Download - Consulting & HR Consulting Industry
DATE OF PRESENTATION23-11-2010
Seminar On
“Consulting Services”PRESENTED BY
Prithwish S KotianRanjani S KSachin T S
Sandeepa N Santhosh M B
I SEM MBA(2010-11)
UNDER THE GUIDANCE OFMr. Rakesh D’souza
LECTURER
PG DEPT. OF MANAGEMENT STUDIESPESITM
Sagar Road, NH 206 SHIVAMOGGA – 577104
(KARNATAKA)
Contents1. Introduction to Consulting Industry
2. History & Future
3. Types of Consulting
4. HR Consulting
5. Trends, Profiles & Forecasts
6. Global Scenario
7. Current HR Services & Recruitment Scenario in India
8. International Recruiting by India
9. Performance of HR Consulting
10.Models of Consultation
11.Major Players
12.65 Consulting Jobs
13.SWOT Analysis
14.Conclusion
Introduction
Consulting is providing advice in a particular area of expertise. This is not the same as customer service.
Consultant
A consultant (from the Latin consultare means "to discuss" from which we also derive words such as consul and counsel) is a professional who provides professional or expert advice in a particular area of expertise. The consultants provide expert advices
in most of the fields such as management, accountancy, the environment, entertainment, technology, law (tax law, in particular), human
resources, marketing, emergency management, food production, medicine, finance, life management, economics, public affairs,
communication, engineering, sound system design, graphic design, or waste management.
Introduction of the IndustryGlobal consulting industry revenues (including HR, IT, strategy, operations management and business advisory services) will be
about $345 billion in 2010, according to Plunkett Research estimates. This represents a rebound from about $310 billion in
2009 and $330 billion in 2008. In the U.S., accounting and related services (such as tax preparation), generated an
additional $119.7 billion in 2009, down from $128.4 billion in 2008, according to the U.S. Bureau of the Census.
The consulting industry started in the late 19th century.In the mid 20th century, the world war II & post war economic environment, created demand for consultants.Tech boom in 1990s led to huge demand for IT Consulting.All the consulting business has grown rapidly since 2000.Consultancies posted significant growth from 2005 through 2007.In 2008-2009 it marked a challenging period, in light of the global economic slowdown and shrinking corporate budgets.In 2009, many consulting firms found themselves with a substantial drops in the business.However, in the year 2010, the performance of the industry is focused good with an estimated revenue of about $345 billion.
History of Consulting
Consulting is present since the human beings started giving advice. But, when people started giving advices for remuneration, they started considering it as
service business. The evolution of the consulting services have shown significant change in providing services. Today the consulting services is treated as a separate industry. The consulting services have been separated by their service fields. the
most consulted services are Management, HR, Strategic, IT, Marketing etc.
The history of consulting is very similar to the evolution of legal, accounting, and other professional service firms. Each of these industries is primarily reactive to client demand.
Arthur D. Little was an MIT professor and is generally considered the first management consultant to create an entity that employed other consultants in the U.S. (1890).
In 1926, McKinsey & Company was launched to serve general management clients. McKinsey was a new type of consulting firm focused on business strategy, while also providing subject matter experts for technical issues.
The emerging economy of World War II and the post-war economic environment created new demands for consultants. As the U.S. economy grew, companies such as the Boston Consulting Group (1963) created new ways of examining industry, products, and process measures.
Future of Consulting
In consulting, we can point out that our future will require creativity just as in our past. The role of innovation for consulting firms will continue to increase, not only in how we add value for our clients, but also in how we structure our practices to implement such innovative strategies.
Today, consultants should continue to align their firms with others that provide complimentary services and have the same organizational values and ethics, while maintaining their flexibility to respond to the general economic conditions. Innovative is the key to Consultants prosperity.
ConsultantsA consultant (from the Latin Consultare means "to discuss" from which we also
derive words such as consul and counsel) is a professional who provides professional or expert advice in a particular area of expertise.
Some consultants are employed by a consult staffing company, a company that provides consultants to clients. This is particularly common in the technology sector. Consultants are often called contractors in the technology sector in reference to their
employment contract.
Strategy consultants are common in upper management in many industries. There are also independent consultants who act as interim executives with decision-making power under corporate policies or statutes. They may sit on specially
constituted boards or committees.
THE RAPID EVOLUTION OF THE CONSULTING INDUSTRY Advisors have existed since the beginning of time--often providing advice based on subjective opinions absent of any structure, facts,
expertise or relevant experience. Unfortunately there continue to be many people who are quite capable of expressing an opinion on
something for which they know nothing about.But in the later phase,
More legitimately, academics, government leaders, and senior business executives have also been consulted for generations drawing upon the expertise and personal experience that they have amassed
throughout their long careers. However, it was not until the late 1800s when the rational, logically
structured problem solving approaches began to be formally applied to management challenges.
Arthur D. Little founded his consulting engineer business in 1886 giving management approachFrederick W. Taylor established his consulting practice in 1893.Edwin Booz established his firm in 1914.McKinsey established his firm in 1926.John PA Consulting, founded in the UK in 1943
These early firms Arthur D. Little, Booz & Company, and McKinsey & Company remain with us today.
Consulting Industry Overview
Global Consulting Industry Revenues: US$ 330.7 Bil. 2008 Information Technology Consulting: US$ 152.8 Bil. 2008 Business Advisory Services: US$ 86.5 Bil. 2008 Operations Management Consulting: US$ 48.7 Bil. 2008 Strategy Consulting: US$ 27.6 Bil. 2008 Human Resources Consulting: US$ 15.1 Bil. 2008
Trends in 2010-2012 and the impacts on the Consulting Industry
Increasing investment and expenditures of Governments worldwide Decrease of fixed salaried people in most of the client industries Decrease of peoples consumption expenditures in western industrial nations
Types of Consulting
1. Management Consulting
2. Strategy Consulting
3. IT Consulting
4. Corporate Finance & Financial Advisory
5. Consultant Engineers
6. Marketing Consulting
7. Consulting in Politics and the Public Sector
8. Real Estate Consulting
9. Human Resources Consulting
Management Consulting:
Management consultants are business consultants that specialized in providing companies and start-ups with expertise in setup and development, operations, finance, economics, market analysis, marketing, and branding. They usually have a background in business administration, business finance, and personnel management.
Strategy Consulting
Strategy consulting is one of the core components of management consulting services. In small- to mid-size scenarios, the strategy consultant and the management consultant will often be one in the same. In large business scenarios, the management consultation team will often include a specialized strategy consultant.
The strategy consultant's job is to find solutions to problems for which there is no textbook answer. The strategy consultant specializes in being an innovator, which is a highly sought after skill set in today's complex business environments.
IT Consulting
Information technology (IT) consulting is a relatively young field that focuses on providing businesses with the tools necessary to best leverage information technology. In addition to providing experience and advice, an IT consultant will often implement, deploy, and administer IT systems on behalf of the company.
Corporate Finance
Corporate Finance Consulting supports start-ups, small businesses and public traded companies to achieve the perfect financing structure with the right mixture of debt and equity.
In the task of financial questions financial advice is almost indispensable. Financial Consulting assists to make the right decisions.
Consulting Engineering
Consulting Engineers are offering value creating knowledge in various industries. Main areas are production as well as the construction sector. These industries account for a major stake of the economy. According to the National Institute of Economic and Social Research, it is for about 30% in the UK.
Marketing Consulting
Marketing Consulting assists firms to sell their products and services. Marketing Consultants have a deep knowledge and a solid experience in how to plan the optimal marketing mix.
A well developed marketing strategy is the key to, succeed against competitors. The right marketing program quantifiably leverages new product success rates, customer satisfaction and retention, brand and customer equity.
Politics and Public Sector Consulting
Consulting in Politics and the Public sector became an important market for Consulting services in the recent years. In order to transform public services approximately £20bn were spend for consulting services in
the years between 1997 and 2006 according to timesonline.co.uk.
Real Estate Consulting
Real Estate Consulting offers a wide range of services. Real Estate Consultants assist acquiring and selling property. They also help to develop Real Estate construction projects e.g. with specialized tenancy solutions. Optimal management policies for corporate real estate are also provided.
HR Consulting
HR consulting or Human Resources consulting is one of the primary components of management consulting but it has branched out into its own specialization due to the needs of businesses becoming more complex and specialized. The core fields around which most HR firms base their consulting methodologies are human capital, health and benefits, merger and acquisitions, communication, retirement, and outsourcing. Some business will use a firm to provide all of their HR services while others will use them as needed.
Human capital is one of the four types of fixed capital
Human resource consulting is a $18.4 billion industry that has emerged from management consulting, as clients' needs have become more complex and specialized, widening the gap between HR needs and work force capabilities, and thus accentuating the ability of HR management consulting firms to fill this gap.
But, there is a great deal of overlap between in the services provided by firms specializing in HR consulting, IT consulting, and management consulting.
HR Consulting Marketplace: Key Trends, Profiles and Forecasts
HR Consulting Marketplace is Kennedy’s quintessential, annual research that examines the overall HR consulting segment and its three service segments: Benefits consulting, HR Technology consulting, and Talent Management consulting. It gives in depth analysis of the trends driving demand for HR consulting, changes to client spending and engagement patterns.
HR Consulting Service Segment:
Benefits Consulting: Retirement and actuarial consulting with respect to defined benefit, hybrid, and defined contribution plans as well as health and welfare or healthcare consulting on healthcare coverage
HR Technology Consulting: Advisory on the structure and management of the HR function and the design of service delivery in an effective and cost efficient manner.
HRO and Software Advisory: Consulting on the selection of ERP systems providers and best-of-breed software providers as well as on HR business intelligence and analytics software
Talent Management Consulting: Advisory on the overall people strategy and the use of management of human capital assets to reach an organization’s business objectives.
New Key Trend:
Many human resources consulting firms have developed proprietary software and support tools. These can assist companies on a long-term basis with managing their human resource functions. Companies should educate themselves on what types of tools are available, and how those tools can enhance their human resource operations.
Traditional strategy & HR consulting providers face threats
At a time when the majority of companies are under increasing pressure to reduce costs due to the weakened economy, HR departments expect to maintain their current strategies toward outsourcing HR services, according to Hewitt's HR Outsourcing Trends and Insights 2009 survey.
Hewitt recently surveyed 104 companies on how they are using outsourcing to improve the delivery of their benefit and HR programs From the survey results, it's clear that outsourcing does play an integral role in HR's ability to deliver programs to employees.82 percent of companies that have measured their outsourcing programs said they realized the benefits they had hoped to gain by outsourcing.
There are number of reasons why choose to outsource HR services, including:Reducing costs: Sixty-five percent of organizations that indicate cost savings is a primary outsourcing objective.Gaining access to outside expertise: Most of the company use outsourcing for the outside expertise.Improving service quality: 81 percent of respondents indicated that they met or exceeded their service quality targets.Focusing on strategic HR priorities: : Outsourcing helps to remove the day-to-day administration of managing HR programs so HR can focus on supporting on their most important business challenges.
Global Scenario
Human resource consulting is about a $18.4 billion industry that has emerged from management consulting, as clients' needs have become more complex and specialized, widening the gap between HR needs and work force capabilities, and thus accentuating the ability of HR management consulting firms to fill this gap. Rebounding from a decline in previous 2003-2004, the HR consulting industry saw growth of 6.1 percent in 2005 and maintained a steady growth rate of 9.1 percent in 2006, resulting in an $18.4 billion market, according to a recent study conducted by Kennedy Information. But in 2008 it has declined to $15.1 billion. Furthermore, the study forecasts that the global HR consulting industry will experience an 8.3 percent compound annual growth rate from 2006 to 2010. Legal and regulatory changes regarding retirement benefits, such as the enactment of the Pension Protection Act in 2006, are identified as being the lead drivers within the U.S. market. Other factors contributing to demand include increasing need for executive talent management strategies and the implementation of HR technology as well as trends in business process outsourcing, including HR outsourcing.
There are about 950 firms globally that provide HR-related consulting services in such areas as recruitment, compensation, retention and benefits.
A study identified the top five revenue producing HR consultancies as Mercer ($2.4 billion), Deloitte ($1.6 billion), Watson Wyatt ($1.4 billion), Aon ($1.3 billion), PricewaterhouseCoopers ($1.1 billion) Other major players include Towers Watson, Hewitt Associates, Hay Group and Buck Consultants, etc.
Current HR Services & Recruitment Scenario in India
Services:Actuarial: Control pension benefitsRetirement: Maximize your return with a comprehensive retirement strategyCompensation: Giving best solution in compensation strategyTalent and Performance: Maintaining talent management & performance recordsGovernment: Providing HR services to the Govt.Global Risk: Solution to face the Global riskHR Outsourcing: Providing outsourcing services to help the organization to concentrate on business objectives.
Recruitment:Recession is just a momentary situation not a long term affair. Last year saw the
worse of economy all over the world. Lay offs, price-cutting, losing projects and many more. India, the country which renders service to almost all great nations in the world was affected too. Big IT giants and banks losing money started showing pink slips to its even experienced employees. We saw the present and foresee the future even worse.
The best Manpower consultants in India who have thrived worked overtime to provide the corporate and industries with the best of the man power at a prices that could keep them profitable in recession. They have lowered their consultation charges, changed the interviewing process and brought in many other innovative concepts to make it work and they have succeeded to an appreciable extent.
Many of the job consultants have placed potential candidates in the marketing and sales sector which promises an ever growing career prospect even at this time. The pharmaceutical and medical sector too provides great career prospects ahead. With more discoveries of drugs, medical technologies, clinical research is booming in India. Potential candidates from various fields of science are hired for specific purposes.
Recruiting Manpower Globally by Indian Manpower Recruiters:
India is one of the developing countries economically and a talent-rich country. Today India has emerged as a hotbed in offering vibrant young talented professionals to overseas companies across the globe from various fields. India is one of the major recruitment market in the World for developed countries.
Indian manpower recruiters are recruiting no’s of Indian professionals across the globe. Thousands of overseas work permit visa are issued to Indian professionals every year. Applicants who apply overseas work permit visa are still increasing every year.
Top recruiters will aim and focus on how to project and place a good candidate to employers who desperately need to fill the positions. This extended relationship shows that the recruiter have given the quality series to the client.
What Do Human Resource Consultants Do Today?Human resource consultants typically have many duties. Generally, human
resource consultants are outside experts who provide direction to the personnel or human resources (HR) department of an organization.Some human resource consultants are hired to handle: •Recruitment and staffing•Conduct performance appraisals•Determine compensation and benefits for employees•Employee training and development•Ensure employee safety and health•Assume responsibility for human resource research.
A company that is facing high costs and the need to lay-off employees may also hire a human resource consultant to provide help. Human resource consultants may also assist with setting the guidelines for fair and equitable, legal and ethical payment of employees.
What Is Human Resources Outsourcing?
Human resources outsourcing is a service that companies can opt to pay for instead of hiring a full-time person, or multiple full-time positions, for the same purposes. For companies that do not need a full-time person for certain aspects of human resources, there may be a cost savings when compared to employing additional people. All or part of the human resources function can be outsourced, including financial matters, benefits, and even recruitment and hiring.
Performance of the HR Consulting Industry
Company HR Consulting
Revenue(present)
HR Consulting
Revenue(previous)
No. of HR Consulting
Clients Cos.
No. of full time HR
Consultants
1. Mercer HR
Consulting
$2.4 billion $2.2 billion Not available 9000
2. Deloitte Consulting $1.587 billion $1.483 billion NA 8091
3. Watson Wyatt
Worldwide
$1.39 billion $968 million NA 6300
4. Aon Consulting $1.28 billion $1.25 million NA 6500
5. Price Water House
Coopers
$1.1 billion $980 million 17000 5350
6. Towers Perrin $1.027 billion $930 million NA 2069
7. Hewitt Associates $861.8 million $813.7 million 2300 NA
8. Hay Group $389 million $340 million 7000 1660
9. Segal Co. $180.2 million $180.2 million 2600 662
There are more than1000 firms globally that provide HR-related consulting services in such areas as recruitment, compensation, retention and benefits.
Models of ConsultationThere have been a number of helpful models of the consultation which have been
produced over the last 30 years. Some are task-orientated, process or outcome-based; some are skills-based, some incorporate a temporal framework, and some are based on the doctor-patient relationship, or the patient’s perspective of illness. Many incorporate more than one of the above.Generic Model
Client-Centered Case ConsultationConsul tee-centered case consultationConsul tee centered administrative consultationBehavioral Consultation Model/Behavioral-operant ModelOrganization Consultation
Major Players in HR Consulting in Globe
Mercer ($2.4 billion)Deloitte ($1.6 billion)Watson Wyatt ($1.4 billion),Aon ($1.3 billion)PricewaterhouseCoopers ($1.1 billion)
Other major players include:Towers Watson, Hewitt Associates, Hay Group and Buck Consultants
Founded: 1975Headquarters: New York City, New York150 offices in 42 countriesProducts: Human resource consulting services, including retirement, health & benefits, human capital, surveys & products, communication, investments, outsourcing, and mergers & acquisitionswww.mercer.com
Watson Wyatt Worldwide
Founded: 2005Headquarters: Arlington, Virginia, United StatesNumber of locations 106 officesKey people John J. Haley – President, CEO, and Chairman of the Board Revenue1.68 billionWatsonWyatt.com
Deloitte
Founded: 1845Deloitte Touche Tohmatsu Limited (also branded as Deloitte)
Aon Corporation
Founded: 1919Founder(s) W. Clement StoneHeadquarters: Aon Center Chicago LoopProducts: Insurance, Risk management,Human resource consulting RevenueWebsite: AON.com
PwC
Founded: 1849Headquarters: London, United KingdomProducts: Assurance, Tax Advisory, Consulting, Financial Advisory, Actuarial, Legal Revenue, HR.Website: pwc.com
Towers Watson
Founded: 2010Headquarters: New YorkWebsite: TowersWatson.com
Hewitt Associates
Founded: 1940Headquarters: Lincolnshire, IL$3.2 billion in fiscal 2008Website: www.hewitt.com
Hay Group
Founded: 1943Headquarters: Philadelphia, United StatesProducts Management consulting servicesWebsite www.haygroup.com
Buck Consultants
Founded: 1916Headquarters: New YorkGlobal HR Technology and AdministrationHealth and ProductivityHuman Capital ManagementRetirement EmployeesWebsite: www.buckconsultants.com
Sterling Global HR Consulting
Founded: 1982Headquarters: United StatesSterling was established in the United States in 1982. Sterling has opened its branches in many different places like Beijing, Singapore, Shanghai, Japan, India, Seoul & United Kingdom etc. www.sterlinghrconsulting.com
Major Players of HR Consulting in India
ABC Consultants Private Limited
Founded in 1969 by Dr B P Agrawal, ABC Consultants is the pioneer of organized recruitment services in India. The best recognized recruitment brand nationally.
Advanced Consultancy Services
The Organization Advanced Consultancy Services is among the leading Overseas Recruitment Consultant and Manpower supplying agency with an excellent track record and recognized by the Government of India.
Datamatics Staffing Services Pvt Ltd
Datamatics Staffing Services Pvt Ltd (DSS) has been in recruitment since 1969 and is one of the oldest professionally-run recruitment consulting firms in India. DSS is a part of the 65 Million US$ Datamatics Group founded by Dr L S Kanodia.
Ma Foi Randstad
Ma Foi Randstad is a part of Randstad
Major Players of HR Consulting in Bengaluru
9to6 Consultants
9 to 6 Consulting is among the few HR consulting firms that have grown rapidly over the past few years, to become one of the fastest growing HR consulting firm in the country.
Aaren system
Aaren systems is specialized in providing the following services
• HR-Consulting Services (Specialized in Reference checks in pre- employment and post employment and Qualification check) • Contract Staffing • Permanent Staffing • Contract-to-hire
Axis Consultants
Axis Consultants
Axis Consultants is a major indigenous Manpower company and Placement Agency organized to provide manpower technical and non technical consultancy services to the ITES and IT Industry in Hardware, Software & Telecommunications.
HR Consultant in Shivamogga
Udhyoginfo.com
Founded: 2010With a Vision & MissionTo be the leading HR consultants within and beyond our geographical boundaries.
Based in Shivamogga (Karnataka)
Employment Website in India
Monster.com
Monster Worldwide, Inc. Monster
Created in 1999
Naukri.com
Nau. kri.com is a job site operating in India founded by Mr. Sanjeev Bikhchandani in March 1997
JobsAhead.com
CoolAvenues.com
CoolAvenues.com is an MBA community focused website in India which caters to MBA Aspirants, B-School Students and MBA alumni.
JobStreet.com is a job portal founded in 1997. Founded in Malaysia, it has expanded its operations and services to countries like Singapore, Philippines, India, Bangladesh, Japan and Thailand.
HR consulting industry has shrunk by fifth in recession
The HR consulting industry has shrunk by 20 per cent in the past year as demand suffers in the recession, researchers have claimed. The report by specialists’ source for consulting.com, which included a survey of the largest buyers of consultancy services, concluded that there is still significant demand for HR consulting but it was increasingly focused on elements that offer a measurable financial return.
65 Consulting Jobs
Consulting is an extremely broad term. There are many types of consulting work, or consulting fields, ranging from business to personal services. Here is a list of 65 examples of fields where consultants may choose to work.
1. Accounting 2. Advertising 3. Architecture / Building Safety 4. Beauty 5. Business Analysis 6. Business Change / Reform 7. Business Networking 8. Career Advice 9. Childbirth 10.City Planning 11.Clothing / Fashion 12.College Admissions 13.College Planning 14.Computer Training 15.Crisis Management 16.Diet & Nutrition 17.Diversity in the Workplace 18.E-commerce
19.Editorial 20.Energy 21.Entrepreneurship / Small
Business Start-up 22.Environment 23.Fitness24.Home Improvement 25.Human Resources (HR) 26.Imports / Exports 27.Information Technology (IT) 28.Insurance 29.Intercultural Communications 30.Interior Decorating 31.Investments 32. Leadership33. Legal
34. Management
35. Market Research
36. Marketing
37. Marriage Relations
38. Media Relations
39. Medical / Health
40. Mental Health
41. Organization
42. Parenting
43. Personal Finance
44. Public Relations (PR)
45. Public Speaking
46. Publicity
47. Real Estate
48. Retirement Planning
49. Sales
50. Search Engine Optimization (SEO)
51. Social Policies
52. Software Training
53. Strategy Formulation
54. Stress Relief
55. Taxes
56. Team Building
57. Telecommunications
58. Time Management
59. Tourism
60. Travel Planning
61. Venture Capital
62. Web Site Management
63. Wedding / Bridal
64. Weight Loss
65. Wills & Estate Planning
SWOT Analysis
Strengths:
•The Expertise knowledge of the consultants in the respective field is the strength of the industry. Every person will be knowledgeable in his own way.
•Specialized approach in every field has lead to increase in the demand for the consultants in which they are specialized.
•The long presence of consulting activity in the world has created a trust in the minds of the people who ask for an advice.
•Ability to provide solutions to face the Recession.
Weaknesses:
•Wrong person choosing a wrong field to start consulting services. There are few, who choose wrong field as their career. This makes the consulting services as weaker, loosing the hopes of the clients.
•Dependent on the economic situations. Mainly the IT, Management, HR, Engineering, Marketing and Real Estate Consulting depend upon the economic conditions/situations.
Opportunities:
•At present time, the recovery stage of the global economy creates an immense opportunities to the consulting services. The services like Management, HR, IT, Tax & Law, Marketing, engineering, etc will get a boost now.
•For HR Consulting, especially in countries like India & China, where the population is high, the opportunities are vast to meet its clients requirement at low cost.
•The globalization gives further opportunities to the consulting services by formation of huge number of companies.
•Lack of knowledge of the people will be an opportunity for the consultant to provide his service.
Threats:
•Global competition has become a threat for the domestic players. As globalization increases the opportunities, the global players threat the domestic and local players.
•Recession is another threat for the consulting industry. When it comes to HR Consulting, the recession has shrunk the industry by 20% in the past year.
Conclusion:The consulting services have been given a new thought over decades. Evolution of the industry has shown the future prospect of the industry. The whole consulting services industry is valued nearly $300- $345 billions. In this the HR Consulting services valued as $18.4 billion. Many consulting firm have entered the industry. But survival of the firm will purely depend upon the degree of services they provide and the innovative approach they give. Every consulting has its own approach in its services. HR consulting has introduced variety of services other than Recruiting like Human Resource Outsourcing, Compliance, Human Resource Technology, Consultation Models etc. Globalization has given a immense opportunities to the consulting industry to give its best services to all over the world. All the major players are performing well in the industry by giving best of their services to their clients. The industry has shrunk by the global recession occurred in the past year. But, it has shown its capability of surviving in the recession period.
ThankYou
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