Where did all the consulting jobs go

"Where did all the consulting jobs go?" -- it's a headline I've had filed away to use whenever the current banking turmoil started to spill over into the consulting sector.

Yet after 2 days spent with 500-odd consulting recruiters, I have to conclude that the consulting sector hasn't yet been that badly impacted. With the exception of a few isolated hiring freezes and practice-specific redundancy programmes, there's been no bloodbath for the consulting industry thusfar. Indeed, within a couple of hours of the doors opening at our Consultancy Careeers Fair, word spread that one of the firms had already made an on-the-spot offer to a candidate visiting their stand. Towards the end of the event, a tour of the exhibitors confirmed each firm had earmarked dozens of candidates who were a perfect fit for roles they were currently looking to fill. So it's hardly all gloom and doom in the consulting market and readers would do well to remember that we've never experienced an absolute recession in consulting - only ever periods of below-average growth!

Clearly no sector is going to escape unscathed from the current economic turmoil - but it seems at least that the consulting industry has learnt its lesson from the dot-com crash and the over-expansion that necessitated mass-redundancies back then has not been allowed to occur this time round. And for now at least, new consulting jobs are still in relatively good supply...

The price of dubious advice - £100bn a year

Just seen a piece that appeared in the Observer this weekend, "The price of dubious advice - £100bn a year".

I'm once again incensed by the reporting of our industry as one built on false promises and deception. Take a read of the article and do post your thoughts on the following forum thread which I've created to allow us to discuss and rubbish this. For what it's worth, here's the reply I've sent to Simon at the Observer - though not holding my breath to see them publish it...

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Simon

Congratulations on an interesting piece in the Observer this weekend. However consultant-bashing articles do tend to miss one key argument when pointing the finger of blame at consulting firms – and you have overlooked it too. The trade body (MCA) figures show that 66% of each consulting firm’s cost base is the cost of its staff. So allowing for some profit margin, it would still cost Britain plc at least 50% of the current spend on consulting services to just kill off the consulting industry and employ these people in the corporate and public sectors instead.

More often than not, cost over-runs and project failures result from senior management bringing in consultants on a flawed brief. The outcomes are not properly defined; key milestones not established (or constantly revised as the brief is allowed to evolve mid-way through a project); internal resources not dedicated to the project such that the consultants’ meters are ticking but the required access to client staff is being denied. All these management failings would be exacerbated considerably if the pain of a significant bill and ongoing public scrutiny were not ever-present to concentrate the mind.

The current NHS IT investments are a case in point. Richard Granger was able to negotiate with consulting firms a series of risk-reward contracts that saw the firms face severe financial penalties if key milestones and objectives were not met. These financial penalties have now been triggered and at least some of the spend on this ambitious project has now been recouped. Are we really to believe that thousands of extra employees hired by the NHS could have achieved a more favourable outcome than that achieved by the consulting firms? That if employed by the NHS these consultants would suddenly have developed project management skills and capabilities that they were lacking from years spent working in the private sector?

No – the project would have had none of the public scrutiny and been able to recoup not a penny of the costs incurred if the consultancy route had been avoided. The consultants just make a convenient scapegoat and the headline figures of monies spent are always portrayed as an expense that would otherwise not have been incurred.

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Interested to read your thoughts and hope this turns into an interesting forum thread

Tony Restell
Top-Consultant.com

Market collapse? ... or business as usual?

There seem to be really mixed messages out there at present - lots of firms seem to be thriving and recruiting really aggressively. But then can consulting really be escaping any fall-out from the credit crunch and the barrage of doomsday headlines we've been seeing?

So I thought I'd turn to you our readers for the definitive view. Let me know your thoughts on the following 3 questions and the results of the poll will appear on screen when you hit submit. Hopefully we can get a couple of hundred responses this month and get a really good picture of what the UK consulting market is doing...

Take part in 1 minute survey

P.S. feel free to post replies to this blog post to share anecdotal evidence as well - either than the market is collapsing or that it's very much business as usual at your firm...

Thanks for participating.

Tony Restell, Top-Consultant.com

Consulting industry bounces back after talk of recession

This week I was invited to write a piece for the Consulting Special that appeared in the Evening Standard on 19th February. It's my take on the yo-yo fortunes of the consulting industry over the last few months - and the more positive landscape that now lies ahead. Would be interested to hear your thoughts on my take, so do submit your comments below...

Consulting industry bounces back after talk of recession

After several months of uncertainty, consulting firms now expect 2008 to be another vintage growth year for the consulting industry.

The last months could best be described as “nailbiting” for those at the helms of the world’s major consulting firms. The fallout from the global credit crunch had the consulting industry trembling. Week after week of gloomy headlines had produced an environment in which major corporate clients were reluctant to commit to any new initiatives. Did major corporations need to prepare for a slowdown, or embark on new growth initiatives? With the economic climate on a knife edge, CEOs of the world’s biggest businesses were undecided – and to an extent still are.

We’ve witnessed a difficult few months for consulting firms precisely because there’s nothing worse for them than a period of paralysis. In a booming market there are growth strategies and M&A opportunities to advise on. When businesses are cutting back, consultancies will be right there to help clients decide where to wield the axe. In either market there is business to be won. It’s the grey area in the middle that consultancies fear. With uncertainty about the economic outlook comes a hesitation to sign off new engagements. So after several years of double-digit revenue growth, the leaders of the world’s major consulting brands were staring at a possible consulting recession - if the world’s stock markets didn’t settle and market sentiments show signs of improving.

The problem these consulting leaders face is that their sector is more susceptible than most to periods of economic uncertainty. Within a six month period, the industry can be turned on its head. Firms that were so busy they were turning away business can find work drying up as paralysis prevents new engagements from being signed off. With engagements lasting an average of six months, consultancies face a collapse in their revenues if there are just a few months of economic uncertainty As we entered 2008, this was exactly the situation that consultancies were facing. Lots of new assignments were being discussed with clients, but few deals were actually being closed. The industry was just months away from having to implement cutbacks and redundancies – and with staff costs accounting for 66% of a typical firm’s cost base, redundancy programs tend to be far-reaching once Partners decide they are necessary.

Fortunately a corner has now been turned and the consulting industry is bouncing back. Whilst a few firms are still struggling, most are now reporting that clients are signing off on new projects – and skills shortages rather than a lack of new business look like being Partners’ major headache for the remainder of the year. A combination of interest rate cuts and improved market sentiments have ensured that business leaders cannot sit on growth initiatives indefinitely. Projects are being kicked off again and another bumper year is now being anticipated by consulting Partners. Everyone associated with the sector can breathe a collective sigh of relief.

The impact of all this uncertainty on recruitment has been pronounced. Industry website Top-Consultant.com reports that 22% of consulting employers have delayed the start of their 2008 recruitment drives as a result of the global credit crunch and resulting market uncertainties. January, usually a bumper month for candidates wanting to find a new consulting job, has been somewhat subdued. “Interview cycles have been prolonged by employers and offer letters have taken longer to get out to candidates” confirms Bryan Hickson, a Director at Top-Consultant. “Everyone has been anxious to avoid a situation where new hires were being brought on board just as the market might have been turning. As a result recruitment campaigns were scaled back and those candidates already in the recruitment process found themselves being stalled as much as possible.”

Now all that is changing and the volume of recruitment advertising is finally catching up with the improved market sentiments. A staggering 75% of consulting employers report they are looking to hire staff this year at least as fast as they did in 2007 – and 2007 itself was considered to be an exceptionally buoyant recruitment year. Yet having had recruitment more or less on hold in January, many firms now have some very sizeable hiring targets to hit and only 10 months of the year left to hit them. “We can expect to see a lot of inter-firm poaching of staff and a willingness to bring in talent from outside the consulting industry as the year unfolds” predicts Hickson. Rosier times, it would seem, lie ahead. Unless that is a severe recession bites, in which case a totally different type of cost-cutting consultants can expect to be in demand.