Professional service sector sees lowest redundancy rate, for now

While the consulting industry has enjoyed unrivalled job security over the last decade, that may be on the verge of changing. As large firms continue to downsize headcounts amid slowing demand, around 3% of employees in the professional services sector faced redundancy in the last year – and the figure may rise by the end of 2024.

A series of unprecedented crises saw demand for consulting remain high through the last ten years. Problems relating to Brexit, the pandemic, and supply chain chaos meant many organisations turned to external experts to boost capacity and bring in much-needed skills. But with the rampant inflation of the last year cooling client spending, many firms have seen demand slow after they had already committed to historic hiring campaigns.

In first response to this, the number of job vacancies at UK consultancies tumbled by over 80%. Illustrating the extent of this, data from labour market analytics firm Vacancysoft – originally reported on by Bloomberg – found that McKinsey and Company, Bain & Company, Boston Consulting Group and Accenture posted just 248 jobs in 2023 – down from 1,389 in 2022 and 1,764 in 2021.

But as firms continued to scramble to preserve their bottom-lines, eyes soon turned to another tactic. Redundancies are increasingly on the cards at the industry’s largest operators – which will come as a shock after a period of sustained stability in consulting.

According to research from Money.co.uk, the UK’s professional services and scientific sectors were tied in 2023, with the lowest rate of redundancies. By Money.co.uk’s definition of the industries, both sectors only saw a total number of 6,000 redundancies in the sector. That was proportional to around 2.7% of the roles held in the industries.

In contrast, information and communication firms laid off around 19,000 roles. That was equivalent to 13% of roles in the sector.

But the association of professional services with job security is changing fast, according to the researchers. Exemplifying why, Big Four advisory and audit firm KPMG has announced a fresh round of 200 redundancies, signalling concern for workers in the sector – with its rivals Deloitte, PwC and EY having also signalled their intent to downsize their headcounts.

Speaking on how firms in the sector might avoid the need for redundancies, Kyle Eaton, Money.co.uk business bank accounts expert, commented, “No matter your chosen industry, technology will likely play a key role in your operations. Explore how you can use technology to streamline processes, enhance customer experiences, and improve efficiency. Meanwhile, build a network of mentors, advisers, and peers within your chosen industry. Their insights and experiences can be invaluable in navigating difficult times and avoiding common pitfalls.”