Source’s latest data indicates that the global consulting market will reach a value of $US263bn in 2024. This signals growth of 6% on 2023’s disappointing market, with much of this year’s rise forecast to occur in the second half of 2024.

But what will this look on a sector-by-sector basis, and where are smart firms prospecting?

In plain sight

Energy and resources
When it comes to growth, energy & resources remains the top performing sector in today’s consulting market. Having hit a revenue total of $US21.5bn in 2023, it is set to grow at a market-topping 10% in 2024.

What is driving this investment in consulting by energy & resources clients? Put simply, they have the money (particularly within the energy sub-sector), so they are spending it. High commodity prices, investment into the energy transition, and the global rise in energy consumption have generated cash and clients are keen to invest: They want to create future-proof business models and stay ahead of their competitors.

Cybersecurity and data & analytics work are outperforming most services in the E&R sector, with growth rates forecast for 2024 of 12% and 14% respectively. Technology is the single-largest source of work, with the focus moving from strategy to implementation in 2024. There is also likely to be high demand for help navigating regulatory needs, with risk—where this sits in Source’s line of business model—set to be the second-fastest growing E&R service this year.

Finally, there is likely to be cross-business demand for consultants to help fill the skills gaps in larger incumbents that are finding it hard to attract the best new talent to a sector with ESG-related image problems.

Healthcare and pharma sectors
The small but vigorous healthcare ($US16.9bn in 2023) and pharma markets ($US9.2bn) are continuing to perform strongly, with growth of 8% forecast across both for 2024. These markets also likely have ready cash from their COVID booms, but there is also much excitement about new products (weight-loss drugs, like Wegovy and Saxenda, being prime examples), and about the potential of AI in drug development and other health-related innovation.

Tech is a clear enabler of growth in these sectors, and consequently data & analytics and cybersecurity services are forecast to grow at impressive rates as clients seek help in these mission-critical areas.

Keeping up with regulation is also a challenge, and this is one factor behind the strong risk services forecasts of 12% growth for healthcare and 9% for pharma in 2024. Operations work continues to perform, with growth of 10% forecast for 2024 as healthcare and pharma clients continue on their mission to drive up productivity, cut costs, and simply “get stuff done”.

Finally, it’s worth noting that spend in the healthcare sector is substantially influenced by whether organisations sit within the private or public sector, and also varies widely between countries. In the current economic environment, public sector healthcare markets are particularly sensitive to fee rates (more on the under-pressure public sector below).

Financial services
The financial services sector still dominates at 31% of the consulting market, with a global value of $US77bn in 2023. Despite its underpowered growth forecast of 5% for 2024, its size, needs, and willingness to use third-party support mean it will remain the most important consulting market for the foreseeable future.

Financial services clients have already invested heavily in consulting support around technology, but they need to keep spending. Consultants will be in demand to help clients succeed in a market that has tech at its heart, suffers from creaking legacy IT systems, and where agile, innovative entrants to the market are challenging the incumbents. And, in great news for firms, this is a market where new entrants are swiftly becoming large enough to buy consulting services, too.

As a result, data & analytics services are forecast to hit $US5.3bn in 2024, technology services $US9.7bn, and cyber $US7.8bn. Combined, these three service lines exceed the whole of the healthcare consulting market.

Other hot points will include risk and operations work. These are the largest two services in the sector—and with growth of 6-7%, some of the most dynamic.

Mining other seams

Public sector
With growth forecasts of just 5% in 2024 and 4% in 2025, consulting in the public sector is clearly facing headwinds. But this is a big and important sector, totalling $US25.6bn in 2023 and coming in at third in terms of size after financial services and manufacturing.

While the desire to invest may be tempered by a hangover from the high level of spend during the pandemic, a pause in decision making during a year of global elections, and the widespread desire to reduce the amount of taxpayers’ money spent on consultants, we still expect clients in the public sector to continue to seek out help from firms. Why? Because they have mission-critical work to do and lack the expertise and people that are needed to deliver.

Public sector organisations need to keep pushing forward to deliver on the promise of digitisation, respond to huge demographic shifts, and provide the services people are demanding from newly elected governments. They need to do all of this at a time when skills and capacity are in short supply. Highlights for consultants in 2024 are likely to be cybersecurity, technology more broadly, and risk work.

Retail
The final sector we have chosen to highlight is retail. This is the third smallest of our sectors, totalling $US18.5bn in 2023. Unlike the healthcare and pharma sectors, growth forecasts for 2024 are less than impressive at 4%, and the sector was one of the slowest growing in 2023, too.

The retail sector can be exposed to low margins and, at a time when consumers are feeling the cost-of-living squeeze, clients don’t have the free cash to plough into consulting. Clients also spent heavily on supply chain work during the pandemic and in response to conflicts and trade tensions, and so feel they have invested sufficiently there.

Firms looking for opportunities in this sector will need to offer a strong business case that talks clearly about value. Areas to focus on include forecasting customer demand (with data & analytics work set to grow at 8%), cybersecurity (set to grow at 6% in 2024), and rethinking operating models (with costs, competition, and climate weighing heavily on minds).

However, two of retail clients’ biggest goals are to drive growth and secure an edge over their competitors. Growth is an area where business leaders in this sector are often reluctant to place their trust in consultants—preferring to use in-house talent, where they believe the expertise sits. Firms that can offer strong, evidence-based propositions for growth services could unearth a real gem and win work in this hard-pressed sector.

If you would like to discuss any of the data that we reference in this article, or to delve deeper into our analysis of what clients want from firms in each sector, please get in touch.

 

Emma Carroll, Head of Content, Source

Your knowledge of specific industries will be the most important factor clients take into account when considering whether to hire you. But, if you're going to increase your investment in industry expertise—and most consulting firms are doing just that at the moment—where should you focus? Contact us if you'd like to know more about how Source can help you identify and size the high-growth opportunities by industry.