Strategy and Business Analysts losing popularity in consulting sector

17 August 2017 Consultancy.uk

The UK consulting industry has seen a decline in new vacancies according to new data. Figures extracted from job-search databases show that there were no fast growing titles within consulting with many shrinking, while strategy and business analyst roles looked to be falling the quickest.

An analysis of over 79 million job adverts in the UK over a two year period has shown the number of new jobs in the consulting sector appears to be shrinking. Data from Adzuna, an international job-search database, was analysed to measure the effects of automation on the job market – something which fellow employment platform Joblift recently contended could see a dramatic reduction in UK employment.

For this study, over 79 million archived UK job adverts were extracted from Adzuna’s database covering the period January 2015 to February 2017. Using this data, monthly counts of new vacancies were generated for ~5,000 unique occupations. These counts were then normalised in order to account for changes in the total number of job adverts live at any time (accounting for seasonal variations), and lastly rebased to a score of 100 in Jan 2015. This final step enables easier direct comparison of changes between occupations.

Consulting roles facing declining popularity

The company has over 1.2 million jobs within its dataset, spanning 5,000 unique occupations, and including several job roles in the consulting industry. According to the data, the top five performing sectors for consulting roles were Sales, IT, HR & Recruitment, Accounting & Finance and Retail. This is in line with each sector looking to steal itself amid growing disruption from digitally capable start-ups bringing new competition to former market incumbents, particularly in finance and retail, where FinTechs and ecommerce look to present a major challenge to formerly dominant figureheads of the sectors. IT is also a heavy area of demand for consultancies, as clients increasingly expect digital-savvy solutions to help them combat market changes.

A large number of consultancy roles are declining however. Outright Consultants were the slowest retracting job listings, with their rating of 100 standing at -0.83 – though this could partially be attributed to similar jobs being created with more specific titles replacing these more general positions. Project Director and Project Manager both saw declines around the -1.5 mark, while Building Innovation Modeling Manager postings fell by -1.7, and Sales Business Development Manager saw a fall of more than -1.8.

The top five most drastically retracting job titles were Business Project Manager at -2.31, followed closely by Risk Consultant at -2.40 and Business Change Analyst at -2.40. Business consulting took a further hit with Business Analyst Project Manager positions the second most quickly falling title on online job posts with 2.60, while Strategy Analysts saw the largest decrease, at -2.64.

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High employment drives deals to access fresh talent

09 April 2019 Consultancy.uk

The UK continues to have a historically low unemployment rate, resulting in a tightening employment market and demand for recruitment services. The industry topped £12.3 billion last year, while valuations continued to rachet up. There were were 32 firm acquisitions in the recruitment services space last year, up significantly on the previous five-year average.

Labour markets globally are tightening, particularly in developed economies. At the same time, access to top talent is becoming increasingly difficult to source, as demand for that talent continues to rise. Higher demand has been one of the key drivers for acquisitions in the space. New analysis of the recruitment M&A market, from consultancy firm BDO, looks at current trends and future projections for activity in the segment.

The UK employment rate has grown considerably over the past decade, with the number of NEET decreasing, more women joining the workforce, and older people continuing to work, among other trends. Participation rates hit more than 75% in 2018, up from around 73% in 2014. The unemployment rate dropped to 4.1% last year, the lowest level in more than 40 years.

UK Recruitment Market

 

The recruitment industry has enjoyed strong growth over the same period, with revenues increasing from around £8 billion in 2014 to £12.3 billion last year. However, the growth rate for the industry is expected to stall for the coming years – the firm is projecting annual growth of 0.1% to 2024. The stall reflects deep seated uncertainties stemming from the future of the UK, from migration to internal employment in an increasingly uncertain future.

According to the firm’s analysis of market trends for UK listed FTSE recruitment companies, their performance over 2018 outperformed the wider FTSE market by a significant market during some months – the end-of-year uncertainty hit both recruitment and non-recruitment firms with relatively equal strength. The drop partly reflects market sentiment about the future of the UK.

FTSE Listed Recruitment Firms Average EV/EBITDA Multiple

 

The study also considered the multiples growth, average EV/EBITDA multiples, over the past year – which has shown considerable ups and downs. The yearly average multiple of 10.4x was above that of 2017’s 9.9x – although a 26% drop at the end of the year was significant. The drop was tied to the relative volatility in macroeconomic conditions affecting the globe, though another major contributing factor has been Brexit and political instability.

Global M&A

The global recruitment M&A market was particularly active in the UK, with 32 deals last year – a five-year high, and well above the 17 recorded for second-place US. Deal activity in the UK was focused on expertise and capacity in industrial and technical sectors, reflecting skills shortages in those segments. The US was largely focused on healthcare-related M&A, representing 25% of their market.

Overall, of the 92 deals in 2018 (a 21% drop on 2017) generalist firms were the most in demand, at 25% of the total, followed by education at 14% and engineering & construction at 13%. Software saw relatively low demand, at 2%.Investment into the UK by country

In terms of investments made into the UK, domestic investment continues to be the most dominant, accounting for 24 deals. Japan made three deals, although Brexit is seeing the country become increasingly nervous about investment. The US accounted for two deals. The longer-term trend shows that domestic investment is up on 2017, hitting the highest level in five years, while the US has reduced its M&A investment into the UK.

Commenting on the results, the firm noted, “The latest report shows the recruitment sector remains strong and continued to grow through 2018 despite facing many challenges. Notwithstanding the personalised nature of these services, the market continues to evolve, seeing traditional recruitment firms utilising available technology along with new entrants showcasing innovative platforms.”

Related: High UK employment masks troubled economy.