Strong growth in the top tier of the Dutch consultancy industry

07 December 2016 Consultancy.uk

The top tier of the Dutch consultancy market has enjoyed a year of strong growth. Eight out of ten firms saw revenues increase, with half booking double-digit growth. Growth, branding and training and development of consultants are the top three priorities for 2017, according to a survey among executives of 156 consulting firms in the country.

The study, titled ‘Captains Consulting Survey 2016', conducted by Consultancy.nl and the ROA*, shows that the Dutch consulting industry is starting to throw off the effects of the financial crisis. Due to fallout from the economic crisis on clients, the consultancy industry faced years of headwinds as dropping demand and pressure on prices resulted in lacklustre revenue growth, with many firms having to incur (significant) revenue contractions. The Dutch consultancy industry also faced – in line with international developments – a rapidly changing business landscape, due to trends such as globalisation, digitalisation, big data and the strong growth in the number of independent consultants.

Growth and higher rates

Following cautious recovery in 2015, the top segment of the industry this year booked solid revenue increases. Eight out of ten consulting firms achieved revenue growth, of which more than half (56%) saw double digit growth.

Revenue of Dutch consulting firms

The growth is in part the result of an increase in the number of projects initiated by clients, and due to an increase in hourly rates charged by Dutch consulting firms. 51% of surveyed executives – CEOs, Managing Directors and Partners – indicate that their average hourly rates have increased, compared to 10% of firms that report a decline in rates.

Favourable outlook for 2017

The research also found a generally positive outlook going into 2017. 82% are positive about the market outlook for the year ahead and the longer term, with boutique players the most optimistic. Hourly rates are also expected to rise further next year: half of the partners are counting on an increase of up to 5%; approximately one-fifth of respondents expect an increase of more than 5%.

Hourly rates of consultants

The 'War for Talent' is back

The executives identify increasing brand awareness and the recruitment and development of (new) talent, as a top priority for 2017. The priorities differ somewhat by firm size and type: branding and cooperative ventures are considered important for many boutiques, while large firms place more emphasis on recruitment.

The most cited priorities are (1) continued revenue growth and (2) the training and development of employees. "The Dutch consulting industry is ramping up its investments in the recruitment of top talent and the quality of existing consultants. This is necessary to enable growth and to continue to meet the ever-changing and increasing demands on abilities and skills," says Michael van der Velden of the ROA.

Threats

The growth of internal advisory departments at corporations and the emergence of self-employed consultants are seen as the biggest threat to the consultancy market in the Netherlands. "The number of independent consultants has doubled since 2008 to 90,000. In addition to the increase in the number of freelancers, established firms are also concerned about the quality of their propositions and the negative impact 'cowboys' can have on the reputation of the industry," says Larry Zeenny, researcher at Consultancy.nl.

Threats in the consulting industry

About the research

The 'Captains Consulting Survey 2016' is a study of the major trends and developments in the top of the Dutch consultancy industry and was conducted by Consultancy.nl and the ROA. The questionnaire for the survey was completed by a CEO, Managing Director or Partner from 156 different consultancies.

The full report can be viewed on this page (Slideshare) and can be downloaded via this link.

* The ROA is the Dutch association for management consulting firms, the counterpart of the MCA in the Netherlands.

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