Bad News For Aspiring Consultants?

Earlier this year an article from the Financial Times, stated that the UK's consulting market will fail to grow for the first time since 2020 due to a struggling economy and geopolitical tensions causing businesses to spend less on corporate advice.

The retail, telecoms, pharmaceutical and manufacturing sectors are all expected to cut spending on consultancies, putting pressure on the UK consulting market (worth around £16bn) that boomed after the pandemic due to management teams seeking external advice to navigate the disaster that was the global pandemic. 

The effects of this slowdown have been seen across the consulting industry. For example, Big Four firm EY reduced its global workforce in the past year due to a slowdown in the demand for its consulting services which led the firm to post its weakest revenue growth since 2010. In its annual report, the firm said it employed 393,000 people at the end of its fiscal year in June which was about 2,450 fewer than the previous June and the first time in 14 years it has cut headcount.

 It’s undoubtedly a challenging time for the industry and aspiring consultants like myself, who have been navigating a tough job market in consulting. But is consulting doomed and if so those that mean that aspiring consultants are cooked? 

I don't believe so, based on my outlook for the future of hiring in the sector. While it's difficult to predict, several indicators point to a potential uptick in hiring.

In November, the Bank of England reduced interest rates by 0.25 percentage points to 4.75%, which could stimulate economic activity and provide companies with more capital to invest in consulting services, leading to greater demand.

Many consulting firms over-hired in response to the increased demand during the global pandemic, and are now recalibrating their staffing levels. While UK consulting firms may not hire at the levels seen in 2021, the demanding nature of consulting often leads to high turnover, with analysts leaving after 2-3 years to explore new career opportunities. I like to call this the "law of the consulting jungle," meaning there will always be openings for new entrants.

Additionally, sectors like renewables—projected to surpass a global market size of $2 trillion by 2030—could drive a surge in demand for consulting services in this rapidly growing field.

To conclude, despite the current challenges, aspiring consultants should remain hopeful, as the industry is likely to recover and continue offering rewarding career prospects.

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Best Regards,

The Financial Files