The industry is also expecting double-digit growth rates in Germany in the current year.
(Photo: Imago)
Dusseldorf The consulting industry is self-confident when it comes to its business in Germany. After a record year in 2022 with a sales increase of 15 percent, companies in Germany are again expecting significant growth in 2023, namely by twelve percent to a business volume of 49 billion euros.
This is shown by the industry study on the consulting market 2023 presented on Wednesday and the business climate survey by the BDU association for March. Accordingly, four out of five consultancies expect an increase in sales for the current year, more than every tenth company even expect growth of more than 20 percent. 400 consulting companies took part in the survey, representing a total turnover of 3.6 billion euros.
“We are very confident that we will continue to grow strongly,” said BDU President Ralf Strehlau on Wednesday. The consultants are particularly in demand for the top topics of sustainability, digitization and, for the first time in years, in the area of reorganization and restructuring. There is a lot to do in the energy, health, chemical, automotive and public sectors.
The consultant boom is waning worldwide
The profitability of the consultants is also increasing. “It’s not just the still lower travel costs. We see an increasing decoupling of growth and new hires,” said Strehlau. For example, the percentage of employees who work for the consultants has fallen from 26 to 21 percent. Digitization makes this possible, especially the use of artificial intelligence. There are currently 220,000 people working in consulting in Germany, just 1,000 more than in 2021.
Internationally, the boom in the industry has recently stalled. Possible job cuts at McKinsey, the number one strategy consultancy, and at the world’s largest IT consultancy Accenture had recently caused negative headlines. McKinsey is even reviewing its own business model.
>> Read about this: McKinsey questions its own strategy: “Our business model no longer fits”
The world’s second-largest strategy consultancy, the Boston Consulting Group, did not announce any redundancy plans either, but at eleven percent in 2022 it did not grow as strongly as before. In Germany, according to their own statements, advice was able to increase by 21 percent again last year.
It is unclear why Germany is bucking the trend. Dietmar Fink, Professor of Management Consulting and Managing Director of the Scientific Society for Management and Consulting (WGMB), says: “Basically, companies worldwide are facing the same challenges – massive upheavals combined with great uncertainty.”
However, many consultants in this country have succeeded particularly well in “making themselves indispensable”. As a result of rationalization measures in middle management and in view of the low birth rate, many companies would have outsourced activities to consultants without whom they would not be able to maintain their day-to-day business. In the process, some “historical dependencies” had already arisen, explains Fink, which are now paying off for the consultants.
Smaller consultations come under pressure
The times of astronomical growth rates are over for the time being, even in Germany. According to Bain, the number three in the world, sales in the German-speaking region increased by 15 percent in 2022 – after 40 percent in the previous year. Andreas von der Gathen, co-head of the second largest German consultancy Simon-Kucher, only expects an increase of 13 to 15 percent for the current year. The year before it was 21 percent.
>> Read also: “We are no longer a German consultancy”: The USA is becoming the most important market for Simon-Kucher
Small and medium-sized consulting firms in particular are struggling. According to the BDU, the division of the industry continues. According to the study, the largest consulting firms with an annual turnover of more than 50 million euros are growing the most. They increased by an average of almost 20 percent in 2022.
For the head of the association, Strehlau, one thing is clear: “We will see some mergers and acquisitions again in 2023.” The economies of scale, especially when it comes to the top issues of sustainability and digitization, are obvious.
More: No longer in a class of their own: the consultants