After entering the Management Consulting arena 3 years ago with Top-Consultant.com I’ve now joined BLT and come over to the side of recruitment.

It’s been an interesting 3 years and the market has changed significantly in that time.
Back in the day it was the height of the MC boom, companies couldn’t hire fast enough and the world was pretty peachy. Over the last 18 -24 months the bubble burst and we saw a rare contraction in the industry and redundancies were commonplace.

Now we’re seeing an upturn, not a massive one but, since January there’s been a definite momentum shift. The crystal ball question is how the budget cuts and the austerity measures will impact the MC industry? They will make firms more hesitant to sign things off in the short run, there is no doubt about that, and whilst there is no let up in the request for candidates into pipelines, the number of hires for those with a strong reliance on public sector clients has tapered off.

The MCA claim the benefits delivered by consultants to central government last year totaled £3.2bn and with savings to be made, consultants are likely to play a central part in deciding where the savings will be made in the longer term.

After many consultancies had hiring freezes for most of 2009, we are now seeing those with private sector clients rapidly looking to increase their headcounts, with PwC hiring 57 Partners already this year and Deloitte looking to bring on 1,100 graduates.

So I embark on my recruitment journey at BLT and am looking forward to catching up with faces new and old along the way.

NHS hospital offers consultant £1,000 a day to help cut costs. This was one of the headlines in the Telegraph online last Friday.

The trust in Essex plans to pay the “turnaround director” twice as much as the Prime Minister and more than the head of the entire NHS. And this comes at a time when the chancellor has announced a two year public sector pay freeze.

In last week’s budget, George Osborne said that departmental budgets would be cut by up to 25% but that protected departments such as health and education would not be subject to these cuts.

Tom Clougherty, executive director of the Adam Smith Institute think-tank, said “That does seem like a very high, possibly excessive, salary. If this guy is so good that he does decrease costs far more than would have happened without him then it may be money well-spent.”

But he admitted: “I suspect that in the spirit of value for money they could probably get a good turnaround expert who would do a good job for less than that.”

Under the Labour government, spending on the NHS tripled to £105billion a year in a bid to expand the workforce, cut waiting times and improve buildings, but official figures suggest that productivity has fallen.

Figures published last week by the Cabinet Office show that the Department of Health is the biggest spender on consultants and temps, paying out £265m to 1,000 non-payroll workers in 2009-2010.

Last year a secret report by McKinsey, the management consultancy, set out how 137,000 jobs could be cut and non-essential services dropped to save up to £20bn in the health service over five years.

There is a definite need for change in the public sector as a whole and management and interim consultants can play a lead role in bringing about change. But surely this can be achieved at less cost to the public purse?

Last week, George Osborne announced his plans for a banking levy that will be implemented from January 1st next year.

The Chancellor hopes to raise £2 billion annually from the levy which will be based on a bank’s total liabilities, excluding tier one capital and other relatively low-risk debt based on the banks’ balance sheets. It will be initially set at 0.07% and will not be deductable for corporation tax purposes.

The British Bankers Association was quick to respond to the proposal saying that we must ensure bank taxes do not hurt our national interests or provide an unfair advantage for other businesses operating here. Although this levy will apply to all banks regardless of nationality, there are also other countries creating similar levies. It is therefore important that bank levies are co-ordinated internationally so that international banks do not find themselves taxed multiple times for the same thing.

There was opposition to the proposal from Aldermore, the new British bank. It wants all SME lending to be exempt from the banking levy, to make it easier for small businesses to access the funding they need.

At last weekend’s G20 summit, Europe did not get global support for a bank levy, but it did get G20 backing for some form of contribution from the financial sector to pay the cost of government interventions in that sector according to a set of common principles.

In light of the comments from the BBA, is it right for the Chancellor to push ahead with the bank levy in its current form? And if so, what can be done to prevent banks being taxed multiple times?

The NHS has always been a ripe stomping ground for Consultancies; the woes and sizeable invoices made by consultants on the Connecting for Health programme are highly publicised.

A year before the end of New Labour, the DoH, headed up then by Alan Johnson, commissioned a report by the strategy firm McKinsey & Co, to look at generating efficiencies in the NHS. Their response: cut the work force by 10%, and through our other processes, realise £13-20bn in saving over 3 to 5 years. That’s a 15-22% reduction in overall NHS spend.

Wow – that’s a bombshell, and it was smothered by Labour. Yesterday it was published by Conservative Health Secretary Andrew Lansley. You can read the report here:
http://bit.ly/aA6fEs

But health secretary Andrew Lansley has distanced himself from the advice, claiming it is indicative of a "top-down" approach that would not achieve its aims.

The Department of Health released the plan, Achieving World Class Productivity in the NHS, under Freedom of Information on 2 June 2010. Dated March 2009, it had not previously been made public, although its proposals to cut 137,000 posts were leaked last year.

On shifting care from hospitals to cheaper locations, McKinsey says that, based on experiences in the US and Germany, these techniques would save between £1.9bn and £2.5bn annually

What does this mean for the health consulting market? Good things. Change is always good for the consultancies, and I think the NHS is going to continue to require that help. There is going to be lots of change management, process improvement and so on. We need these savings to happen.

This sentiment is reflected in what we are seeing from our clients – I have senior level roles at 4 consultancies that are looking for people to grow this offering in the health space. If your interested then please get in contact – 0207 419 0909

Recent research from Interim Partners shows that more than 10% of interim executives receive payment of over £1,000 per day and a further 74% get paid more than £500 per day.

Interim executives don’t get the benefits such as holiday pay and pensions that permanent employees receive and therefore their take home pay tends to be greater than regular staff members.

Due to the recession, a third of interims had to cut their rates last year but 38% of the interims surveyed expect to see an increase during 2010.

Despite the financial crisis, demand for interim executives in the financial sector actually increased. Interims with experience in corporate turnaround, cash management, procurement and cost cutting were able to maintain, and in some cases, increase their rates.

Although we are now officially out of the recession, the financial services sector is again expected to be the biggest user of interims in the coming year and it is expected that the highest demand will be for change management specialists.

Doug Baird, Managing Director of Interim Partners, explained this by pointing out that many of the large financial institutions had had to freeze all but the most essential hiring over the past 2 years and now that the recovery is underway they need to reorganise their business priorities. To do this they need to apply change management and it is usually only interims or management consultants who possess the requisite skill set to accomplish this.

Interim Partners research also reveals that a lot of interim executives think the government should outsource more Whitehall functions to the private sector. Another cost saving measure they could consider is reducing headcount by investing more in IT.

Intensified by the recent cuts announced by the Coalition, the NHS is predicted to be the biggest user of interims over the next 12 months, followed by Central Government and Local Government.

Doug Baird, said: “From their hands on experience of implementing cost saving programmes across thousands of public and private sector organisations, interims say that the best way of balancing savings against service is through outsourcing.

“A lot of interims have spent the credit crunch implementing belt-tightening measures for businesses so they are definitely a constituency worth listening to.”

Another survey conducted by Alium Partners has revealed that 54% of the latest interim assignments were for company or divisional turnaround projects.

Probably due to the formalised cuts in public sector funding, 78% of senior interims expect to work in the private sector this year and they expect to see a high demand for their expertise in leading cost reduction programmes and operational efficiency projects.

Although the private sector looks set to benefit this year from the use of interim executives, what are the prospects for those wishing to work in the public sector?

George Osborne has already announced £6 billion will be cut from the public purse over the coming year; we still don’t have all the details on where cuts will fall.

Would the Chancellor be wise to reduce the number of interims drafted into the public sector at a time when change is called for? Or, in the short-term, would he be better advised to increase the use of interims with change management expertise in order to end up with a more streamlined, efficient public sector in the future?