HR Consulting Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 7,000 human resources consulting services advise businesses and other organizations on personnel policies, practices, and procedures; employee benefits; compensation; and wage and salary administration. Firms may also assist with implementation activities related to human capital management. Large firms typically offer a wide range of services. Boutique HR consulting firms and independent consultants or freelancers may specialize in areas like benefits or executive recruiting.
Dependence on Economic Conditions
Demand for human resources consulting is driven by business cycles, which are affected by changes in economic conditions.
Technology Disruption
The ongoing automation of tasks performed by people continues to disrupt workforces and affects demand for human capital and HR consulting services.
Industry size & Structure
The average human resources consulting firm operates out of a single location, employs 21 workers, and generates $2-3 million annually.
- The human resources consulting industry consists of about 7,000 firms that employ over 150,000 workers and generate over $18 billion annually.
- The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for about 60% of industry revenue.
- More than 50% of firms generate less than $1 million annually. Firms that generate more than $10 million annually account for less than 3% of total firms and almost 75% of industry revenue.
- Large companies include Marsh McLennan, Willis Towers Watson, Aon, and Korn Ferry.
Industry Forecast
HR Consulting Services Industry Growth
Recent Developments
Oct 3, 2024 - A Third of Workers Expect AI-Related Job Displacements
- In a recent poll by Flexjobs, 34% of workers said they thought artificial intelligence (AI) would lead to job displacement over the next five years. Nearly half (49%) of respondents said they do not use AI, and 21% said they use AI for work-related and professional purposes. Almost 20% (19%) of those surveyed said they rely on AI to support their job searches, including writing cover letters and résumés. About a quarter of Millennials (24%) said they use AI for professional or personal purposes, followed by Gen X (21%) and baby boomers (16%). About 9% of those surveyed said they expect AI to make their current job obsolete within the next five years.
- In September, Amazon’s CEO announced that starting January 2, 2025, the company’s corporate staff would have to return to the office full time, according to The Wall Street Journal. Since the end of the pandemic, hybrid work models have persisted, often due to management concerns that top performers might leave if they were required to spend more time in the office. However, as the labor market has tightened, the balance of power has shifted to favor employers, and some are eager to use their upper hand to require five days of in-office work. However, over the last year, the number of companies requiring five days in the office has fallen by 15%, according to Flex Index, which tracks the work policies of about 6,300 firms. A recent survey of CEOs by KMPG showed that 80% expect corporate employees to return to the office five days per week within three years.
- Wage reductions that swept through the white-collar workforce in 2023 are taking hold in several blue-collar sectors, according to The Wall Street Journal. During the pandemic, when employers were starving for workers, recruits were lured by generous pay. However, the power dynamic has shifted as the labor market has softened, and many employers are offering lower wages. Among 20,000 different job titles listed on ZipRecruiter, so far in 2024, average posted pay has dropped in retail, agriculture, manufacturing, food, and transportation and warehousing. Some of the biggest declines in advertised pay offerings were in retail (down nearly 60%), agriculture (-24.5%), and manufacturing (-17.3%). Some white-collar positions are also seeing new-hire wages drop. Wages for new hires in finance have fallen 9.2% in the past year, professional services wages are off 2.4%, and insurance pay has declined 1.6%, according to payroll and benefits software firm Gusto.
- In August, a federal judge in Texas threw out a US Federal Trade Commission (FTC) rule that, in most cases, would have prevented employers from requiring employees to enter noncompete agreements, according to The Wall Street Journal. The judge ruled that the FTC’s job of regulating unfair competitive practices didn’t include a ban on an entire area of conduct. Proponents of noncompete agreements suggest they help firms protect intellectual property. The FTC argued the agreements stifle competition while reducing pay and benefits, and the agency said it is considering an appeal. The FTC rule was announced in April 2024 and was slated to go into effect on September 3, 2024.
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