Businesses in North spend more on consultants for less value

14 June 2017 Consultancy.uk

Small businesses in the North invest three times as much on external consultants compared to those in London, yet 30% of experts fail to adequately assist companies, a report has found.

The research by Zeqr, a global knowledge network for professional service freelancers, has revealed that businesses in the North of England spend a total of £43,000 on consultants to fill skills gaps in their workforce every year, compared to companies based in London who spend a collective £12,600 – less than a third of their Northern counterparts annual consulting budget.

According to a survey of 250 UK small business owners – enterprises with 49 employees or fewer employees based in an office environment – undertaken by One Poll in March 2017, small business owners in the North, on average, spend 48 days per year engaging experts, while hiring 48% more of them than Southern businesses. In stark comparison meanwhile, in London the average SME invests just eight and a half days across the year sourcing and briefing experts, highlighting the ease of access to a wider pool of experts in the capital.

The release follows more recent findings from Zeqr, who reported earlier in the year that nationally, SMEs felt they wasted a grand total £12.6 billion on external assistance in professional services, which they felt failed to improve the performance of their companies. 

Businesses in North spend more on consultants for less value

Postcode Lottery

This time, utilising One Poll’s data, Zeqr’s analysts found that further to this national dissatisfaction, inflated fees in comparison to those in London meant Northern businesses felt particularly short-changed by their experiences, failing to obtain the necessary expertise they required despite significant expenditure.

When businesses did engage external experts, almost a third of businesses in the North believed the consultants they hired had not provided value for money, with 70% stating their needs had not been met. Over half of those felt the advice on offer was disproportionate to their needs, while a sizeable 24% chunk of those respondents claimed the advice was too complex.

In comparison meanwhile, only 15% of small businesses in London did not feel external consultants offered value for money. 

Daniel Hedlund, a co-founder of Zeqr, commented on the findings, “Our new research shows that access to experts is a postcode lottery. Moreover, Northern business owners in particular face huge financial investment to access this expertise. With businesses often relying on an existing or small pool of suppliers, this often results in less than satisfactory outcome that doesn't help their bottom line.”

The business advisory and management consulting segment of UK's consulting market is estimated to be worth around £10 billion.

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