| Management consulting recruiter Mindbench looks at the current state of the market and give its prognosis for 2009. |
| Recruiting in a downturn: how to grow your team and your business |
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| | By Mindbench
The last time that
the UK consultancy
industry faced
uncertainty was late
2001-2003 as the fallout
from 11 September,
Enron, and the end of
work associated with Y2K
impacted demand. The
industry as a whole
continued to grow
although in single
digits and traditional
management consultancy
services declined by 8%
in 2003 and 9% in 2004.
Overall industry growth
was sustained by
outsourcing and
government-related work.
The market then quickly
returned to rapid growth
and achieved 18% growth
in 2006 and over 10% in
2007.
The UK economy is
likely to have entered
recession from July 2008
and the severity of the
slowdown will
significantly impact the
consulting industry. The
first recession for 17
years is expected to be | |
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| | long (12 -18 months is
typically projected) and
deep, with several
leading commentators
suggesting it will be
the worst recession that
the UK has faced since
the Second World War.
The severity of the
crisis in the financial
services industry,
together with the
malaise in retail and
manufacturing sectors,
will inevitably impact
on consultancy revenues
for 2009 as clients
reduce budgets or put
discretionary projects
on hold. As a result
contraction in
non-government related
revenues for the whole
consultancy industry
next year is a real
possibility.
At Mindbench we have
seen many firms involved
in strategy, M&A or
growth related
consulting areas,
including Big Four and
strategy consultancies,
retrench and reduce
their headcount in these | |
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| | areas of consulting
which deliver cost
savings to clients,
including supply chain,
procurement, and lean
manufacturing. Mindbench
has also witnessed
continued demand in
government-related
consulting areas and new
demand in financial
services
merger-integration
related activity. We
anticipate that
outsourcing and
off-shoring activity in
financial services
(excluding banks with
government stakes) will
accelerate in the New
Year.
The next year will
present a major
challenge for how
consultancy firms manage
their people and adapt
to the new environment.
We have suggested four
key areas that firms
need to think about if
they are going to
benefit from the
opportunities and
minimise the risks of | |
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| | the recession.
How to grow and
develop your consulting
team during the
downturn:
1) Leading your
people
The vast majority of
management consultants
will not have worked
during the last general
recession of 17 years
ago: most of them will
have been at school or
university. As in other
industries, they may
feel fearful about their
jobs and need
reassurance, as well as
good motivation to
perform at their best.
Continued investment in
consultants’ training
and development as well
as maintaining their
bonus payments will pay
dividends in performance
during the downturn and
in retention when the
economy improves.
Continued on page 3
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| | areas by 5-25% of their
consulting staff.
Regional or European
offices have also been
closed as some strategy
or M&A practices firms
pull back. With the
exception of financial
services, most of the
cuts in London have
occurred at the junior
levels and some firms
have deferred start
dates or even rescinded
offers to graduates. One
large multi-solution
firm has announced cuts
of around 400 of its UK
workforce in its system
integration business.
The overall number of
redundancies is still
small however, at around
only 1% of the total
consultancy industry in
the UK. With a deepening
economic recession
redundancies are likely
to increase in 2009.
There are pockets of
strong hiring however,
particularly related to | |
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