Consulting

Knowledge is power, as the saying goes. And in the age of information, any businesses, nonprofits, government agencies, or other organizations that do not have as much knowledge as possible of their individual lines of work are at a distinct disadvantage. They risk suffering financial losses, poorly performing workers and departments, and failing to meet their goals. Consultants are professionals who provide expertise to organizations to help them maximize their profitability or effectiveness and keep them running smoothly. Basically they are “problem-solvers for hire.”

The roots of modern consulting began in the late 19th and early 20th centuries, when the first consulting businesses established in the United States studied manufacturing in an attempt to improve workplace productivity. Many companies began hiring consulting firms to help improve worker and production efficiency. Since then, the need for services has grown with the population and the expansion of business on an international scale, while the types of services provided have evolved with the economy.

There are four major types of consulting:

  1. Management/strategy consulting firms help to improve an organization’s structure, management, efficiency, and profits, and plan strategies for short- and long-term development. According to the Institute of Management Consultants USA, common management consulting specialties include administration, financial planning and control, human resources management and labor relations, incentive compensation, information technology, manufacturing, organizational planning and development, physical distribution, research and development, sales and marketing, strategic and business planning, and wage and salary administration.   
  2. Financial consulting firms provide advice on financial issues such as capital budgeting, project valuation, financial information integrity, profit-and-loss reporting, risk management and insurance engagements, global finance operations, ongoing financial control and compliance with laws, tax and treasury optimization, and corporate restructuring.
  3. Information technology (IT) consulting firms help clients design and implement IT systems or develop better IT practices; train staff members in IT areas such as hardware/software design setup, network setup and administration, computer security, and search engine marketing; or provide strategic advice on social media and IT issues.
  4. Human resources/staffing consulting firms help clients make the most of their investments in people (salaried, temporary, and contract workers). These firms manage compensation and benefits programs; advise firms on personnel policies; analyze staffing needs; recruit, hire, and train workers; provide advice on diversity issues; and develop leadership training programs.

Although there are many overlapping areas in the consulting industry, some firms specialize in one area while others have departments for a variety of fields. Additionally, some consulting firms offer expertise in a single industry, such as defense, insurance, retail, health care, education, environment, telecommunications, engineering, or publishing. Consultants who work for the government often specialize by type of agency (environmental, defense, criminal justice, etc.).

Consulting providers can be large firms (such as McKinsey & Company, Accenture, Mercer, and the Boston Consulting Group) that maintain offices throughout the world, small- to medium-sized businesses with local or regional presences, or firms operated by only a few people or even a single consultant.

Many people aspire to become consultants. The career often makes “best job” lists by industry publications. In 2016, CNNMoney included five consulting specialties (information technology security, technical, implantation, healthcare, and marketing consulting) among its list of the 100 best jobs for fast growth, noting that they also offer good personal satisfaction and job flexibility. In 2015, management analysts and consultants earned an average of $81,320, according to the U.S. Department of Labor, much higher than the national mean ($48,320) for all careers. Consultants at global consulting firms can earn $200,000 to $500,000 annually.

Consultants, analysts, and consulting managers are the key professionals in the consulting industry. Thirty percent of people in the management, scientific, and technical consulting sector work in business and financial-operations occupations (a U.S. Department of Labor category that includes consultants). Office and administrative support positions make up the next-largest employment group (22 percent of workers), followed by those in management occupations (11 percent), a category that includes consulting managers and top executives. There are also career paths in business development, administrative services and executive support, information technology support (non-consulting), sales and marketing, communications/public relations, human resources (non-consulting), continuing education, and other areas.

A bachelor’s degree is the minimum requirement for most consulting careers, but many consultants have a master’s degree in business administration. Others have advanced degrees in their specialty, such as engineering, human resources, or accounting. Attending an Ivy League school or a college with a top-rated MBA program increases your chances of landing a consulting job. A good education is only the first step for aspiring consultants. They need extensive field experience (at least six years at major consulting firms) before being assigned top-level work. Some consulting positions also require a graduate-level or professional degree.

Today, consulting is a massive, international industry with global revenues of $470 billion in 2016, according to Plunkett Research, Ltd., up from $415 billion in 2013. This figure includes human resources, business advisory services, information technology, and operations management consulting, but not tax- and other accounting-related consulting. There were about 739,000 management consulting firms in the United States in 2016, according to IBISWorld, with combined annual revenue of approximately $253 billion. Consultants are key players in the business world, and their star will only rise in the future.

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