黑洞社区

Even Brexit cannot keep a good consultant down. At least, that鈥檚 what our Top 150 Consultants 2019 league table suggests. This year鈥檚 health check of the biggest firms shows that 鈥� on the face of it 鈥� they are doing remarkably well, with turnover up by 12% and employee numbers up by 3.5%.

These figures are cheering because consultants have been operating in a Brexit fog since 2016 and yet do not seem to have lost their way. Many of the biggest firms 鈥� and the ones that are managing to grow fee income 鈥� have applied some nifty strategic thinking to target work in parts of the market that are growing. It just goes to show that so often the desire to do business can defy even the gloomiest of outlooks 鈥� and that with good leadership, companies have been able to switch focus or go after new opportunities.

• See the Top 150 Consultants 2019 table

Change is already being felt by consultants, who are experiencing the digitalisation and automation of their core professional services

But the fear is that no matter how creative and well prepared many consultants are they cannot sustain this level of performance for much longer. Confidence in construction has not been as low since the financial crash, and consultants are starting to feel the chill as more and more clients hold back on investment decisions.

Architects often bear the brunt of this, at least initially 鈥� lots of interesting ideas keep coming across their desks, work is done on the early stages but actually pushing projects through planning and on to construction stage is becoming harder. And it鈥檚 not just architects: we鈥檝e heard from a whole range of firms that offer engineering, surveying, quantity surveying and project management services and they are all concerned about what is waiting around the corner.

No, for the firms we spoke to it has not got to the stage of redundancies or wage cuts, but you have probably noticed a more cautious mood when it comes to recruitment. Your own firm may still be hiring, but the chances are managers are having to exercise more restraint than in previous years, making sure vacancies are advertised only where they are certain needs cannot be met within current resources.

The really interesting trend, however, is the longer-term shift in who is working for consultancy firms. Our analysis of the Top 150 shows that the proportion of the technical staff who are chartered has dropped from two-thirds back in 2015 to under half this year. This points to many more staff either being part-qualified or coming from non-traditional disciplines, such as software engineers or BIM specialists.

All the evidence suggests this shift away from chartered staff will only accelerate over the next few years. Change is already being felt by consultants, who are experiencing the digitalisation and automation of their core professional services, and they are increasingly looking at bringing in new data-orientated skill sets to keep up with the pace of technological change.

There is no doubt that Brexit 鈥� for all the political farce 鈥� poses a serious risk to the wider economy, but life will not stand still while politicians battle it out. The next 12 months will test consultants鈥� ability to steady their businesses through any slowdown while also forging ahead into the new digital era 鈥� how they do both will be down to individual firms, but one thing is for sure: it will not be easy.  

Back from the brink?

If it鈥檚 increasingly tough for consultants, spare a thought for contractors. Kier鈥檚 results landed last week, with a thud some would say. By anyone鈥檚 measure falling from a 拢106m pre-tax profit in 2018 to a 拢245m pre-tax loss this year is pretty staggering (see new analysis on pages 20-22). The results, described as 鈥渞easonably horrible鈥� by one analyst, surprised many in terms of the sheer scale of the losses. Exceptional items of 拢341m were to blame, with 拢172m of that allocated to the property, FM and environmental services arms it is trying to sell off.

• Kier: The beginning of the end or the end of the beginning?

Despite the eye-watering figures, there appears to be a consensus that chief executive Andrew Davies is leading Kier in the right direction. Clearly he has to address its debt problem 鈥� it has an average month-end net debt provision of 拢422m 鈥� and the plan to sell off key bits of the business is seen as wise. The question is just how quickly he can flog those businesses, and at what price.

So what will the Kier of the future be like? Davies emphasises that its core business of construction and infrastructure put in a 鈥渞esilient performance鈥� and he fully expects it to come through its restructure to be a thriving 拢4bn turnover company.

Davies wants to draw a 鈥渂ig thick line鈥� under what he refers to as legacy issues 鈥� who wouldn鈥檛 in his position? But the task ahead of him is huge, with many commentators saying he鈥檚 got a year to sort out the balance sheet. There is one crucial factor in his favour: he seems to have won over the confidence of the government and his staff. Not long ago, people were pessimistic about Kier鈥檚 prospects; now they can see a plan and are backing it 鈥� that could make all the difference.

Chlo毛 McCulloch, editor, 黑洞社区