The UK’s consulting market has gone from strength to strength in the last 12 months, with the industry’s representative body reporting activity growth of 25% through 2022. According to the Management Consultancies Association, this saw Britain’s consulting sector bring in around £18 billion in revenues for the year.
The figures come as part of an annual release from the Management Consultancies Association (MCA), which uses the performance of its members to gauge the size and health of UK’s management consulting market. With the UK economy still facing major uncertainty, due to the pandemic, supply chain disruption, and geo-political tensions, this data has become a particularly important weathervane regarding the health of the market.
Amended figures from the MCA released in the summer estimated that the UK’s consulting sector grew by 18% in 2021, hitting revenues of £14.4 billion. And while the wider economy continues to flirt with recession, amid record rates of inflation and a collapse in consumer confidence, the advisory market has continued to thrive.
According to the MCA’s latest report, the representative body estimates the consulting market enjoyed double-digit growth again in 2022. In fact, the market even accelerated on the previous year’s rate of growth – with the MCA suggesting that ‘activity’ – which the organisation defines as income – climbed by 25%. The notable performance of consultancies has subsequently attracted praise from the UK Government.
Commenting on the findings, Nusrat Ghani, Minister for Industry and Investment Security, said, “This encouraging survey from the MCA highlights the continued strength and growth of the vibrant UK consulting sector. Growing demand in areas such as digital transformation and sustainability advice is already creating thousands of new jobs across the UK.”
The MCA also surveyed leaders from across the market, to assess sentiment. A 48% portion of respondents told the MCA that their firm’s growth was better than expected. Looking at the growth of its members in comparison to its report from July 2021, the MCA estimates that the whole UK consulting sector has gone from revenues of £14.4 billion to £18 billion.
Tamzen Isacsson, MCA Chief Executive, said, “In times of economic uncertainty and rapid change, the UK’s management consultancy industry continues to grow significantly due to consultants’ unique position as vital and trusted advisors as clients navigate unprecedented challenges. This strong demand for services means firms are recruiting intensively to meet demand and it’s positive that this survey shows more evidence that our sector is increasingly diverse and providing huge opportunities for talented individuals from across the UK regardless of their background or location.”
Looking ahead, though, respondents were cautious when it came to their optimism. While consultants in the digital and technology, energy and resources, and health and life sciences segments expect to experience high rates of growth in 2023, many also expect economic conditions to present a more significant challenge in the year ahead. A 39% chunk of respondents said that a general economic slowdown was the biggest challenge they faced, along with 31% identifying reduced spending due to adverse economic conditions. Both these were considerably higher than the 18% and 20% recorded respectively in last year’s survey. Meanwhile, the challenge of an overall slowdown in the global economy has tripled since 2022, from 10% to 28%.
At the same time, retaining talent remains a major hurdle for many firms amid the ‘Great Resignation’, and a widely reported shortage of digital skills. While 57% said a competitive salary remained the best incentive they could offer to access the right talent, 39% added a better work life balance was a key policy. To that end, many firms are making use of hybrid and remote working – with 60% of respondents surveyed saying they were more satisfied with their job as a result of the adoption of hybrid working. On average, the days that employees wish to spend in the office now match the number of days they currently visit offices – an average of two days per week.
