Consulting

The roots of modern consulting began in the late 19th and early 20th centuries, when the first consulting businesses established in the United States studied manufacturing to improve workplace productivity. Many companies began hiring consulting firms to help improve worker and production efficiency. Since then, the need for services has grown with the population and the expansion of business internationally, while the types of services provided have evolved with the economy.

There are four major types of consulting:

1. Management/strategy consulting firms help to improve an organization’s structure, management, efficiency, and profits, and plan strategies for short- and long-term development. According to the Institute of Management Consultants USA, common management consulting specialties include administration, financial planning and control, human resources management and labor relations, incentive compensation, information technology, manufacturing, organizational planning and development, physical distribution, research and development, sales and marketing, strategic and business planning, and wage and salary administration.
2. Financial consulting firms advise on financial issues such as capital budgeting, project valuation, financial information integrity, profit-and-loss reporting, risk management and insurance engagements, global finance operations, ongoing financial control and compliance with laws, tax and treasury optimization, and corporate restructuring.
3. Information technology (IT) consulting firms help clients design and implement IT systems or develop better IT practices; train staff members in IT areas such as hardware/software design setup, network setup and administration, computer security, and search engine marketing; provide strategic advice on social media and IT issues; and offer advice on cutting-edge technology such as blockchain technology, artificial intelligence (including generative AI), the metaverse, and advanced robotics.
4. Human resources/staffing consulting firms help clients make the most of their investments in people (salaried, temporary, and contract workers). These firms manage compensation and benefits programs; advise firms on personnel policies; analyze staffing needs; recruit, hire, and train workers; provide advice on diversity issues; and develop leadership training programs.

Although there are many overlapping areas in the consulting industry, some firms specialize in one area while others have departments for a variety of fields. Additionally, some consulting firms offer expertise in a single industry, such as defense, insurance, retail, health care, education, environment, telecommunications, engineering, or publishing. Consultants who work for the government often specialize by type of agency (environmental, defense, criminal justice, etc.).

Consulting providers can be large firms (such as McKinsey & Company, Accenture, Mercer, and the Boston Consulting Group) that maintain offices throughout the world, small- to medium-sized businesses with local or regional presences, or firms operated by only a few people or even a single consultant.

Many people aspire to become consultants. This career often makes “best job” lists by industry publications—including being ranked as the 5^th-best business career and the 18^th-best career in 2023 by U.S. News & World Report. Consulting jobs are also very lucrative. In 2022, management analysts and consultants earned a median salary of $95,290, according to the U.S. Department of Labor (DOL), much higher than the national median salary ($46,300) for all careers. Consultants at global consulting firms can earn $200,000 to $500,000 annually.

Consultants, analysts, and consulting managers are the key professionals in the consulting industry. In 2022, 34 percent of people in the management, scientific, and technical consulting sectors worked in business and financial-operations occupations (a DOL category that includes consultants). Management occupations, a category that includes consulting managers and top executives (16 percent of workers), make up the next-largest employment group, followed by office and administrative support positions (15 percent) and computer and mathematical positions (10 percent). There are also career paths in business development, administrative services and executive support, information technology support (non-consulting), sales and marketing, communications/public relations, human resources (non-consulting), continuing education, and other areas.

A bachelor’s degree is the minimum requirement for most consulting careers, but many consultants have a master’s degree in business administration. Others have advanced degrees in their specialty, such as engineering, human resources, or accounting. Attending an Ivy League school or a college with a top-rated MBA program increases your chances of landing a consulting job. A good education is only the first step for aspiring consultants. They need extensive field experience (at least six years at major consulting firms) before being assigned top-level work. Some consulting positions also require a graduate-level or professional degree.

In 2022, there were 908,966 management consulting firms in the United States, according to IBISWorld, with combined annual revenue of approximately $330 billion. More than 1.9 million people were employed in the U.S. management consulting industry. Consultants are key players in the business world, and their star will only rise in the future.