First, the good news. In the second half of 2020, we saw a shift in clients’ overall expectations, with a greater proportion expecting to need more external support in the next year. This was, therefore, an early sign of a consulting market that was recovering from its COVID-induced paralysis: Clients, after months of operating hand-to-mouth, felt they could start to plan for the future. Happily, the same is true now: In our most recent research, based on around 1,600 respondents in the US, Europe, and Asia, 62% said that they expect to use more consulting support in the next 12 months. Anecdotally, demand is being driven by three main factors: Clients are looking for help transforming their technology, they want to grow their businesses (cost-cutting is no longer enough in this persistent polycrisis), and they’re looking for better solutions to the problems they face.

And now the bad news.

If we switch to asking clients where they plan to make most use of consulting support, the picture that emerges is one in which clients, while accepting they’re going to need help, don’t appear overwhelmed with enthusiasm for specific services.

Demand for technology-related services remains strong, with 31% of clients saying tech implementation is an area where they’re most likely to use consulting support, and 28% stating that they’ll need help adopting emerging technologies. Productivity improvement, which clients believe will be heavily dependent on the better use of technology, also does well, as do data & analytics, and cybersecurity. Just under a quarter of clients say that technology strategy will be a focus of investment, but this is significantly down on the 43% of clients who cited it last year. Interviews we’ve carried out with clients point to a very specific reason for this substantial drop: They feel they have done enough strategising and want to double down on implementation now.

*These areas were not asked about in 2023

However, for all but one of the consulting services we asked about (the exception being regulatory compliance), the proportion of clients saying they’ll be spending substantially has dropped. For example, in 2023, 25% of clients said they expected to spend heavily on consulting support on risk management, but this year only 20% do; similarly, 19% expected to spend heavily on financial management consulting but only 11% say that’s the case now.

But it’s important to note that the drops in these figures don’t necessarily mean that clients aren’t investing in these areas at all, but rather that they don’t expect the latter to be the primary focus of their consulting spend. In other words, they may be using their own, in-house resources to do the work involved. Sometimes that shift will be for good reasons: Clients don’t want to be dependent on consulting firms for skills that they, clients, will need in the long-term: That’s certainly the case where sustainability and ESG-related work is concerned—even though clients know it will be difficult to recruit permanent employees with skills in this area. This same shift also explains where many firms have seen a downturn in supply chain work: In light of tectonic shifts in geopolitics, more clients want to have strong in-house capability in this area.

That the proportions of clients who expect to use consultants’ support around revenue growth and in the development of new products & services are so small (5% and 2% respectively) tells a slightly different story. Although we don’t have comparable data for last year, our sense from interviews is that these are areas where clients typically don’t think consultants can help. “It’s the responsibility of the leadership team to grow the business,” remarked one client we interviewed recently, “not a consulting firm.”

Languishing near the bottom of the list, demand for people, HR & change work has been the biggest casualty of the polycrisis, much as it was in 2020. It’s a lack of innovation on the supply side that’s the chief culprit here. Low growth in demand for these service over the last ten years has meant that consulting firms haven’t invested in new ideas—and, not surprisingly, clients don’t think consultants have anything to add beyond what they can do themselves. “Consulting firms keep coming and talking to us about workforce planning,” commented another client. “That’s just so ‘COVID’.”

And it’s that observation that takes us full circle. Clients were similarly disenchanted with consulting firms’ offerings in late 2020 (then, firms were talking about organisational design and hadn’t yet seized on the concept of workforce planning). What clients felt then, as they say they feel now, is that consulting firms’ offerings aren’t well-aligned with what they want. The language they use to describe their offerings subtly jars; the terminology doesn’t resonate; the thinking doesn’t quite align.

Why? A third client summed this up: “Consulting firms aren’t listening to us. They’re trying to sell us what they’ve got, not what we need.” If we want the consulting market to rebound as it did in 2021, that needs to change.

If you’d like more information about which services are set to grow over the next 12 months to inform your investment plans, or if you could use more insight on where clients feel their needs aren’t being met, then get in touch.