Drop­ping de­mand forces con­sul­tants to slash fees by 30pc

The Daily Telegraph - Business - - Business - By Michael O’Dwyer

CON­SUL­TANTS are be­ing forced to cut their fees by up to 30pc as de­mand drops and a pause in on-site work­ing dur­ing the pan­demic al­lows more firms to com­pete for con­tracts re­gard­less of their lo­ca­tion.

The UK con­sult­ing sec­tor could shrink by 16pc this year as busi­nesses rush to cut vari­able costs in an ef­fort to sur­vive the eco­nomic cri­sis, new re­search shows.

The down­turn is par­tic­u­larly acute in hard hit sec­tors such as re­tail where con­sult­ing rev­enue is ex­pected to fall 29pc this year, ac­cord­ing to Source Global Re­search, which analy­ses the pro­fes­sional ser­vices in­dus­try.

The rise in spend­ing on con­sul­tants to help com­pa­nies up­grade their tech­nol­ogy is also set to slow, with 26pc of those sur­veyed glob­ally say­ing they ex­pect to in­crease their use of con­sul­tants for “dig­i­tal trans­for­ma­tion” projects com­pared to 55pc at the end of 2019.

Com­pa­nies that do press ahead with up­grades could fo­cus on more straight­for­ward, es­sen­tial projects, lim­it­ing the fees that con­sul­tants can charge.

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