Andrew* is a 63-year-old partner in a small consultancy in England who finds himself with too much free time and too little money. Shambo, a 32-year-old associate management consultant in India, has the opposite complaint: His hours have increased dramatically as clients demand more work for the same fee.
Sierra, a 23-year-old associate from New York, feels “terrible” pressure to perform so she doesn’t get fired.
The experiences of these workers illustrate a unique set of challenges facing the global consulting industry, which generates about $860bn in annual revenue, according to US research group IbisWorld.
A business built to help others weather disruptions benefited from increased demand during the Covid-19 pandemic and expanded accordingly. But that has come to an abrupt end, as clients from banks to tech companies cut spending on advisers in an uncertain economy.
“We had the biggest consulting market ever. They had client work coming through the door, and they took it on sensibly,” said Yazdi Debu, senior client partner at Korn Ferry Consulting.
Now companies from Accenture to EY and McKinsey are cutting thousands of jobs. Valuations of consultancy businesses have been falling — one of the reasons EY pulled its Project Everest plan to separate its accounting and consultancy arms — while the industry’s reputation is under attack from scandals such as the South African firms’ misconduct.
A recent survey by Korn Ferry’s North American consultancy partners shows the level of concern among employees. Nearly 60 percent expect lower demand and more pressure on tariffs in the coming year. More than 80 percent were worried about having enough work, and nearly half expected further layoffs.
Despite continued optimism about the industry’s long-term future, “it’s a bit of a whiplash” after boom years, Debu said. Many individual industry members have been burned.
To get a broader view of how the upheaval is changing the business, which employs millions and influences multinationals and governments, the Financial Times asked readers who work in the industry for their experiences.
More than 320 responses, from consultants spanning Sweden to Singapore and Texas to Kazakhstan, provide a snapshot of industry engagement. Five clear themes stand out.
A third of advisors who responded to the callout said they have less work now than they did last year. It’s not a picture of an industry in freefall, but it helps explain the nervous mood. Many consultants who said they were working longer hours attributed the change to headcount reductions in their businesses.
Changes in workload were not evenly spread: consultants in North America and those working for the largest firms were more likely to say they had more work.
Some consultants said they were working 60 to 70 hours a week to prove their worth. “I work harder to attract clients because there is less work than before,” said one managing partner.
Those that were underperforming reported project delays or cutbacks in areas such as acquisitions and private equity investments. “I’ve been doing this for 25 years and this is one of the worst times I’ve ever seen,” said Matthew, a user experience consultant in London.
That echoes Korn Ferry’s findings. Six months ago, the biggest concern of US advisers was how to sustain demand, it said. “Now, ‘How do I keep all my teams engaged?'”
Analysts at William Blair found that consulting job postings fell 63 percent year-on-year in September, the lowest level on record. Source Global Research found that new areas such as artificial intelligence are still growing but three-quarters of US consumers have canceled at least some projects.
Overall, more than 40 percent of respondents to the callout said their work-life balance had deteriorated. For all the focus on Gen Z’s workload concerns, Baby Boomers were no less concerned about work-life balance.
The reasons for concern varied: nearly three-quarters of this group reported doing too much; But one in 10 said they had too little. “There is no balancing act now,” complained a packaging expert in Glasgow.
Want to quit
Perhaps the most concerning response to the survey from anyone running a consultancy was that one in three advisers said they hoped to do something different in five years’ time. In some cases it was because they were approaching retirement, but generally the message was from young professionals.
Consulting is considered a stepping stone to roles in the industries they advise on. But one 25-year-old vice president said it was “not worth the long-term career”. A 34-year-old engagement manager was more blunt: “It’s a job for spouse(s) and a bunch of juniors. . . (It) doesn’t make sense to work here unless you’re on a partner’s path.”
Of the roughly half planning to stick with counseling, many described it as varied and rewarding work. The chief executive of BDO USA told the FT in May that the accountancy firm was finding it difficult to recruit graduates for audit work because “they think it would be more exciting in a consultancy”.
“The reward is customer feedback . . . and to contribute to the growth of our younger colleagues,” said Nathan Owen Rosenberg, a 71-year-old founding partner of a small US firm. “I’ve been consulting for 38 years and tap dance to work every day.”
The threat of AI
This summer, McKinsey rolled out a generative AI platform called Lilli, which provides the ability to anticipate questions, test arguments and find playbooks, case studies and research to help its people spend more time with clients.
Nearly every consultant who responded to the callout felt that some of their work could be done by a model like this in the future, but some expected a huge upheaval from AI. Most expected some change but saw it as added to what they did, not threatened.
“At the end of the day, consulting is a people-oriented business and people trust people,” said one. Another pointed out that “Advisors thrive in times of change and ambiguity. This is in stark contrast to AI models, which recreate existing solutions and content.
Ilya Rybachin, a partner at a small firm in New York, said AI can take some of the primary tasks away from his team but not implement their recommendations. “The impact of consulting . . . comes from rolling up the sleeves and delivering change,” he said.
When the Covid outbreak hit, the consulting business, which is based on personal advice and frequent travel, had to change its way of working overnight. “(I) moved from 100 percent based on the client site to 99 percent remote,” said one project management office director.
Even as firms try to bring more consultants back to the office, many said a sharp reduction in travel has freed up time. Peter, a tax partner in London, initially put in the hours he no longer worked but later “reclaimed them” from his employer for more enjoyable activities such as walking the dog. “That’s ‘fault-free flexibility’ going on,” he said.
However, there are downsides to shifting to more remote work. Many said it was difficult to manage team members and keep customers happy remotely, which led to more transactional relationships and misunderstandings.
A 60-year-old partner in Los Angeles said her firm’s eagerness to be in senior leaders’ offices “for the sake of the culture” has increased pressure.
Another concern is the “blurring” of the boundary between work and home, calling people 24/7 and enslaving them to “drain” video conferencing tools.
“Partners and clients forget that behind the team meeting on their laptop at 7pm on a Friday, there are real people, who also have families and personal lives,” complained one consultant in Paris.
Is it all a big scam?
It is not surprising that the majority of consultants reject the idea (popularized in the book of that name) that consulting is a “big mistake”. More than 70 percent felt they added value.
“Management should be able to do most of our work. But they can’t. Our society greatly overestimates centralized business practices,” said a principal. Where consultation failed, some said, it was the fault of consumers not listening.
Michael, a senior partner at Transformation, said public sector clients “spend heavily on consultants whose core skill is delivering presentations that give everyone a warm, fuzzy feeling that something is being done” but ultimately reject big ideas.
Many said he provided an important independent point of view. Counseling can have similar long-term benefits to therapy, one partner argued: “Just as you wouldn’t use your spouse or mother as your therapist, a new and third-party perspective is needed.”
However, a minority of consultants strongly criticized the industry. “(I) have little faith that our work makes a difference,” said one: “Half the time we bring in an ‘independent’ perspective on what has already been decided.”
Another put it more bluntly: “It’s based on creating dependency,” she said.
*Respondents asked that their last names not be published