The Dutch consulting market has over the past contracted with roughly 0,5%. For the coming year the outlook is slightly positive, although the recovery will be significantly lower compared to neighbouring countries such as Belgium, Germany and the UK. These are the key conclusions from an analysis of Consultancy.uk based on recent market data.
Every year analyst firm Source looks into the state of the Benelux consulting market. The researchers look at the development of the market size for each of the three countries and the key developments per industry, functional area and firm type*.
According to its latest report, released last Friday, the Benelux consulting market has stabilized over the past year at roughly €1.87 billion. With a share of 62% The Netherlands is the largest market in the region, followed by Belgium (€625 million) and the tiny Luxemburg (€77 million).
From a sector perspective, three sectors managed to book growth: Healthcare, Financial Services and Pharma and Biotech. Expertise areas that performed well are financial consultancy, technology and operations. The field of HR and change management faced for the second year in a row the largest contraction: -2.9% last year and -8% in 2012.
With a total value of €1.167 billion, the top of the Dutch management consulting market equates to just over 3% of the US market and nearly one-fifth of the UK market, Europe’s largest base for consulting firms. Yet looking at the performance over the past years, the Dutch market is underperforming its peers in terms of growth. While major Western consulting markets such as the US, UK, Germany and the Nordics have found their way back to growth, the market in The Netherlands has contracted for 5 years in a row now. Last year the market shrank with 0,5%, the year before with 3,5% and during the height of the crisis years the impact is estimated to be even larger.
From a firm perspective results are mixed. Some firms such as for instance BDO, Conclusion, Deloitte and Rijnconsult have come strongly through the crisis, while at the other end of the spectrum several renowned firms such as Nolan, Norton & Co and VLDV have buckled under the pressure.
For 2014 and beyond, the Dutch consulting market is expected to further recover, although it will continue to lag neighbouring countries in terms of growth. Finance and technology consulting are most likely to be the frontrunners, driven by trends such as digitization, analytics and increased regulation in the banking sector.
* Source defines the consulting market as ‘management consulting services’ yet excludes areas such as tax advisory, audit, the implementation of IT systems, the delivery of outsourced/offshored services and HR compensation and benefits administration. In addition, it excludes corporate finance fees from its estimate of the M&A segment (part of Strategy). On top of that, the revenue estimates only take into account mid-sized and large-sized consulting firms (>50 consultants) and focuses on the work they do for mid- and large-sized clients. As a result of the relatively ‘narrow definition’ the estimates of Source are substantially lower than those of for example FEACO and Kennedy Information.