Overseas earnings double for UK consultants – Financial Times | Region & Cash

The UK services sector saw its most rapid increase in overseas earnings last year, belying concerns about the impact of labor restrictions imposed by post-Brexit trade relations.

Exports of consulting firm services have doubled in 2021, according to the Management Consulting Association, the industry body that oversees the industry. Around 29 percent of fee income was generated abroad, compared to 16 percent in the previous year.

One of the main reasons for this growth, according to industry executives, was an unexpected surge in exports of skilled services caused by the pandemic.

With more and more employees around the world being forced to work from home, international companies found that projects could often be serviced remotely from the UK just as easily as in their own domestic markets.

Meanwhile, UK-based consultants also say they’ve been able to work remotely as effectively as before.

“Clients have seen results delivered and big changes happen without the need for extended face-to-face contact,” says Tamzen Isacsson, MCA Chief Executive. “Our approach to exporting has fundamentally changed.”

According to Lisa Fernihough, head of financial services advice at KPMG, the work was initially spurred by the ability for better-resourced UK businesses to offer services remotely in the early stages of the pandemic.

Many clients also supported government Covid relief projects, says Fernihough, which resulted in more work being outsourced to UK consultancy firms with expertise.

“They didn’t have enough staff or people to do the work, so they turned to consultancies,” she explains. “So it was just the sheer ability and capacity of people that could get things done.

“What has evolved from this is overall increased demand from customers,” adds Fernihough, noting that companies have sought support for major restructuring and the adoption of digital systems.

Paul Terrington, PwC’s UK and Emea Head of Advisory, agrees that his firm’s London office’s revenue has been boosted by overseas clients enlisting its services on complex, digitally-led projects in many countries.

Larger UK consultancies generated a significantly higher proportion of work from overseas clients than from domestic firms, which bosses say shows the benefits of a multi-jurisdictional approach – even when fee income has been allocated to offices in London.

The pandemic and resulting travel restrictions have also prompted a rethink of how overseas clients interact with advisors.

The sector was, according to Isacsson, “heavily business travel-based”, but since Covid there has been a “complete rethink” of working with clients.

“People were like, ‘Oh, we’re coming over in two weeks, we’re flying over.’ . . it was pretty clunky.”

This level of business travel is unlikely to return, Fernihough suggests, now that “our customers have tasted something better; They can access the best person for the job they need more easily and without delays.”

Business travel has all but disappeared for PwC consultants in 2020, says Terrington. Customer-led trips picked up again in 2021, albeit not at the same level. Nonetheless, he predicts a fundamental change in the way PwC works in the future, as project work will require less overseas travel than in the UK.

KPMG also saw a “significant increase in productivity” from remote work, says Fernihough.

The MCA says companies around the world have been receiving more orders from customers, with demand particularly strong in the US, Canada, Australia and South Africa. Other overseas markets that British firms shared were the United Arab Emirates, China, Japan and Singapore.

While the share of fee income from the EU has remained relatively stable, the share from the rest of the world has increased from 8 percent in 2020 to 23 percent in 2021.

Isacsson says it is difficult to assess whether Brexit – and the restrictions on working with some EU customers or traveling in the region – will still have an impact on the sector, as Covid travel restrictions have been the main obstacle so far. “It’s coming,” she says.

Ben Barry, director and co-founder of IT consultancy Coeus, says Brexit has prompted the company to accelerate plans to open an office in Düsseldorf to serve its clients. But since the pandemic, the “visa challenge” is no longer an issue for the company’s UK-based consultants, who once expected to travel a few days a week.

The Düsseldorf office is now often supported by the London team, who work from the UK rather than travel to the EU. “Gone are the days of traveling three or four days straight to a client project,” says Barry.

Author: Amine

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