Things are changing in the landscape of HR consultancies— and businesses need to adapt quickly to survive. Though the consulting industry was a $250 billion global market at the time, IBISWorld research revealed that the market growth screeched to a halt in 2020. In fact, the growth rate for the consultancy market is at 0.5 percent in the US, which is far below other industries.
This market decline is caused by a disruption in the foundations of HR consultancy businesses. Now that companies are shifting towards innovation-driven models, can your HR consulting business survive?
The Foundations of HR Consulting Businesses are Shifting
The main reason for HR consulting disruptions in the past few years has been because of changing priorities for business clients in the new normal. Our article on eCommerce businesses during the COVID-19 pandemic highlighted that industries like advertising and marketing have adjusted their operations to be able to function during lockdowns. In fact, companies even started to invest in their digitalization, since both consumers and businesses are shifting towards the online landscape.
These major changes have affected HR experts because employees have started to adopt a remote or hybrid work setup. The digitalization of businesses has also given small to medium enterprises (SMEs) a bit more leverage online. Big consultancy firms like McKinsey are focused on large-scale organizations that need large full-scale solutions. As a result, new consultancy firms like Accenture are overtaking large consulting firms by tapping into new markets, like SMEs.
Since new HR consulting firms are delivering personalized solutions for a wider client base, the traditional models of big consulting firms are taking a back seat in the industry.
3 Ways to Survive the Disruptions in the Industry
Enhance your consultation model
The disruptions serve as a wakeup call for HR consulting businesses who need to change up their business models.
To start, HR consultants need to study new working models, so that they can provide personalized solutions for organizations that have remote, hybrid, or office setups. Then, consulting firms also have to tap into various consumer bases that may need these insights and solutions. By providing relevant HR insights for new markets, surviving present disruptions becomes much easier.
Prepare for future challenges
It’s crucial for HR consulting businesses to remember that preparation is the key to survival.
While most companies will just focus on present issues, a guide to minimizing business disruptions by LHH recommends that you address the present issues while preparing for any future ones as well. You can start by creating policies regarding your operations and organizational communication so that your business can adjust to changes, like the remote work setup. You should also continue to invest in reskilling your HR consultants, so that you can provide better services to a changing market of consulting businesses.
Take advantage of innovative systems
Now that the traditional models of HR consultancy businesses are shifting, it’s time to prepare for the future by integrating new innovations into your business practices.
Innovations are now critical for business practices since a study on the ‘Characteristics of Consulting Firms Associated with the Diffusion of Big Data Analytics’ reveals that consultancies that leverage Big Data experience greater growth. Since data analytics can reveal reliable insights and support information, consultancies that take advantage of this are more likely to experience better reach, reputation, and global presence.
This isn’t the first time that HR consulting businesses will experience disruptions, and it won’t be the last. Make sure you’re safeguarding the success of your consulting business by adjusting and preparing for changes within the HR and consultancy landscape, and investing in the future.