Like manufacturing companies, consulting firms carry stock and have faced significant supply chain challenges in the last two years. The post-pandemic boom of 2021-22, which was driven by pent-up demand from successive lockdowns combined with significant numbers of client staff leaving the global workforce, saw consulting and professional services firms recruiting new talent at a rate not seen since the dot.com boom of the late 1990s. A just-in-time approach to staffing, predicated on a flexible global labour market and healthy margins, gave way to a just-in-case approach in which professional services firms started carrying higher “stock” levels, much as manufacturers did with physical goods. Although concerns about the scale of recruitment activity were being voiced by firms themselves at the time, the fear of missing out made it hard for any single firm to apply the brakes.

When the rate of global growth in demand for professional services slowed sharply in the second half of 2023—a trend that’s continued through 2024—firms faced a twofold problem of falling utilisation (stock that couldn’t be shifted, in manufacturing terms) and intense price pressure. Many were forced to lay off staff as a result, something they’re extremely reluctant to do because they know that, when the recovery comes, their past record in redundancies will count against them in the recruitment market. But, as they move back to something like the just-in-time model, it’s become harder to move people around the world, meaning that they’re having to reconfigure their supply chains, much as manufacturers are.

And we think there are some lessons here for consulting and professional services firms. Speaking to senior executives in the fast-moving consumer goods sector as part of our research, it’s becoming clear that their move from just-in-case back to something closer to just-in-time inventory control has only been possible because they’ve made a huge investment in predictive data and analytics, most recently introducing AI-enabled models into their consumer research that are driving immediate and precise changes in stock levels.

This is a world away from traditional market research and it’s something that will need to be replicated in the professional services industry.

Thirty-nine percent of clients we surveyed recently said that one of the two biggest barriers they face in achieving their corporate goals is that they’re not keeping pace with their competitors.

However, although most clients say that speed of delivery is important to them when considering which firm to hire, they don’t see it as a particular strength of firms: This aspect is ranked 9^th out of 17 characteristics we ask about. Our interviews suggest deep-seated scepticism about the ability of major firms to move quickly.

In addition to lack of speed, clients are frustrated by what they see as the failure of consulting and other professional services firms to stay relevant. Forty-one percent of clients complain that firms are talking about issues that don’t resonate with them. Of 13 standard consulting services we track on a regular basis, only one—help with responding to regulation—garnered more support from clients this year compared to last, with significant drops in the level of client interest around technology strategy.

If professional services firms are going to follow in the footsteps of manufacturing companies and move from just-in-case to just-in-time talent models—a shift that current geoeconomic uncertainty makes both more necessary and more difficult—they’re going to need to be more proficient at pivoting to match clients’ changing needs and that, in turn, will require them to have better antennae of future change.

Being able to adapt depends on having the right information. Source’s market data & and bespoke client needs research can help you identify and act on the growth opportunities that really matter. To find out more about how our expert insight can help your firm stay ahead of the curve in the rapidly evolving professional services market, get in touch.