B2B Consultants Enjoying Booming BusinessJul 28, 2022 09:33PM ● By Dwain Hebda
Photo by Bill Sitzmann
In 2017, Inc. Magazine published an article entitled, “The Business Consulting Industry Is Booming, and It’s About to Be Disrupted.” The article detailed the ways that the consulting industry was becoming too entrenched and comfortable to adapt to, and adopt, change. It was disproven in 2020, though in fairness, partly due to factors the magazine couldn’t have envisioned.
In fact, the challenges of the pandemic’s strafing of the business community has provided consultants nearly endless opportunities to help companies manage through crisis and change, and ultimately emerge leaner, wiser, and positioned to succeed in the post-pandemic marketplace.
“What’s changed the most in general is the speed of change over the last three years,” said Rick Faber of Growth Guru in Omaha. “That’s brought lots of pressure on business. There’s been financial pressures. There’s been technology change pressures. There’s been people pressures where they can’t get talent. It’s really hard to stay disciplined when there are so many moving pieces in the
COVID, while highly disruptive, gave many companies a unique opportunity to step back and look at operational issues in ways that would have been difficult had business been operating at full capacity. This was good news for the consulting industry, Faber said.
“With COVID, everybody and their brother closed their doors and tightened down the hatches for about 30 days. Those 30 days were magical for consultants,” he said. “Owners of businesses during that time got a little time to think about things a bit. For many, it was, ‘You know what? We’ve been running way too fast and on the other end of this COVID thing, I want the company to be something else. We’re going to use this as an opportunity to pivot.’ And they immediately went to, ‘Let’s get some help to do that.’”
More than two years after the onset of the pandemic, the spike in consulting demand has yet to fully flatten out. According to a report by The Business Research Co., the global management consulting market grew from $892 billion worldwide in 2021 to $974 billion in 2022, a compound annual growth rate of 9.2%. The market is expected to reach $320.94 billion in 2026 at a CAGR of 7.9%.
In the U.S. alone, far and away the largest consultant marketplace, more than 900,000 people work in business consulting, per the U.S. Bureau of Labor Statistics, with future job growth predicted to average just under 100,000 new hires annually between 2020 and 2030, or at a rate of 14%.
BLS predicted demands will continue to be led by health care, government agencies, and information technology, particularly in the field of cyber security. However, other sources also noted consultants focused on helping companies improve sustainability and diversity, equity, and inclusion were all expected to gain additional steam as well.
Often, companies don’t hire such expertise full time for one simple reason.
“They couldn’t afford to,” Faber said flatly. “And because they can’t afford full-time [help], most businesses have to look at fractional expertise, which they can do for significantly less money than hiring somebody. They’re looking at ways of how to be competitive and have world-class services but not have to pay world-class salaries to make it work.”
Of course, consulting firms themselves haven’t been spared from adapting to pandemic-related change. Even in the flush market in which the industry finds itself, firms that adjust their operations to meet current working conditions are easily outpacing those that aren’t.
Forbes reported last summer that firms specializing in remote consulting are reaping substantial benefits over the face-to-face variety. The article noted a recent report by McKinsey that revealed 75% of prospects do not want to meet with consultants face-to-face, driving e-commerce and video conferencing to account for nearly half of B2B revenue. There is also the added benefit of creating greater profitability in consulting firms by removing top-line expenses, such as travel costs.
“That has to do with the change in remote capabilities, which has become more apparent since the pandemic hit,” said Chris Breci, vice president of operations for InfiNet Solutions of Omaha, an IT consulting and solutions firm. “The tools are there and they’ve really matured in the last five to 10 years, allowing us to do our job from anywhere. The remote capability is just a whole new level.”
Breci concurred with the theory that companies continue to seek out consultants over permanent hires due to cost, but he said the consultant model is also a good hedge against the ravages of the current, razor-thin labor market.
“Eliminating a single point of failure is so important for our clients in this day and age,” he said. “We are able to come in and really hit the ground running, meaning clients aren’t worried about one [full-time] guy leaving. They have a whole team behind this with the expertise of all the different industries that we’ve worked in.
“We are also able to supplement expertise for those who do have [full-time] IT support. Some of our clients have a level-one guy, and we only support them when they escalate to us. In those instances, the client’s needs get filled at a lower cost, because they just needed someone a couple days a week or via phone calls. It gives companies a lot
The current boom cycle, as well as changing client expectations, have put staffing pressure on consulting firms, especially since companies are demanding more of their personnel than was acceptable in the past.
“We are looking for people who are lifelong learners; we want people who are never satisfied,” Breci said. “Consulting places like us see a lot of different industries, there’s a lot of diversity, so we are looking for people who are good problem solvers and who are able to get out there and talk to people, interact, and build relationships. The days of the IT guy who just stares at his shoes are gone.”
This article originally appeared in the August/September 2022 issue of B2B Magazine. To receive the magazine, click here to subscribe.