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 20 workers, and generates $2-3 million annually.

    • The human resources consulting industry consists of about 7,000 firms that employ over 120,000 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
                        Source: Vertical IQ and Inforum

                        Recent Developments

                        Apr 29, 2024 - Moderate Industry Sales Growth
                        • The HR consulting industry’s sales are expected to notch more moderate growth over the next several years. The industry’s year-over-year sales rose 15% in 2022 before moderating to 8% growth in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales are projected to rise a modest 3.1% in 2024 and 5.1% in 2025, then see average annual growth of about 5.5% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
                        • In April, the US Federal Trade Commission (FTC) issued a rule that, in most cases, would prevent employers from requiring employees to enter noncompete agreements, according to The New York Times. Supporters of the ruling say it will free workers to pursue better wages, increase business competition, and create new jobs. Critics, including the US Chamber of Commerce, argue that the FTC has no authority to issue a ruling on noncompete arrangements and that the issue should be addressed at the state level. The FTC rulemaking will become law 120 days after it is entered into the Federal Register, but its implementation could be slowed or blocked by lawsuits. Noncompete contracts are most prevalent in the professional services and finance industries, impacting about 20% of the workforce, according to a report by the Federal Reserve. The FTC estimates about 30 million workers are impacted by noncompetes. The new rule doesn’t affect executives, which the FTC defines as workers in “policy-making positions” who earn at least $151,164 per year.
                        • A new type of HR consulting is emerging that specializes in advocating for employees who don’t feel comfortable with or don’t trust their employer’s HR department, according to The Guardian. In a March report by Secure Data Recovery, more than one-third of workers surveyed said they don’t trust their company’s HR department. Independent HR specialists help employees navigate issues they may be having at work, including discrimination, salary negotiations, or harassment. However, such services typically don’t interact directly with a client’s employer. Instead, HR employee advocates inform workers of their rights, make legal referrals, and draft resignation letters or discrimination reports.
                        • Amid an overall cooling of the tech jobs market, hiring for roles related to artificial intelligence (AI) is proving resilient, according to The Wall Street Journal. In January 2024, AI job listings were up 42% compared to December 2022; overall, IT job listings declined 31% over the same period, according to an AI job tracking tool developed by researchers at the University of Maryland. The tracker defines AI jobs as requiring skills in AI models or algorithms. After overhiring during the pandemic, some tech firms are reallocating resources to emphasize AI and are paying higher salaries to lock in top talent. According to listed pay ranges for openings on job site ZipRecruiter, AI-related jobs can command tens of thousands of dollars more than tech jobs in other fields.
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