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
Jun 28, 2024 - Small Businesses Keep Labor Market Strong
- While the Federal Reserve’s inflation-fighting interest rate hikes have helped to cool the US job market, the drop in job openings hasn’t been even across all employers, according to The Wall Street Journal. Small businesses’ appetite for workers largely fuels the robust labor market. In April, companies with fewer than 50 employees had about 50% more job openings than they averaged in 2019 before the pandemic. Over the same period, large firms posted about 14% fewer new jobs. The steady demand for workers among small firms surprises some labor economy watchers as small businesses, which are dependent on bank loans for start-up and operating capital, are extremely sensitive to higher interest rates. Some experts suggest that solid consumer demand may be enough to help small businesses offset their higher borrowing costs, allowing them to keep hiring.
- In late June, a federal judge in Texas temporarily blocked a new Labor Department (DOL) final rule that would have raised the threshold for the minimum salary for overtime pay, according to Reuters. The new rule, which was set to go into effect on July 1, 2024, aimed to raise the minimum salary for exemption to overtime pay from $35,568 to $43,888, according to HR Dive. The judge’s ruling prevents the overtime rule from applying to state workers in Texas pending the outcome of a lawsuit filed by the Attorney General of Texas challenging the rule. The Texas judge ruled the new regulation violates federal law by basing overtime exemptions on salary rather than job duties. Should the new DOL ruling prevail in court, about 4 million workers would become eligible for mandatory overtime pay.
- More C-suite leaders are becoming sensitive to the notion of “human sustainability,” – which helps companies bring more value to the lives of their team members, according to a June report by Deloitte and Workplace Intelligence. About 80% of organization leaders surveyed said they felt more pressure from workers, customers, boards of directors, and investors to put more emphasis on human sustainability. However, there is a gap between management and labor in human sustainability perceptions. More than 80% of executives feel their organization has advanced efforts toward human sustainability, but only 56% of employees feel the same way. Strategies for improving human sustainability include offering benefits that enhance team members’ well-being and addressing burnout by increasing flexibility and reducing workloads.
- While generative AI (GenAI) is expected to eliminate some jobs and change others, it is creating robust demand for a new role – prompt engineer, according to the Society of Human Resource Management (SHRM). This emerging job description creates queries – or prompts – for GenAI tools to perform tasks such as writing emails, designing product prototypes, or creating images for logos or promotional materials. While the field is new, the demand for applicants with the right skills is robust. Over the last year, employer demand for the “prompt engineer” job title has risen fivefold, according to labor market analytics firm Lightcast. Prompt engineers are not only in high demand in tech-heavy roles such as data scientist and software engineer. The skill is also highly valuable for other positions, including product managers, technical writers, and business analysts.
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