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The Benchmarking Group says consultants are filling the demand for advisory work and presenting a more attractive career path for new entrants.
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Consultant boom threatens accounting sector, expert says
26 June 2024
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Demand for advisory work is fuelling a boom in consultants, encroaching on accountants’ offerings and providing a more attractive career for new entrants, according to one expert.
Data analyst The Benchmarking Group said that in the past five years, the number of business consultants and coaches had nearly doubled, and based on current growth patterns, they were set to overtake accountants in seven years.
“There has been a huge growth in a number of consultants in Australia over the past five years,” head of data analytics Julia Thomson told accountants at Accountants Daily's Accounting Conference & Exhibition in Sydney last week.
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She said there had also been an increase in the need for advisory work – a market traditionally dominated by accounting firms – citing recent regulatory developments such as mandatory reporting and cyber security.
“There is plenty of accounting work right now. Maybe too much work!”
“What’s been happening over the past 10 years is this gap and opportunity is now being filled at a rapid pace – by management consultants and now business coaches. I believe this cohort is creeping in on your market.”
The trend reflected a global pattern, with business coaching emerging as one of the fastest-growing industries worldwide, Thomson said.
“The growth in consultants is a direct response to business owner demand for advisory services. I would argue that a lot of the solutions they are providing can be delivered by accounting firms. So there is a potential missed opportunity.”
The consulting boom also made it an increasingly attractive career alternative for new entrants like students or professionals seeking a career change, draining talent from the accounting pipeline.
The barrier to entry for consulting was lower, with approximately 90 per cent of accountants holding an undergraduate degree or higher, compared to 75 per cent of management consultants.
“It is therefore a seemingly much easier transition for professionals out of accounting – into consultant – compared to vice versa,” she said.
Additionally, consulting was more appealing to students. “One study from UK Consulting showed that consulting and strategy was the top career path for their university students,” she said.
“It showed students twice as likely to want a career in strategy and consulting as they would finance. Reasons for wanting to work in this industry included ‘challenging work’, ‘growth opportunities’, and ‘creative environment.’ Areas that mirror what students in Australia are after.”
Thomson said accountants should respond to this shift by adapting their business models to focus on fewer, higher-value clients and offering more comprehensive, year-round services.
“They're also streamlining operations, potentially through AI integration and automation of administrative tasks,” she said.
Another strategy among top performers was “making it meaningful” through general communications, job descriptions and even in services provided.
“It needs to be fulfilling for employees, exciting and rewarding for the next generation and valuable to business owners,” she said.
“I’m not suggesting the job won’t have tax and compliance. I’m just suggesting that it can be more than this.”
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