This vast and dynamic sector is always shifting and changing. Understand the lay of the land with the latest statistics about professional services.
‘Professional Services’ is one of the biggest industries in the world. Considering it spans any business providing specific support to other professionals, it is always growing and changing, responding to market trends, and reacting to new technological developments.
The sheer scale of this industry is also mirrored in the information available. So, to help you better understand the nuances of professional services, its challenges, and trends that’ll shape its future, we’ve compiled the most relevant data on the topic. Let’s get stuck in!
There’s no other way to say it: professional services are a huge industry. And it’s only set to grow, according to the latest data.
Unsurprisingly, North America is the largest region in the professional services market. According to a recent report, North American businesses accounted for 35.4% of the market in 2022.
Across the pond, the UK’s professional services market is also flourishing. As the largest and most developed market in Europe, accounting, management consulting, and legal services contributed £71.5bn to the country’s real output in 2023. The industry as a whole contributed a substantial £243.7bn to UK real gross value added (GVA) in the same year.
From a global perspective, Statista projects market revenue to reach $72.61bn in 2024. With no signs of slowing down, the services market is anticipated to show an annual growth rate (CAGR 2024-2029) of 5.62%, resulting in a market volume of US$95.44bn by 2029.
Understanding exactly what businesses ‘professional services' encompasses can be a little confusing, as there is a huge amount of variance. Here are the most common types of work sold by professional services organizations in the Americas in 2023, according to Statista:
The professional services sector includes everything from IT consultants to design firms, meaning working experiences will differ hugely from business to business. Here’s what the numbers reveal about working in professional services, focusing on financial services and consulting statistics.
As of June 2024, almost 23 million people were employed by professional services businesses in the US, with the average annual wage across all professional and business services sitting around $86K. Professional services include hundreds of job roles, ranging from financial advisors and paralegals to HR managers and marketing executives.
Let’s break down the top job roles (and their average wages) for the four key players — or biggest subsectors — in the US, according to the International Trade Administration.
Accounting. Of the over one million professionals who work in accounting, the most common roles are:
Architectural and engineering. Over 1.5 million people are employed in this industry, with the most common occupations being:
Legal services. By the close of 2020, there would have been around 1.1 million people employed in the legal sector, with services including litigation support, plaintiff and defense work, and general corporate services. The top occupations were:
Management consulting services. Lastly, we have management consulting firms with an estimated 1.5 million employees. The top roles are:
Likewise, professional services make up the largest employment sector in the UK; over 2.4 million people worked in financial and related professional services in 2022, accounting for 7.5% of total UK employment, breaking down into the below subcategories:
You may have noticed that some professional services jobs have exceptionally high wages. This may be in part because they have particularly high barriers to entry.
According to the UK’s Office for National Statistics, the professional, scientific, and technological activities sector has the most highly qualified workforce of all industries in the country, with a qualification index score of 3.49 out of 4*.
Around 70% of the sector’s staff completed higher education qualifications, while only 15% left education after obtaining high-school-level qualifications.
This is unsurprising, as over half (60%) of the workforce is comprised of professional and associate professional roles, which usually demand higher qualifications.
*This data point represents the spread of qualification levels across workers in the sector, suggesting these sectors skew towards advanced qualifications.
It’s widely accepted that professional services employees are expected to work overtime; this is especially true for consultancies, where employees regularly work long consulting hours. This is due, in part, to demanding workloads and workplaces that cultivate a culture of overworking,
One report by Consultancy.uk found that consultants typically work 50 to 80 hours a week to meet the demands of their role, with 77% of top consultants working an average of 9.3% more than their contracted consulting hours.
Countless reports have shown what many have long suspected: professional services businesses — namely law firms, consultancies, and financial institutions — have a problem with diversity.
While efforts are being made to change this, development is happening slowly. The data reveals that minority ethnic groups, women, and those from lower socio-economic backgrounds are all at a disadvantage when it comes to being hired by and progressing in a professional services business. Let’s dive into it.
Shockingly, over 100 of the FTSE250 have no ethnic minority representation on their boards or failed to provide data to the latest Parker Review, and while Asian Americans make up 12% of the professional workforce, they only represent 4.4% of the board leadership in Fortune 1000 companies.
According to a report on diversity in US law firms, 84% of all lawyers are white, and only 9% of partners at law firms are minorities. In the UK, where London is the leading center for highly-skilled financial services jobs, only 2% of finance and insurance employees are black, even though 13.5% of Londoners are black. What’s more, less than 1% of senior leadership-level employees are black.
There is also a significant gap between the positions held by men and women, with Deloitte reporting that only 19% of C-suite positions in banking, capital markets, and payments are held by women.
Finally, almost 9 in 10 senior roles in financial services are held by people from higher socio-economic backgrounds, despite just 37% of the general population coming from such backgrounds. To put this in perspective, just 1% of senior positions are held by ethnic minority females from working-class backgrounds.
As we noted, there are many barriers to entry into the professional services sector, which disproportionately impact African American and LatinX workers; one study found that adding a degree requirement screens out 76% of African Americans and 83% of LatinX workers in the US.
However, getting your foot in the door as a member of a disadvantaged group is only half the battle; there is also the issue of progression.
A 2020 FSCB survey found that minority ethnic women faced disproportionate barriers to progression, while a report from Reboot found that 57% of those from an ethnic minority employed in financial services feel their talents are being overlooked.
In the UK, those from lower socio-economic backgrounds are twice as likely to report that their background has negatively impacted their careers.
Thankfully, many clients are demanding workforce transformation with a focus on diversity from their service partners. In one notable example, HP reportedly withholds up to 10% of billed invoices if law firms don’t meet its requirements for diverse staffing.
Changing client expectations have forced professional services to move with the times, with many businesses implementing diversity, equity, and inclusion initiatives. However, some subsectors are better at measuring the impact of these initiatives than others: 84% of law firms track the success of their DEI initiatives, compared to just 55% of architectural firms.
Building a diverse workforce and inclusive work environment is not only ethically correct but also imperative for businesses wanting to survive in the long term. According to McKinsey, diversity has a huge impact on companies’ financial performance, with those in the top quartile for gender diversity on executive teams being 25% more likely to have above-average profitability than companies in the fourth quartile.
According to research from Forrester, Kantata, and Salesforce, many organizations are finding it difficult to achieve their goals and meet their top priorities. Here’s what respondents said they find ‘very’ or ‘extremely’ challenging:
Keeping these consulting challenges in mind, let’s look at the big trends in the professional services sector.
You may think professional services and technological advancement go hand in hand, but this hasn’t always been the case. In fact, 45% of professional services companies still prioritized leads and opportunities manually in 2020. But that’s slowly changing, with technology adoption representing ample growth opportunities.
Here’s what recent reports have revealed about technological adoption in the sector:
Utilizing big data is an effective way for professional services to make informed decisions, grow revenue, and optimize processes, from resource allocation to project billing.
In fact, research suggests that businesses that use big data to inform decision-making can see up to 10% increases in profit and a 10% decrease in overall costs. In one report into how businesses will use next-gen technology to fuel growth, Bloomberg found that 88% of CFOs believe fostering a data-driven culture in finance will be critical to future performance. They see the greatest need to invest in:
Similarly, more businesses are drawing a connection between good resource planning for professional services and improved productivity, performance, and customer satisfaction, understanding that this process, too, is driven by data.
However, a Workday report discovered that many businesses are experiencing tech limitations that are impacting their ability to plan and forecast effectively, which is impacting financial management and customer satisfaction. These are the top challenges organizations have been facing in managing systems, processes, and functions:
As a result, 21% of businesses are considering investing in professional services automation, while 18% want to improve decision-making with AI and machine learning. 60% agree that their current investment in resource management tools is not meeting their business needs and is impacting critical processes, while 53% say the same for 53% project time and expense tracking and management.
According to Salesforce, 79% of business development professionals rated ‘expanding inside key accounts’ as a top priority.
Delivering great client experiences should be a top priority for any service organization, as doing so will increase client satisfaction and retention, supporting long-term success. However, doing so requires having the right digital tools in place, making the need for digital transformation all the more important.
Many employees have noted a need for automation as they spend too much time on repetitive activities, such as logging emails and phone calls (60%), sales data and client notes (58%), generating quotes and proposals, and gaining approvals (57%). Automating these activities would allow people to focus on building relationships with their clients.
These concerns track with the top reasons customers gave for ending a commercial relationship with a professional services firm in a report from the Financial Times, blaming poor service delivery (29%), limited strategic advice (25%), and a lack of innovative approach (25%).
Interestingly, 8% of professional services organizations have adopted Agile practices to support iterative client engagements and agile project management.
So, what can those looking to scale a service business take away from these insights? Here are three key learnings:
1. Customers expect your team to be diverse. If you aren’t meeting diversity requirements, it’s time to look at your hiring practices.
2. Remember the value of big data. Data is key to making impactful decisions, including maintaining billing accuracy, informing hiring decisions, and optimizing project management.
3. Invest in resource management tools. All firms can benefit from optimizing their processes, which means reviewing their tech stack. Resource management tools are a great starting point for automating manual processes, consolidating data, and accessing insights based on real-time employee data.
Learn more about how optimizing resource management can help professional services organizations become more profitable and resilient.
.avif)
