New report finds HR consulting to be biggest recession casualty

The report, based on responses from 20 major buyers of HR consulting surveyed between September and October 2009, also found that there has been a substantial shift in the type of services being bought, away from traditional services, such as organisational design and change management, to those that offer a measurable return on investment.

Sue Grist, co-founder and director of Egremont, a business transformation consultancy, who was among those interviewed for the report said: “There’s been a shift to using consultants to help save money. When we sell work now, the impact we’ll have on business processes and costs is front of mind.”

The survey divides HR consulting services into three groups:

* Recession-specific services, such as outplacement and advice on outsourcing the HR function, which have grown during the recession but have limited shelf-life beyond it.

* “Past their peak” services, such as organisational design and capability assessment, which form the bedrock of much HR consulting but demand for which is likely to shrink.

* Potential for growth, services that focus on performance management and personal productivity, as organisations look to get more from their employees and their consultants.

Economic recovery is unlikely to reverse these trends, believes Fiona Czerniawska, joint managing director of sourceforconsulting.com and author of the report. She comments: “Our research points to a ‘generational’ shift in HR consulting, away from traditional areas to focusing more on performance management.

The future of HR consulting will see traditional firms collaborating, even merging, with smaller, more innovative specialists, in order to survive. The merger of Towers Perrin and Watson Wyatt announced in June, and the recent acquisition by PwC of performance management consulting firm, Paragon, is evidence of this evolving trend.”