Lots of pundits have come forward with opinions about consulting after the coronavirus. Will it make consulting harder? Will there be consulting projects? Will consulting even still exist?
What Changes Did Coronavirus Do To Consulting Job and Firms
The coronavirus pandemic had a significant impact on the consulting industry, bringing both challenges and opportunities. This reshaped the sector in profound ways. Here’s a detailed look at the main effects:
1. Shift to Remote Work
- Challenges: Consultants that were used to direct client interaction, had to quickly adapt to remote work. This change disrupted traditional ways of engaging clients, collaborating with teams, and delivering projects.
- Opportunities: The adoption of digital tools like Zoom and Microsoft Teams enabled consultants to work more efficiently. It reduced travel costs and allowed global teams to work together seamlessly.
2. Decline in Certain Services
- Industries severely affected by the pandemic, such as hospitality, retail, and aviation, cut back on consulting spending. This led to a decrease in strategy and growth projects. Firms had to adjust their services to focus on crisis management and cost-cutting.
3. Surge in Demand for Specific Expertise
- Digital Transformation: As businesses accelerated their digitization efforts to remain competitive, there was a surge in demand for consultants with expertise in technology, automation, and digital strategy.
- Crisis Management: Companies sought consultants to manage supply chain disruptions, workforce restructuring, and operational resilience.
- Healthcare: The pandemic increased the need for consultants with knowledge in public health systems, vaccine strategies, and healthcare supply chains.
4. Budget Constraints and Fee Pressures
- Many clients reduced their consulting budgets, leading to increased competition among firms. Clients demanded more value for their money, pushing firms to deliver quicker and more cost-effective solutions.
5. Focus on Resilience and Sustainability
- The pandemic highlighted the importance of business resilience. Consultants began offering services to help clients build agile operations, develop risk mitigation plans, and integrate sustainability into their strategies.
6. Talent and Workforce Challenges
- Recruitment slowed in 2020, but by 2021, demand for consulting talent rebounded. Hybrid work became the norm, changing the traditional “on-site” consultant role.
7. Growth in Niche Areas
- Smaller consulting firms specializing in remote work solutions, cybersecurity, and e-commerce thrived during the pandemic. Larger firms also expanded into these areas.
8. Emphasis on Mental Health and Well-Being
- Within consulting firms, the stress of adapting to pandemic pressures led to a greater focus on mental health support, flexible working arrangements, and employee well-being initiatives.
9. The Rise of Independent Consultants
- Economic uncertainty prompted layoffs and voluntary exits, leading to an increase in freelance and independent consulting. Platforms connecting consultants with clients saw a significant boom.
10. Geographic Diversification
- Remote work broke down location barriers, allowing consultants to expand their client bases globally. This opened up new markets they couldn’t access before.
Travel
One thing for sure is that it will change in the short-term. Consultants travel more than more than almost any other profession and they will have to work from home a hell of a lot more.
In reality, they can do most of their jobs that way. The main thing they actually lose from operating from home is not getting a feel for a company. They can’t meet and speak with employees and get a qualitative assessment that Excel doesn’t offer. By all accounts, it sounds like consultants have been working the same hours from their homes over the last few weeks as they would have done at work.
Sackings
It is inevitable that some people will lose their jobs. As firms shrink in the economic downturn, it is highly likely that some consultants will have to leave. Moreover, consultants will be working on their personal business ideas and putting their network to use for exit opportunities. They might leave by choice!
Consultants belong to three categories. There are finders (partners who find work), minders (who farm the projects), and grinders (who grind out the analyses). It may well be that the minders who were unlikely to make partner anyway, will be departing.
And the interns and analysts of course. As the work dries up and no-ones needed for the dirty work, consultancies will be cutting back on their investment in people. In the last few weeks alone, there has been a run on rescinded offers. Marc Cosentino, founder of Case in Point, offers his thoughts on this here. Except McKinsey, Bain and BCG that is, who are staying firm on their new recruits.
Here is McKinsey Managing Partner, Kevin Sneader, dishing out his take on what happens next:
New work
Partners will also have to toil extra hard to get new contracts. The Coronavirus has created so much uncertainty that most businesses just don’t know when they will be operational and what problems they will face.
On the flip side of this uncertainty, new projects will also spring up. This is a novel scenario for firms and they will probably be attracted by the offer of some out-the-box thinking to get them back up and running. Some companies like Bain have already been putting out feelers for this. They have set-up a crack-plan for dealing with the outbreak, which they probably hope will attract some business!
McKinsey have similarly explored the broader economic impact with a view to helping with recovery.
McKinsey state very honestly that the outbreak is above all a human tragedy. Sadly, some of the firms who don’t open their statements in this way, might well be rubbing their hands at the opportunities. Of course, when businesses have problems, they need consultants.
BCG have perhaps been the most insightful of the lot. The firm has engaged directly with the virus as a consulting project of its own, suggesting ways to deal with the impact.
The image below suggests its response for businesses, but BCG have also been thinking about health policy and government. The firm has emphasised that weathering the crisis means being a part of the solution.
A Catalyzis of Change
Despite the challenges, the pandemic catalyzed transformation in the consulting industry. Firms that adapted quickly to new demands, embraced technology, and realigned their offerings have emerged stronger. This paves the way for a more flexible and diverse consulting landscape.
