
the activities of major
players in the
consulting industry.
With so much
discussion and adverse
publicity around the
‘credit crunch’ and the
current economic
slowdown, it is to be
expected that before
long the doom-sayers
will turn and point to
the economic climate’s
detrimental impact on
the management
consulting sector and
its associated
recruitment campaigns.
It might be logical to
think that significant
cuts in discretionary
spending by banks will
seriously impact the
growth prospects of
consultancies globally,
but is this the reality?
Based on quarterly
review figures published
in April 2008 and
conversations with
leading management
consulting clients both
in the UK and Europe,
Jamie Stokes, director | |
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| | of professional services
at specialist
recruitment company
Astbury Marsden, sees no
signs of an immediate
slowdown in hiring.
Despite anecdotal
evidence suggesting that
caution is in the air,
many recruitment
campaigns continue to
steam ahead. The general
consensus is that demand
for candidates from
banking-sector clients
may fall to its lowest
for the past two years,
but this is not
deterring consulting
companies from hiring
proven consulting and
technology staff as we
move into quarter two.
Even financial
services-focused
businesses like Oliver
Wyman FS, Capco and
Ernst & Young continue
to recruit apace.
This sentiment was
mirrored on 14 April by
Alan Greenspan who
adopted an
uncharacteristically
upbeat stance by stating
that knowledge economy
firms (consultancies to
you and I) have evolved
and learned from
previous down-turns in
the economy. The clear
result of this is that
consultancies are now in
superior financial
shape, and better suited
to cope with cyclical
economic downturns. It
therefore makes clear
sense that regardless of
sector, clients continue
to invest in premium
advisory skills focused
on critical cost saving
and value enhancement
projects.
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Consulting firms with
the highest growth
potential and those that
have recruitment high on
the priority list are
those firms that are
well recognised brand
names but are currently
sub-scale when compared
to their competition
(e.g. Ernst & Young,
KPMG or even a growing
Capgemini Business
Consulting). Stokes
suggests: “Such
sub-scale firms,
particularly those with
a strategy of selling
premium advisory
services, are far less
likely to move with the
market and therefore
probably have the
biggest opportunity for
growth in the face of
any adverse market
conditions.”
In the current
market, there remains a
significant demand for
consulting services and
enhanced execution
capability. Creating
far-sighted and nimble
solutions is more
crucial than ever. Roles
around the remodelling
and transformation of
major corporate
functions such as HR or
finance, typically
sponsored by the CEO or
CFO, are now of
paramount importance. A
large number of UK-based
consulting firms also
continue to see
considerable demand for
even broader business
and IT transformation
and integration skills
due to the recent spate
of M&A activity.
Additional drivers
for growth and hiring | |
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| | for many UK
consultancies from Big
Four, full service or
boutique companies are
varied. There are the
obvious counter-cyclical
propositions; dealing
with provision of expert
witnesses, disputes,
sub-prime and regulatory
challenges seem
perfectly positioned for
a downturn. There is
also a growing market
for those consulting
firms purveying more
specialist advisory
skills such as business
and financial modelling,
economic and competition
advice and credit,
market or enterprise
risk management.
Stokes also comments
that “so-called full
service consulting firms
such as Accenture and
IBM, strategic
outsourcing firms such
as CSC and EDS and the
pure play outsourcers
such as TCS and Wipro
continue to fare
particularly well. When
times are good, big
corporates engage in
strategic outsourcing to
improve their service
offering and when times
are hard they use
outsourcing to cut costs
to the bone. We see net
income in Accenture’s
fiscal second quarter
rose 37% to $406.6m
(£203.7m), from $296.7m
(£148.6m) in the same
period a year ago. They
and others are
benefiting from the
attractiveness of a
broad service offering
that includes
consulting, applications
management, process | |
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| | re-engineering and BPO”.
The pool of talent in
all of these areas
remains in shorter
supply than current
market demand. If you
have experience in these
areas, then Big Four,
boutique, and full
services consulting
entities are likely to
be interested in you.
However, Stokes
strikes a cautionary
note: “It is not all
boundless enthusiasm on
the recruiting front.
We’re certainly
witnessing longer and
more onerous sign-off
periods for a large
number of hires so far
in 2008. We feel that
entry-level recruitment
will take the biggest
hit. Astbury Marsden
estimates that graduate
recruitment in 2008
could be down as much as
20% on 2007’s figures,
with strategic
consulting houses
reining in recruitment
at that level most
dramatically.”
To summarise, one can
broadly state that the
UK’s mature consulting
industry appears
confident and robust in
these uncertain times.
By focusing on creating
real value within target
organisations,
consulting companies can
look to the future with
real confidence,
equipping themselves
with talented hires to
face the potentially
challenging times
ahead.
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