United Kingdom
The UK management consulting market – which includes England, Scotland, Wales and Northern-Ireland – is worth around £10 billion, making it Europe's second largest consultancy base. Growth has been strong in recent years, ranging between 6% and 10%.
According to data from the Management Consultancies Association (MCA), the representative body for management consultancy firms in the UK, the consulting market of the UK ranks among the fastest growing advisory markets in Europe. In 2012 total fee income of the sector was estimated at £7.4 billion, and on the back of solid year on year growth, including double-digit growth in 2014, the management consulting industry is currently worth circa £10 billion*. MCA members firms account for around 60% of total turnover.
UK's consulting industry employs circa 63,000 professionals, of which approximately 94% of them are consultants, and 6% are supporting staff, says the MCA. With regard to service lines, Technology is the largest segment (28%) in the United Kingdom, followed by Finance & Risk (15%) and Operations (13%). Strategy and People & Change have a turnover share of approximately 10% each. A comparison with European averages shows that UK consultancies do relatively much work in Technology, and less amounts of work in the fields of Strategy and Operations.
Technology consulting is expected to, in the coming years, book the strongest growth. Key growth drivers include digital transformation, big data, cloud, robotics, mobile and artificial intelligence. On the other hand, Sales & Marketing and Finance & Risk are expected to grow mildly.
In terms of Client industries, the largest part of the UK’s management consulting turnover is represented by Financial Services (33%), followed by the Public Sector (21%) and Consumer or Industrial Products (14%). With the exception of Financial Services, which is expected to remain flat, all client segments are expected to grow in the years to come.
81% of the consulting turnover in the UK is related to services offered for the domestic market, while 19% is exported, equally split between exports within the EU and exports outside the EU. Across European consulting markets, 85% of work focuses on domestic engagements.
Looking ahead, the MCA believes the UK consulting industry will remain buoyant, with growth rates of between 8% to 10% forecasted up to 2018. The landscape is changing, however, as a growing divide is being established between high- and low-value service providers. Demand is rising for consultants who can provide solutions to complex and novel problems, sparking a growing demand for firms that can staff multi-disciplinary teams. In addition, management consulting firms with an edge in digital are set to reap a larger share of overall growth.
* Note that definitions of the consulting market and the methodology used by the MCA differs from the approach followed by other analyst firms. According to ALM Intelligence, the UK consulting industry is worth just under $21 billion – see the page 'UK & Ireland' for details.
