UK consultancy sector almost doubles in size in past five years as export demand strengthens, key industry report finds – Conservative Post

The growing success of the UK consulting sector is confirmed by the latest annual reports from the Management Consultancies Association (MCA), which reveals that the industry has almost doubled in size in the last five years, according to independent research by Savanta.

The growth rate for MCA member firms in 2023 was 11%, and industry-wide forecasts show that the consulting sector in terms of revenue grew from £10.56 billion in 2018 to £20.4 billion in 2023, making it the second largest consulting sector in the world.

UK consulting revenues almost double in five years from £10.56bn to £20.4bn as sector sees double-digit growth in 2023 driven by digital transformation and specialist energy and net zero consultancy
Exports have increased by £3 billion in 5 years and now account for 28% of total revenue
More jobs outside London than in the capital, with more regional offices
The number of jobs supported by the industry in the UK has increased by 66% in 5 years from 30,000 (2018) to 50,000 (2023), but is down slightly on last year as staff turnover rates remain low
Training and development increases by 12% across the industry as companies invest in high-tech skills for the future

UK consultancy is becoming an industry that governments and businesses around the world are turning to as they embrace the AI revolution and work towards a zero carbon future. Growth was seen from businesses of all sizes, with large enterprises leading the way (up 13%), driven by ongoing projects from existing clients and increased demand from sectors such as energy and resources (up 38%), transport (13%) and financial services (11%).

One factor behind this success is the growing demand for UK consultancies from clients around the world. Growth in services exports continues with 28% of UK fee income now coming from overseas – an increase of £3bn in five years as global clients increase their demands for UK expertise in both traditional areas of expertise and new and emerging high-growth sectors. Fee income from Europe remained strong (15% and unchanged from 2022), while outside the UK and Europe the most popular market was the US, followed by regions such as Australia, Japan and the UAE.

Tamzen Isacsson, CEO of MCA, said:

“During this challenging period of change and uncertainty, consultants are being called upon as trusted advisors and sector specialists, offering experience and expertise, particularly in technology, cybersecurity and net zero emissions. Our sector is a great British success story, generating increased productivity and efficiency for UK-based businesses and proudly exporting record services abroad.

“The UK-based management consultants help tens of thousands of clients around the world navigate a changing landscape, helping them adapt to a future where multipolarity, net zero and artificial intelligence are the new norm. We also operate in a challenging economic climate where clients are focused on the competing demands of ensuring survival, reducing costs and at the same time trying to lead.”

The consulting workforce has expanded significantly over the past five years, driven by client demand, growing 66% from 30,000 employees in 2018 to more than 50,000 in 2023, although overall headcount is down 3% from a year earlier, as firms adjust their workforces and turnover slows sharply from 17% in 2022 to 12% in 2023.

For the first time ever, more new hires were made outside the capital than in London (52% compared with 48%), with consultancies helping to drive regional growth across the UK across 312 regional offices. New hires included 2,348 graduates and 736 school leavers. Small and medium-sized businesses have the largest proportion of employees outside London, with the North West and South West having the largest proportion of staff. Manchester, Leeds, Bristol and Edinburgh continue to be the most common locations as hybrid working and changes to the consulting workforce have led to the sector being opened up to a wider range of talent. As well as junior consultants, these opportunities have also meant more professionals with experience in other sectors are joining consultancy to provide clients with specialist expertise in a range of complex areas.

The consulting industry itself is undergoing a period of change and transformation in terms of reskilling its workforce in areas such as technology and sustainability expertise. This change is key to ensuring that MCA member firms are able to meet future client demand opportunities and remain competitive globally. As part of responding to these changes, the average consultant spent 8.4 days on their personal training and development, an increase of 12% from 2022. The focus was on GenAI training and the Chartered Management Consultant Accreditation (ChMC), which has seen over 1,300 consultants achieve Chartered status.

More firms than ever before are collecting diversity and inclusion statistics to help ensure their workforce reflects the customers and communities they serve. In addition to a small improvement in the number of women in the workforce, there has been a 10% increase in the number of women in leadership roles since 2018, as almost a third of partners are now women (31%). While the percentage of ethnic minority representation is in line with the working-age population, progress on Black representation at leadership and partner level is still lagging behind, with 1% of employees at this level reporting this ethnicity for the fourth year running. However, the number of people identifying as LGBTQ+ increased from 4% to 7% in 2023, while 6% live with a disability and 4% have a neurodiversity disorder, all of which are categories where the percentage of firms collecting data has increased.

Tamzen Isacsson, CEO of MCA, added:

“As the UK seeks to level up, making the most of our fantastic regions, cities and towns, consultancy is also driving regional growth. For the first time, more consultants have been recruited outside the capital than within it, and the number of offices has increased significantly.

“Our industry is becoming more representative of the society we serve. There has been positive progress in the past year in the representation of women, as well as people with disabilities, neurodivergent people and people who describe themselves as LGBTQ+. However, in a period of rapid change, our focus and efforts on this agenda remain critical and more work needs to be done to ensure greater diversity at leadership level.

“Following record industry hiring in 2022 and reduced turnover, coupled with a return to more normal levels of growth in the consulting industry, some firms slowed hiring while others made layoffs to adapt, leading to lower overall headcount than the prior year, but overall headcount has grown significantly over the past 5 years.”

The MCA 2024 Annual Industry Report provides an unparalleled assessment of the performance of the UK’s leading management consultancies, which are part of the Management Consultancies Association. The report examines fee income data provided by member firms in recent years to determine the size, diversity and growth trajectory of MCA member consulting business, as well as the wider consulting industry. Independent market research agency Savanta partnered with the MCA to collect and analyse industry data for the 2024 report.

For more information, visit www.mca.org.uk

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