UK consultancy revenue hits £14bn after double-digit growth

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The management consultancy industry’s new research has seen double-digit growth for 2021, reaching revenue of more than£14 billion. AAs the market recovers from the Covid-19 shock, customer concerns around digital, supply chain and sustainability are expected to drive further double-digit growth in 2022.

Each year, the Management Consultancies Association (MCA) uses the performance of its members to assess the size and health of the UK management consultancy market. For 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 consultancy sector. However, MCA released early estimates of the UK management consultancy industry’s performance in the pandemic to estimate that the industry was still seeing an increase in revenue of around 2.5%. It happened that year and the following year the sector had indeed experienced growth. In its update in 2021, this saw the MCA estimate the industry grew by a further 4.5%, to a revenue value of £12.52bn.

Today, the latest forecast from the MCA indicates that this positive growth has continued over the past year, with growth of 16% thanks to the role the companies have played in supporting thousands of customers across the UK. United in challenging and transformational times. This would bring the industry’s revenue to around £14.52billion.

Tamzen Isacsson, Managing Director of MCA, said: “Thousands of UK and global clients have turned to the UK’s leading advisory sector to digitally transform their businesses and emerge from the pandemic, using trusted advisors to accelerate growth plans and provide greater resilience to supply chain operations. Growth in the consultancy sector has been driven by work in the private sector with an increase in overseas exports and this is expected to continue at a strong pace for the remainder of this year.

Double-digit growth is not expected to slow down anytime soon either. MCA members estimate the industry will continue to grow by 13% through 2022 as customers seek help adapting their operations to the “post-pandemic” work environment.

2022

In particular, digital technology will still dominate demand as customers seek to adapt their work schedules to the hybrid demands of post-pandemic life. However, 6% fewer members said this would be the fastest growing area in the coming months. By comparison, many more expect addressing sustainability issues for customers and strengthening supply chains to 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, the sector faces a number of challenges. Consultants in particular expect hybrid working to present challenges in their own business – with 67% citing the requirement for flexible/remote working as the most important issue. However, while many markets are currently in the grip of a “big quit,” that doesn’t appear to be such an issue for advisory firms. Employees seem willing to leave some slack for their employers as they look to accommodate more flexible hours or work from home – and 82% of respondents said they weren’t looking for a new role, whether in consulting or in another sector, 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 ‘big quit’ in the consulting industry and the majority of consultants believe their work balance -life has improved with less travel and more remote working.As customer demand continues to drive double-digit growth, the industry remains an attractive career option for our country’s brightest talent , but companies must ensure that training and development continues to be world-class and that the generation that has joined the pandemic is able to benefit from both digital and face-to-face learning.

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