Consulting in turbulant times

Madhur Dhawan

Services Marketing and Management

December 2008

Like all industry sectors, the consulting companies have also been biting there nails in last 6 months to see if the market is going to come back to normal and will the client companies start giving them the projects again. This time was very difficult because most of the sectors paralyzed during this period.

On one side the impact of recession was that the clients put their projects on hold, the positive side of recession for consulting market was that it added one more field to field where they could offer there services. All the major players in the market added crisis situation handling as one of the services in their portfolio and researched heavily on what are the various sector specific steps which companies can take in order to minimize the impact of recession.

During this period the consulting companies faced a major problem because of the workforce as workforce accounts for more than 60 percent of cost for a typical consulting company. A lot of proposals were discussed during this period with the clients but as there was a crash crunch situation in most of the sectors few and most critical projects were finalized and the deals were inked. There was a situation in the consulting industry where the manpower was been looked upon as a cost center as the resources were not being fully utilized. Generally it is seen that consulting companies get major projects during the first three months of the year as the financial year starts in the western markets. But since this January the markets were not in their usual form, most of the consulting companies saw a subdued beginning of the year. Thus even the recruitment scenario in the consulting market was bleak in the first quarter as most of the companies were finding it difficult to maintain its current human assets. Moreover consultants looking for a switch in their career had limited opportunity due to limited business.

Fortunately second quarter of 2009 has come up with a ray of light for the consulting industry; the confidence level in markets has rose and companies are again looking forward to invest in new projects, this means the consulting companies are again back in business and thus the manpower is required. But as the consulting companies are now in a very fragile state because of how the markets will be in next three to six months, companies are hesitant to hire fresh post graduates and graduates which required to be trained, instead they looking to hire experts who can give highest value for money on a relatively lower pay package. This has opened a window for people who are experts in their sectors but have not worked for consulting firms.

As today most of the post graduates from business schools across the globe look forward to work in consulting domain, they hope that pretty soon the market bounces and  they are in demand again.