Consulting business expected to enjoy another boom year
Despite growing uncertainty coupled with hostile macro factors, the country’s management consulting business is forecast to continue expanding this year, with local corporations increasingly seeking strategic preparations for economic downturns.
Market insiders say that the local consultancy business witnessed the highest demand for their advisory services during the past couple of years since the early 2000s, as corporations were busy looking for survival strategies during the pandemic.
While there was growing demand for consultants’ advisory services from local companies to adapt to the fast-changing market, the consultancy industry has had a limited recruit pool available. Top firms like McKinsey Korea, BCG and Bain &Company have each increased their hiring of consultants, but the number of experienced top-tier management consultants falls short of the increasing demand.
The needs for strategic management advisory services have increased in alignment with the growth of the global M&A market last year. According to a report by Bain &Company, the total size of M&A deals globally amounted to some $5.9 trillion, a 60-percent jump from the previous year.
Also, consulting firms have become more and more specialized in major deal practices, actively joining procedures like commercial due diligence (CDD), delivering their independent validations for deals, rather than staying slightly out of the center of key deals in strategic settings or post-merger integration (PMI) procedures.
“It’s true that the local consultancy industry has been enjoying a favorable environment during the past couple of years. Although it’s difficult to pinpoint the exact single cause of the market boom, pandemic-led corporate needs such as rapid innovation and structural change, which were accompanied by accelerated digital transformation in the country, are believed to have been among the key reasons,” an official from Boston Consulting Group (BCG) Korea told The Korea Times.
Another market insider also pointed out that while most consulting firms in Korea were fully booked throughout last year, corporate clients now ask more for management strategies on how to respond in an agile manner to secure growth amidst global economic downturns.