The consulting industry is expected to experience strong employment growth during the next decade. The U.S. Department of Labor (DOL) notes that the professional and business services industry (which includes consulting firms) is the second-largest and third-fastest-growing occupational cluster in the service-providing industry, expected to add more than 1.6 million new jobs by 2028. The effects of the COVID-19 pandemic on the private and public sectors dampened the employment outlook in the short term. But regardless of the state of the American economy or economies in other countries, consultants were still needed to help businesses and other organizations get back on their feet after the epidemic ebbed, as well as help clients with all types of non-epidemic-related issues.
Major factors that are encouraging employment growth for consultants include increased government funding of major infrastructure projects (such as high-speed trains, highway and bridge construction, and the necessary repair of existing roads, bridges, etc.), health care reform (including the revision or repeal/replacement of the Affordable Care Act promised by the Trump administration and the digitization of health records), and advances in technology [such as nanotechnology, biotechnology, renewable energy, Internet of Things, artificial intelligence (including machine learning), and data analytics software].
Growth in other industry sectors can also translate into opportunities for consultants. The DOL predicts that the following industries are expected to add the most new jobs through 2028:
- health care and social assistance
- educational services, private
- leisure and hospitality
- professional and business services
- transportation and warehousing
- financial activities
- other services
- state and local government
On the other hand, there will be fewer consulting jobs in manufacturing, which has suffered major job losses in recent years. Employment for consultants who provide services to governments at the local, state, and federal levels will also slow as a result of declining tax revenues and shrinking government budgets. “This has been particularly hard on some consulting firms, since governmental agencies are prime clients for consultancies,” according to Plunkett Research, Ltd. Top consultants will still find many opportunities with government employers, since the sector is so large.
Employment for management consultants—one of the largest specialties in the field—is expected to increase much faster than the average (or 14 percent) than the average (6 percent) for all occupations from 2018 to 2028. Companies in many industries are expected to rely more and more on the expertise of these professionals to improve and streamline the performance of their organizations. Many job openings will result from the need to replace workers who transfer to other fields or leave the labor force. The DOL predicts that “growth will be particularly strong in smaller consulting companies that specialize in specific industries or types of business function, such as information technology or human resources. Government agencies will also seek the services of management analysts as they look for ways to reduce spending and improve efficiency.”
While strong overall, the employment outlook for management consultants varies by industry. Employment growth is expected to be especially strong for management consultants in the following industries:
- home health care services: +47.2 percent
- services for the elderly and persons with disabilities: +35.3 percent
- funds, trusts, and other financial vehicles: +25.5 percent
- computer systems design and related services: +24.3 percent
- educational support services; state, local, and private: +22.4 percent
- management, scientific, and technical consulting services: +21.5 percent
- support activities: +19.2 percent
- software publishers: +19.0 percent
- government: +18.2 percent
Employment is expected to decline in these industries:
- newspaper publishers: -33.5 percent
- communications equipment manufacturing: -26.2 percent
- apparel manufacturing: -26.0 percent
- telecommunications: -22.4 percent
- postal service: -19.8 percent
- computer and electronic product manufacturing: -10.6 percent
- utilities: -2.8 percent
Experienced management consultants with strong track records in their specialty earn high salaries—a median of $95,560 in May 2018, according to the DOL, much higher than the average salary ($53,490) for all careers. Plunkett Research, Ltd. reports that top consultants at firms such as the Boston Consulting Group bill clients as much as $5,000 daily, plus expenses. Associates at top firms bill clients $1,500 a day. High earning potential attracts many people to consulting and makes for a competitive job market. The DOL advises that job opportunities will be best for “those who have a graduate degree or a certification, specialized expertise, fluency in a foreign language, or a talent for sales and public relations.”
Information technology consulting is growing as technology permeates nearly every aspect of business, and the use of social media, mobile computing, cloud computing and data storage, IT security, AI, and online employee collaboration expands. More companies (especially IT-dependent companies such as Amazon and Netflix) realize that technology is not just a subsector of their infrastructure, but a business strategy issue. As Bob Patton (vice-chair of advisory services at Ernst & Young Americas) told Consulting magazine, “There are 35 trillion gigabytes of digital information being created every year and clients are just inundated with all this information…this is not a technology issue, this is a business issue.” Companies will need consultants to help them analyze and use this data to improve their businesses.
The DOL predicts growth of 24.3 percent employment for computer systems analysts in computer systems design and related services through 2028. Many analysts who are employed in this industry work as consultants, helping companies reorganize their IT departments, transition to cloud computing, integrate AI into existing products (or develop new AI-enabled products), or tackle other IT-related problems. Forrester Research Inc. reports that the information security consulting market is “growing explosively because security and risk professionals often lack the skill and bandwidth to accomplish their increasingly difficult mission.” Significant players—and major providers of jobs in this subspecialty—include EY, Deloitte, IBM, Accenture, PwC, and KPMG.
Employment in human resources consulting also looks bright after several years of slow growth. “Consultants who assist firms in lowering employee benefits costs are in high demand,” according to Plunkett Research Ltd., “as are those who specialize in change management, employee retention and employee productivity enhancement.
Finally, Plunkett Research Ltd. reports that “in nearly all business sectors, consultancies that focus on projects that clearly reduce business costs and enhance operating profits in a reasonably short period of time will find a ripe corporate market (such as consultants who focus on cash flow enhancement, supply chain efficiency, and manufacturing efficiency).”
Projections for all industries came into question in 2020 when a novel coronavirus, which emerged in Wuhan, China, spread around the globe. With many nations taking steps to restrict travel and gatherings, business shutdown and unemployment rose. Companies encouraged or required their employees to switch to remote working to avoid close contact that might spread the disease. A report from the MIT Management Sloan School, however, noted that "thanks to a framework largely based on remote work and virtual communication, and the fact that it helps to have a guide through a global crisis, consultants might avoid a fate similar to the one experienced in the early 2000s," during the recession.
Another forecast, by Source Global Resource, noted that although "the market situation remains volatile and consulting firms rightly cautious, we see increasing evidence of more predictable demand around a 'COVID response' solution, combining a range of different capabilities. This has translated into an improvement in our forecast: We now expect the consulting industry to contract by 16% in the course of this calendar year, up from -17% last week."
An IDC report noted that the COVID-19 pandemic and the economic slowdown that resulted from efforts to stem the spread of the virus marked the first time in decades that both supply and demand were so upset in the global economy. IDC forecast that "the worldwide services market will decline 1.1% in 2020 and grow just over 1% in 2021. The new forecast is based on the Economist Intelligence Unit's projection that the real 2020 GDP will likely contract by more than 2%, with a sharp decline in Q1 and Q2 offset by recovery in the second half of the year." This will be a significant factor in the future of the consulting industry as well as many others.
The introduction of the COVID-19 vaccination in late 2020 and increased distribution in 2021 is expected to help stabilize the economy and help many industries, including the consulting industry, rebound. According to a report by ResearchAndMarkets.com, the global management consulting services industry is projected to grow from $146.1 billion in 2020 to nearly $180 billion by 2027, at an annual growth rate of 3 percent. In the human resources consulting sector, the countries that are expected to drive the annual growth rate a