8 out of 10 UK companies hire consultants, and are satisfied

07 January 2019 Consultancy.uk 7 min. read
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84% of mid-sized to large businesses polled used consulting services according to survey of 250 UK industry decision makers across the public and private sector. Fewer than two in every 10 are unhappy with the service they receive, while in the future clients point toward Brexit and digital disruption as the key issues they will need help from consultants to address.

The UK’s consulting industry is the second most mature in the world behind the United States, and is currently worth nearly £10 billion according to the latest estimates available. The size of the market is not necessarily surprising, given the importance placed on tapping external expertise by various research pieces, however, with the UK economy slowing amid a productivity crisis and the impending completion of the Brexit project, many companies are looking to cut costs. Amid a flurry of public scrutiny on the costs of advisory work, the first place many are looking to make such savings is their consulting bill.

In order to both illustrate the continued importance of investing in consulting work, and to show consulting firms what clients expect of them going forward into a challenging economic period, the Management Consultancies Association (MCA) has published a new analysis of the industry’s customers. The independent survey of 250 UK industry decision makers across the public and private sector found that the use of consulting services across entities of all sizes remains relatively pervasive, with 84% of respondents stating they currently engage consultancies.Use of consulting services across UK businesses

The bulk of the 16% who did not use consulting services suggested that their organisations have refrained from doing so due to budgetary restraints, or because they have an existing in-house solution. Of those who did purchase such services meanwhile, a majority of 65% said that they spend less than £5 million per year on consulting work. The use of consulting was relatively even across all sizes of companies polled, although the smallest in the report’s sample was a mid-sized company of 250 employees.

When asked which services in particular they tapped consultants for, each respondent could give up to four answers, but the MCA found that by some distance the most popular was business transformation. With the heightened importance of transformation projects emphasised by crowded markets in many sectors, and smaller competitors trying to quickly gain ground on long-term incumbents by deploying digital solutions, it is unsurprising that 43% of those polled said transformation consulting was key for them, then.Market value of UKs management consulting industry

This was followed by the related field of digital and technology advisory (35%), as well as programme and project management (34%). Strategy advice, financial advice and change management each received similar shares of responses too, as companies look to leverage consultants to help push through changes and new strategies that can keep them ahead of new competitors.

Satisfied customers

According to the MCA’s data, a huge 81% of respondents polled indicated that their expectations had largely been met or exceeded during the consulting engagements they’ve experienced. Additionally, more than half of respondents have consistently had their expectations exceeded or substantially exceeded. Less than 9% meanwhile said their expectations had been substantially above the value of the services they received.Have consulting projects met expectations of value

This contrasts the results of a similar survey released by the MCA in 2010. Then, 58% of clients said they were very satisfied with the work their consultants, while 41% were satisfied. This left a mere 1% unsatisfied with their service. While it would be easy to draw a quick conclusion from this that satisfaction has in fact declined in the last decade, it is important to note that the latest study was outsourced rather than performed internally, which may have had an impact on the quality of the results on offer.

A study on the management consulting industry by its own industrial representative body is always likely to face some accusations of bias. In 2010, the research was internal, and the MCA worked with a steering committee of industry experts to develop a research methodology for the project, but this time out the MCA commissioned VIGA, a global research company, to conduct the survey, arguably supplying a more impartial methodology and set of results.

At the same time, the level of satisfaction on display still remains connected to tangible results, but it is now supplemented by other aspects. In 2010, the MCA found that the benefits of using consultants were worth around £56 billion to UK clients, a return of £6 for every £1 invested. In the recent report, 16% of respondents listed value for money as an aspect of engaging consultants they especially appreciated, however, non-monetary aims were more important, with the most popular being independent thinking and transformational outcomes (49% each), followed by knowledge transfer and achievement of project goals (35% each).

Emerging business challenges requiring consulting support

The future

The question now for consultants looking to make the best of an uncertain economic outlook in the UK, is which issues to position themselves to help clients with in the near future. According to the MCA, efficiency is the challenge which most concerns businesses going into 2019, at 47% of responses. Unsurprisingly, as the UK and EU aim to settle Brexit by the end of March, 40% of businesses also list the issue as a top priority for them in the coming year.

After that, the trend toward embracing new technologies in the workplace also took precedent. 38% said digital deployment was a leading challenge for their business, along with another 34% who said the same of dealing with digital disruptions, such as AI and automation.

Commenting on the results of the survey, Tamzen Isacsson, CEO of the MCA, said, “We’re encouraged by the feedback from business leaders about the value of consulting… and believe our member firms are well equipped to assist businesses with the challenges of digital and technology upheavals in the future. Brexit is of critical concern to many businesses across the UK, but, as this study shows, there are many other pressing business issues that companies need to focus on to remain competitive and grow. It’s vitally important that businesses get certainty as soon as possible this month on our future relationship with Europe so they can plan and prepare for Brexit and then get on with the important job of improving the efficiency of their organisations.”