Survey Question: What percentage of your full organization is working remotely today (Q1 2021)?
50 percent responded with 81–100 percent remote.
25 percent responded with 41–60 percent remote.
25 percent responded with 61–80 percent remote.
CxO Survey Question: What percentage of your full organization will work remotely post-Covid-19 (assume 2022 forward)?
20 percent responded with 0–20 percent remote.
60 percent responded with 41–60 percent remote.
20 percent responded with 61–80 percent remote.
Impacts on Consultants and Organizations Sourcing Strategy
As indicated previously, some sectors did quite well during the pandemic, including information technology professionals and consultants, who were in high demand to provide a variety of services to struggling organizations as a result of the global pandemic. Specifically, technology consultants did well assisting organizations with remote access solutions to a high percentage of organizational staff count, moving applications into cloud services, migrating on-premise voice systems into the cloud, and with large multiyear projects that were difficult to pause or cancel. That said, other sectors of the consulting world were not immune from impacts related to high global unemployment rates.
I've been through four recessions in my IT career and thought I'd seen it all until I witnessed the global and domestic U.S. impacts of the coronavirus pandemic. Typically, in a recession, the first to go in any organizational cuts are nonessential expenses. Second is capital spending for projects that have not yet been initiated. Third are consultants, followed lastly by staff. Organizations really don't like letting go of staff, even for short-term durations, because they fear the institutional knowledge and organizational experience that could be suffered. Rehiring resources after a recovery can take time with rebuilding lost institutional knowledge sometimes not recovering for years with new hires.
At the height of the pandemic in 2020 and according to researchers from Source Global Research, the global consulting industry “could lose 30 billion of value in 2020.”62 The research team goes on to suggest that the impact of Covid-19 on the global consulting world could be reduced by 19 percent from $160 billion to $130 billion.63 Revenue reductions by region include the following:
15 percent for North America from $78.7 billion to $66.6 billion
28 percent for Europe from $45 billion to $32.2 billion
12 percent in Asia Pacific from $24.8 billion to $21.9 billion
19 percent in Latin America from $5.1 billion to $4.1 billion
18 percent in the Middle East from $3.6 billion to $3.0 billion
14 percent in Africa from $2.9 billion to $2.5 billion64
Impacts on consulting by industry vary widely with energy, healthcare, manufacturing, public sector, and business services rating as higher risk than other industries that include financial services, pharma, retail, technology, media, and telecommunications65:
–25 percent for energy and resources
–12 percent for financial services
–28 percent for healthcare
–21 percent for manufacturing
–7 percent for pharma
–22 percent for public sector
–10 percent for retail
–29 percent for business services
–17 percent for technology, media, and telecommunications66
According to the latest research, the hardest hit services will be those where in which consultants' time and effort likely involves time at the clients' work place with travel to get there and back.67 On the other hand, work that can be done remotely via online meeting and collaboration tools, which include strategy, will be less affected.68 Also, larger multiyear projects that were initiated pre-Covid-19 will be less impacted as organizations are reluctant to kill large multi-year initiatives that align with either cost savings or revenue increases. Small, medium, and large projects that are not critical to an organization's near future success will be considered for shuttering, even if organizations have to pay a penalty to get out of those consulting agreements.
According to the latest Devex COVID-19 Trends Tracker survey of 560 development professionals from 113 countries, 39 percent of respondents indicated that “they or someone they know” lost their job in the year of 2020.69 Independent consultants seem to be the hardest hit with 43 percent of respondents indicating contracts were canceled or more difficult to land.70 Short-term contracts or consulting agreements that required travel and in-person meetings and workshops were affected worse than longer-term agreements.71 According to the head of a consulting firm that works in the Oceania sector, “three out of four consulting assignments were canceled or permanently suspended” as a result of the Covid-19 pandemic.72
Organizations that source staff and consultants will likely change as a result of the recent pandemic, because many organizations have figured out how to be productive with staff and consultants working predominantly remotely. I asked my CxO panel some questions regarding their sourcing levels, pre-Covid, currently, and post-Covid. I also asked about productivity during the pandemic. Their responses follow:
CxO Survey Question: Did you reduce consultants and staff in 2020?
80 percent responded with no change in consultants and staff employment.
20 percent responded that staff was reduced by 10 percent with overall consultants unknown.
CxO Survey Question: What percentage of hiring (consultants and staff) has returned to pre-Covid-19 levels as of today in first quarter 2021?
20 percent responded that staff and consulting reductions have not returned to pre-Covid-19 levels.
CxO Survey Question: When do you forecast hiring of consultants and staff to return to pre-Covid-19 levels?
20
