UK consulting industry revenues hit £14 billion after double-digit growth
New research from the management consulting sector’s industrial body enjoyed double-digit growth for 2021, hitting revenues of more than £14 billion. As the market recovers from the shock of Covid-19, digital, supply chain and sustainability concerns among clients are expected to drive further double-digit growth in 2022.
Each year, the Management Consultancies Association (MCA) uses the performance of its members to gauge the size and health of UK's management consulting market. In the past two years, this data has been used as a weathervane regarding the health of the market amid the pandemic.
For example, with the UK economy having been ravaged by a pandemic and historic recession through 2020 many experts expected the worst for the consulting sector. However, MCA released early estimates of the UK management consulting industry’s performance in the pandemic to estimate that the industry was actually still seeing revenues expand by around 2.5%. It transpired over that year and the following year the sector had indeed enjoyed growth. In its update in 2021, this saw the MCA estimate that the industry had grown by a further 4.5%, to hit revenue value of £12.52 billion.
Now, the latest forecast from the MCA indicates this positive growth track continued through last year, with 16% growth thanks to the role that firms played in supporting thousands of clients across the UK in difficult and transformational times. This would take the revenues of the industry to roughly £14.52 billion.
Tamzen Isacsson, Chief Executive of the MCA, said, “Thousands of British and global clients have turned to the UK’s leading consultancy sector to transform their businesses digitally and pull through from the pandemic, using trusted advisors to accelerate growth plans and provide greater resilience to supply chain operations. Consulting sector growth has been driven by work in the private sector with an uplift in exports overseas and this is forecast to continue at a high rate for the rest of this year.”
The double-digit growth is not expected to slow any time soon, either. MCA members estimate that the sector will continue to boom by 13% through 2022, as clients seek support for adapting their operations to the ‘post-pandemic’ working environment.
2022
In particular, digital technology will still dominate demand, as clients look to adapt their working schedules to the hybrid demands of post-pandemic life. However, 6% fewer members said this would be the area of top growth in the coming months. In comparison, many more expect that solving sustainability challenges for clients and strengthening supply chains will be top priorities. The number expecting sustainability demands doubled from last year’s survey, to 56%, as did those anticipating supply chain work – now 35%.
Despite this optimism, there are a number of issues facing the sector. Consultants especially expect hybridised work to provide challenges in their own firm – with 67% citing the requirement for flexible/remote working as the most significant issue. However, while many markets are currently struggling with a ‘great resignation’, this does not seem to be such a problem for consulting firms. Employees seem willing to cut their employers some slack as they look to accommodate more flexible hours, or working from home – and 82% of respondents said they were not seeking a new role either in consulting or a different industry, an increase from 77% last year.
Isacsson added, “Thanks to high job satisfaction and the challenge of working with new and varied clients there is no “great resignation” in the consulting sector and the majority of consultants believe their work life balance has improved with less commuting and more remote work. As client demand continues to drive double digit growth the industry remains an attractive career option for the brightest talent in our country, but firms must ensure that training and development continues to be world class and that the generation that joined in the pandemic is able to benefit from learning in both digital and face to face settings.”
