Consultants see work pick up, but not image

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The Independent Online
THEY are reluctant to admit it. But management consultants are on a roll. Not only has total fee income for the largest firms passed £1bn for the first time but the number of consultants has returned to the levels seen before the recession.

Brian O'Rorke, executive director of the Management Consultancies Association, announced these figures last week. But despite the improvement, he said last year had not been easy. Although revenue from manufacturing rose by more than 6 per cent, there was no growth from the minimal income levels in construction.

However, information technology and the public sector are still proving strong sources of revenue. More than half of association members' income now comes from IT - as a result of nearly all consultancy assignments having a significant technology element. Meanwhile, the value of work from the public sector grew by £44m to £253m to account for nearly a third of total UK fee income.

Moreover, British consultants are starting to find overseas markets fruitful. Income from the Americas and the Far East, in particular, more than doubled over 1994. In the former, this was because US companies are increasingly using Britain as a toehold for setting up in the European Union and in the latter because of the strength of the so-called emerging economies in that region. Revenue from the European mainland is also continuing to increase, partly as a result of the union's Phare and Tacis projects designed to help countries of the former Eastern bloc and former Soviet Union.

This growth does not suggest huge opportunities for individuals. While the rise in the number of consultants by 500 (to more than 7,200) marks a return to pre-recession times, Mr O'Rorke noted that the sector has become "extremely competitive, with the number of business advisers now as great as it will ever be".

He is also worried that the spread of "sole practitioner" consultants (often redundant managers) will force a cap on fee rates. This could reduce the ability of established firms to invest in research, development and training.

The organisation also acknowledges another problem with this trend - the somewhat poor public image of consultants, exacerbated by reports such as last year's investigation of their use by government.

Brian Small, the managing director of Ingersoll Engineers and this year's president of the association, believes the problem is at least partly a result of the profession's youth. "We've tended to think that as long as you satisfy the client you have done your job."

To convince the world of the consultant's important role in improving industrial competitiveness, the profession needs to persuade some of the 90 per cent of clients who are apparently generally happy with firms' work to talk about it, he says.

Since there is also a need to build a greater understanding of how potential clients can be assisted, the association is hosting a one-day conference in May under the theme "no room for complacency".