But a hopeful outlook doesn’t diminish the pressure around costs: Almost three quarters of clients (72%) told us their profit margins shrank in the last quarter.

Against this backdrop, productivity improvement is critical. Forty-two percent say it’s one of their top three strategic priorities, and 25% say the same of cutting costs, up from 34% and 9%, respectively, in Q3 2022. Clients are four times more likely to say that productivity improvement is a priority than M&A activity.

Fifteen months ago, when we first asked clients whether they would be prepared to use consultants to help them improve productivity, the messages were mixed, to say the least: Only 12% were emphatic that they would, while 42% said they’d mostly rely on their own in-house resources, and 46% that they’d prefer to do the work themselves, except in select areas. Asked why they were reluctant to turn to outside help, the most important reason—cited by 40% of clients and almost twice as important as the next most important factor—was that they, the client, were more likely to identify potential improvements because they were far more familiar with their organisation.

However, despite many clients professing their hesitancy last year, our latest research reveals that only 12% are not using consulting services around productivity improvement, 70% are using them to some extent, and 17% to a heavy extent. What’s more, the proportion of clients who say that consulting firms’ lack of familiarity with their organisation is a reason for not hiring them in this area has halved to 19%.

Most of the other reasons for not hiring consultants have diminished as well, but that doesn’t mean clients don’t have concerns. The biggest disincentives to using consultants today are concerns around the long-term value of consulting support: Twenty-six percent of clients said that it’s hard to measure the impact consultants have, up from 22% in 2023, and 22% that any improvement the consultants make will only be temporary, around the same as last year. In a couple of areas, the picture is significantly more negative: The proportion of clients saying they’ll learn nothing new has gone up slightly, and the percentage saying that consultants take too long to implement their solutions has tripled.

How should consulting firms respond to these concerns, if they’re to maximise their ability to win work in this critical market? The answer to this is both easy and difficult.

Easy because when we ask clients what consulting firms should do differently, they’ve concrete suggestions. A quarter of clients say they’re looking to firms to carry out robust research into how organisations can improve productivity, and a fifth that firms need to provide more evidence of their past success in making a difference.

But it’s also difficult because clients’ opinions are less strong than they were. Last year, there was a clear leader: Thirty-seven percent of clients wanted consulting firms to be proactive in suggesting concrete ways to improve productivity; only 18% say the same today. We don’t know exactly why this has changed so dramatically. It could be that consulting firms haven’t been sufficiently proactive, and clients have simply given up expecting them to be so. Alternatively, consultants may have been coming up with ideas that won’t deliver concrete results. Clients are now starting to look at a different solution: Last year, when political and economic tensions soared, only 3% of clients thought that consulting firms should be paid for productivity work based on the results they deliver, a proportion that’s jumped to 14% in the latest data.

So here, in a nutshell, we have evidence of the quandary that clients we interview often describe. While recognising they need the help from consultants, they’re uncertain about the long-term concrete value the work will add. To solve this, they’re likely to demand more in the way of performance-related payments—and the consulting industry needs to be prepared.