MCA predicts industry growth for 2024 despite headwinds
The Management Consultancies Association has predicted a year of double-digit growth is ahead for the UK’s advisory industry, even as it wrestles with a slowdown in work. Looking ahead, the industry body expects that technological shifts and sustainability issues will see clients renew interest in external expertise throughout 2024.
Management Consultancies Association CEO Tamzen Isacsson commented, “Our latest forecasts from leaders across the market suggest that, although growth has slowed from the record peaks of 2022, the sector is still forecast to achieve double digit growth in 2023 and we continue to achieve record exports overseas… Our industry, which is one of the biggest consulting centres in the world, is working hard to ensure it meets future client demand and the enhanced support required for AI, technology transformations and support with sustainability programmes.”
Examining data from its member firms, the MCA estimates that the wider consulting industry saw record 23% growth in 2022. However, sustained uncertainty around supply chain disruption, and spiking inflation have seen many clients postpone projects, and freeze relationships with external advisors as a way of building up cash reserves.
With inflation in the UK slowly falling to more manageable levels, and the wider economy showing signs of growth, it may be the case that clients now feel the time is right to invest in the future once again. According to the MCA, demand is still high for digital transformation services and moving to the cloud, as well as advice for deploying AI and sustainability requirements – meaning the consulting sector of the UK has still grown by 13% over 2023.
It’s not all plain sailing for the sector by any means, though. Given the huge fluctuations in client demand since the pandemic, Isacsson also warned that “some readjustments to workforces and the balances of skills within firms are expected.” Coming out of the lockdown months, many firms committed to hiring sprees driven partly by a need to meet rapidly accelerating demand, and partly to get ahead in the sector’s war for skilled workers in a tightening labour market. This saw an increase in the number of apprentices and school leavers joining the consulting industry contributing to a 16% growth in headcount in the sector in the UK last year alone.
In recent months a number of announcements from firms have been made about jobs in the sector, as the rate of growth in demand has cooled, and some new hires have been left on the bench. This may continue into 2024, but as the sector meets future client demand for the enhanced support required for AI, technology transformations and support with sustainability programmes, the layoffs talked about by some of the largest firms in the country may shift to retraining exercises.
At present, new consultants at MCA member firms already receive an average of 7.5 days training and development – and this may grow as firms look to adapt its headcount to demand, rather than up-or-downsizing it. Younger consultants are also joining the pathway to become Chartered Management Consultants. The Chartered Management Consultant (ChMC) Accreditation is the highest recognition of a management consultant’s expertise, experience and talent given within the profession and has been developed to set and maintain the highest standards in management consulting. It has been adopted widely across the industry with many young consultants on the journey to becoming associates.
Isacsson added, “We are seeing further evidence of the increased accessibility of the industry via different paths and in every part of the UK. As well as school leavers, apprentices and graduates, the industry also continues to hire experienced consultants and more senior employees of all ages as professionals look to apply their skills in consultancy and is reflective of the changes that are being seen with clients as well.”
