Turkish consulting market grows 8 percent to 410 million

20 October 2014 Consultancy.uk 2 min. read

The consulting market of Turkey performed strongly last year, growing by 8% to $410 million – twice the speed of the country’s economy (3.8%). The outlook for the coming years is positive, yet at the same time there are notable challenges ahead, such as the market’s vulnerability and the intensifying battle for talent.

Over the past years the consulting industry of Turkey has demonstrated a solid growth, both in size and its maturity. In 2012 the industry was, according to analyst firm Source Information Services (Source), worth around €380 million. Following a 8% growth in 2013, the sector is currently assessed at $410 million, roughly 20x smaller than the UK consulting market and just over half of the size of the Danish market (~$800 million). 

Financial services, which makes up nearly a third (32%) of the Turkish consulting market, remained strong – reaching a value of $129 million. Increasing regulation in the banking sector is regarded as the foremost driver, followed by high demand for cost reduction and optimisation projects. Source forecasts that financial services consulting will grow at 6% in 2014.

Turkish Consulting Market

From a service offering perspective, Financial Management and Risk is Turkey’s biggest consulting service area, valued at $177 million, comprising 43% of all consulting work in 2013. Revenue from Operational Improvement, Turkey’s second largest consulting service (21% of the market), increased to $85.7 million.

Against the positive outlook, the analysts at the same time warns for a number of challenges consulting firms may face in the coming period. Firstly, the Turkish market is “very volatile”, both economically and politically. Last year's turmoil for instance had an impact on public expenditure on consultants, and gradually led to the usual decision-making hiatus in the private sector as well. “Overall, it's had a big impact on investment decisions by both multinational and local corporations. Lots of projects were put on hold, and it wasn't until after the local elections in March this year that business activity started to pick up again,” explains Tolga Yaveroglu, partner at Deloitte Consulting.

Alison Huntington - Tolga Yaveroglu

Secondly, competition in the market is increasing, putting downward pressure on fees and ultimately profit margins. And thirdly, the battle for talent is expected to heat up: “There is a shortage of local people with the right skills and education for consulting. With the talent pool so small, and intimate knowledge of the Turkish market so critical, consulting firms are competing to attract talent who are not only in high demand domestically but also have plenty of international options,” says Alison Huntington, Senior Analyst at Source.