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
Dec 4, 2024 - Workers Seeking to Change Jobs Hits 15-Year High
- As hiring has slowed, more white-collar workers want to change jobs, according to The Wall Street Journal. A November Gallup survey of 20,000 workers showed that more than half said they were watching out for or were actively seeking a new job, marking the highest level of white-collar job seeking since 2015. However, unlike the so-called Great Resignation of 2021 and 2022, when millions found new jobs with better pay, hiring and wage growth have slowed. According to Gallup, workers are increasingly dissatisfied amid smaller raises, fewer opportunities for advancement, added responsibilities, and increased office attendance requirements. While job dissatisfaction seems to have risen, fewer workers are quitting. In September 2024, about three million people quit their jobs, compared to about 2.5 million who did so the same month a year earlier.
- According to a survey released by SmartRecruiters in December, 60% of business leaders worry that they have hired the wrong person. The survey also showed that 45% of leaders spend more than half of their time on tasks related to hiring. The leading negative impacts caused by ineffective hiring were damaged brand reputation (30% of respondents), weaker sales performance (29%), slower business growth (28%), and reduced service quality (28%). About 56% of those surveyed said the recruiting process has become more complicated in recent years due to the rises in digital nomads, international employees, and remote work. SmartRecruiters’ survey included business leaders at 500 companies in North America, the UK, and Australia.
- In mid-November, a federal judge in Texas struck down a Department of Labor (DOL) rule that expanded overtime pay for US workers. In April 2024, the DOL issued final regulations that raised the salary threshold for white-collar workers to receive overtime. As a result of the DOL rule, the annual salary threshold increased to $43,888 from $35,568. The Texas court ruling now blocks a second increase raising the threshold to $58,656, which was scheduled to take effect in January 2025. Under the Fair Labor Standards Act, employers must pay overtime for working more than 40 hours per week. However, salaried workers with some executive, administrative, and professional (EAP) duties and a minimum salary are exempt from the overtime rule. The federal judge in Texas ruled that by setting the salary threshold as high as it did, the DOL created a “de facto ‘salary only’ test for the EAP exemption.” The Texas court ruling will strip overtime eligibility from an estimated 1 million workers. The Texas lawsuit was brought by a coalition of business and trade associations led by the Chamber of Commerce in Plano, Texas.
- Some legal recruiters report that President-elect Trump’s plans to trim the ranks of government workers is prompting some rank-and-file government lawyers to look for work in the private sector, according to Reuters. One recruiter speaking to Reuters said he’s seeing five times the typical post-election volume of lawyers seeking to leave government work. According to the US office of Personnel Management, there are more than 44,000 licensed attorneys who work for the federal government. Legal industry insiders suggest lower-level attorneys with narrow areas of expertise may have trouble finding new positions in the private sector.
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