| Consulting market shrinks by 10%
but is now primed for hiring recovery |
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| | By Tony Restell,
Founding Director of
Top-Consultant.com
Recent results from
Accenture and IBM were a
wake-up call for anyone
thinking the consulting
industry has been able
to shield itself from
the effects of the
global downturn.
The reality looks
more as if the
consulting industry will
have declined 10%-15% by
the time it emerges from
recession. However,
extensive research just
published by
Top-Consultant.com shows
that, after an 18-month
period in which
recruitment activity
slumped, hiring will be
kick-started within the
coming months. The
majority of consulting
firms believe a hiring
upturn will be underway
by early 2010.
An industry
shielded from
recession?
As recently as May of
this year, the MCA’s
annual report showed the
UK consulting industry
growing revenues at 5%
per annum. Could it be
that the scale of
restructuring and
turnaround opportunities
were powering the
consulting industry
ahead in spite of the
general economic
malaise? Certainly the
mass redundancies and
collapse in hiring
activity made this story
seem hard to swallow.
However these figures
were based on financials
to the end of December
2008 and with hindsight
clearly masked the
deterioration that firms
have seen in their order
books since late 2008.
The decline follows more
than a decade in which
the growth rate has
rarely dipped below
10%.
Accenture’s
consulting net revenues
for the fourth quarter
2009 were $2.91bn, a
decrease of 12% in local
currency terms from the
fourth quarter of fiscal
2008. Similarly IBM’s | |
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| | Global Business Services
unit reported its latest
quarterly revenues down
11% compared with 2008.
Both firms’ order book
figures suggest the
industry will see
stabilisation over the
coming quarters rather
than a return to
stratospheric growth.
While the
Top-Consultant team is
certainly seeing many
niche consulting firms
thriving in the current
climate, from an
industry growth
perspective the
importance of firms like
Accenture and IBM is
overwhelming. With
consulting revenues
slipping at other
leading brands like Atos
(-23%) and Capgemini
(-13%), the inescapable
conclusion is that
consulting as a market
will have declined by
10% or more by the time
the industry returns to
growth again.
Consulting hiring
primed for recovery
Against this backdrop
and the significant
redundancies that have
been undertaken over the
last year,
Top-Consultant surveyed
122 recruiters from a
wide range of consulting
firms and agencies to
determine when we can
expect an improvement in
the consultancy
recruitment market. The
results were mixed in
that a hiring upturn is
expected imminently, but
it will be at least
three years before we
see anything like the
hiring frenzy that has
characterised much of
the last decade.
Overall, the findings
paint a picture of a
modest recovery in
hiring activity that is
only just now starting
to get underway, which
would explain the
difficulties that
consultants have
experienced in securing
new positions up until
now. Only 7% of
respondents believe the
market began picking up
earlier this year; 45% | |
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| | believe a hiring
recovery is either
already underway or is
just getting underway
now. This leaves the
majority (55%) expecting
to see a hiring upturn
only get underway from
2010 onwards. Set
against the terrible
hiring climate of the
last year it is a
positive to see that 79%
of all recruiters
believe a recovery will
be underway by early
2010.
Respondents were also
asked to quantify how
their hiring volumes for
2010 and 2011 were
likely to compare with
the hiring volumes they
had seen during the most
recent boom. For 2010
the respondents expect
hiring volumes to be 45%
of what they were during
the last boom, with this
figure growing to 60% in
2011. These figures
compare with the ~25% of
previous volumes figure
that Top-Consultant
estimates the market had
dropped to at its low.
The key message is
that hiring activity
will increase steadily
over the coming two
years, but that the “War
for Talent” seen during
the boom will not return
until 2012 or beyond. In
the meantime, candidates
will need to be shrewder
in their choice of
application strategies –
and potentially consider
career moves outside
consulting too.
Further resources
Candidates wanting to
find out more about
securing a new role in
the current climate are
invited to our
forthcoming careers
event.
Recruiters wanting
further details of these
survey findings
(including trends in the
usage of different
candidate sourcing
channels like LinkedIn)
should contact Sarah
Nutton
(sarah@top-consultant.com
). | |
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