The UK’s management consulting sector, which grew four times faster than the economy in 2016 (up 7.5 per cent to £7.3bn), could be hit by talent shortages because of Brexit.
These findings are published today (8th November 2017) in a new report from the leading research and strategy firm for the global management consulting industry, Source Global Research. The report says that whilst Brexit is expected to drive a lot of work for UK consultants, the market’s heavy reliance on the flow of talent across borders will leave it open to any interruption to the supply of talent.
The report adds that there are very real concerns about the ability of UK-based consulting firms to continue attracting the talent they need to service the demand that exists in the market.
As a result of this risk, the UK’s consulting market has slipped to fourth in the Global Market Attractiveness Index - a ranking of the world’s most attractive consulting markets in 2018. The Index, published in the report by Source Global Research, ranked the DACH consulting market top, Australia second, the US third, and the GCC fifth.
Edward Haigh, Director of Source Global Research, publisher of the rankings, said:
“The UK has dropped one place below the US because of our assessment of the impact of Brexit on the country’s talent market. Such is London’s reliance on a flow of talent across its borders—one leader of a global strategy firm recently told us that ‘100%’ of internal applications for positions came from outside the UK—that any interruption to that flow is likely to have a significant impact.
Putting this issue to one side, the UK is still a place in which clients show a remarkable propensity for using consultants. Relative to GDP the UK’s consulting market is twice the size of France’s and bigger, even, than that of the US.”
Robert Bosch, a Partner at BearingPoint, added:
“Brexit means that some global players are moving their presence away from London to the likes of Frankfurt, Paris, and to some extent Dublin—this is bittersweet for consultants in these locations. On the one hand it's positive that the local consulting market is expanding, but it's also causing them a headache. In order to expand somewhere, they need new talent, and they're doing this by headhunting the best talent from consulting firms.”
Using the biggest and most sophisticated model
of the global consulting industry, Source also identified DACH, Australia, the US, and the GCC’s consulting market in its top five for the following reasons:
- DACH’s consulting market top for third year running. With strong levels of growth, a good supply of talent, very high average revenues, and clients willing to put their hands in their pockets, there’s a lot to like about the DACH consulting market. While it might not be growing at quite the same rate as the US or the UK, it isn’t dealing with quite the same degree of political upheaval.
- The Australian consulting market is now the biggest in the world, relative to GDP. Behind this lie concerns about the domestic economy that are not only driving interest in conventional efficiency measures, but also forcing Australian clients to internationalise, and, in support of both of those, to digitise. While these factors are not exactly leading to stratospheric growth in the consulting market, it’s keeping the market buoyant.
- The massive US consulting market is the most notable climber in the rankings. Growth has held up remarkably well, fuelled by a digital transformation agenda that’s sweeping through every industry. And while the election of Donald Trump has created nervousness and uncertainty, it’s also created the prospect of change.
- The GCC’s consulting market remains the star among all emerging markets. Growth is running at decent levels compared to mature consulting markets, and average revenues are holding up well. Source data suggests that average revenues have also increased slightly over the course of the last year. Meanwhile, Saudi Arabia continues to push forward with its transformation plans; pressure is mounting on Qatar to prepare for the World Cup in 2022; Dubai is preparing for its Expo in 2020; and there’s even the tantalising prospect of oil prices recovering to some degree.
For more information on Source reports contact firstname.lastname@example.org or telephone +44 (0)20 3478 1207/ visitwww.sourceglobalresearch.com.