The US consulting market is the largest in the world. According to a recent report by Source Global Research, the US consulting market grew nearly 8% last year to almost $55 billion. A recent Robert Half survey, meanwhile, found that 61% of CFOs plan to bring in consultants in the next 12 months, up from 48% who said the same in 2013.
The reasons CFOs in the Robert Half survey cited for potentially bringing in consultants were varied, but unsurprising. Fifty percent said risk, governance, and compliance was the reason they anticipated making the move, up from 40% in 2013. Another 49% believed finance optimization would be the cause, up from 36%, and taxation was up to 45% from 42%. Essentially, they are needed for areas evolving so rapidly that it is too expensive and time consuming to train staff to keep up to date.
Consultants are often a valuable resource to draw on in urgent situations, yet occasionally they are an expensive disaster. A typical consulting partner’s day rate ranges from $3,000 to $6,000, according to Source Global Research, and the wrong one can waste both funds and time. Given CFOs’ increased reliance on consultants, it is more important than ever that CFOs ensure they are bringing in the right person for the job - especially for startups, for whom hiring in a permanent CFO is often unaffordable leading them to consultants, but any missteps can be fatal.
The most important thing is to hire a consultant with experience in your industry. There has been a recent trend emerge for young people graduating to move straight into consultancy, which, as Virgin CEO Richard Branson put it, ’is unparalleled in most professions. Imagine boarding an airliner and learning that the pilot at the controls has only ever flown a flight simulator. You’d be more than uneasy! Similarly, there is a reason that aspiring heart surgeons spend years in operating rooms assisting and observing other surgeons before they operate on their own.’
There is a wealth of experience out there, however, with many CFOs moving into consultancy as they approach retirement. In the Robert Half survey, three quarters of CFOs said they see consulting as an attractive proposition in the twilight of their career, while 58% said they thought it at least somewhat attractive and 17% said they find it very attractive. Paul McDonald, a Robert Half senior executive director, noted in a press release that, ‘Financial professionals who are ready for a change but don’t want to retire often choose consulting as their next career step. Project work provides intellectual challenge, the opportunity to take on new types of assignments and the ability to mentor others.’
These are the people you want to be looking for, people with experience who understand the challenges are not afraid to say it as they see it. The consultant is often much maligned, particularly in the public sector, but they are a valuable resource. In fast-moving times, it is often impossible to keep up with developments, but a consultant can bring that necessary expertise in urgent times. It’s just a question of picking the right one.