The growing importance of human resource management has supported the industry
Los Angeles, CA (PRWEB) April 21, 2012
In the five years to 2012, revenue for the HR Consulting industry is expected to increase 0.3% to $24.8 billion. According to IBISWorld industry analyst Andrew Krabeepetcharat, Human resource (HR) management has become more important as the US economy becomes more service oriented, putting emphasis on employee relations and benefits. Recent industry growth has been stifled by the recession, though, which limited corporate profit and clients' ability to pay for consulting services. Furthermore, high unemployment has reduced the demand for some industry services, including advice on recruitment and retention and on employee relations and communication. Luckily for industry operators, rising corporate profit and an improving labor market are expected to increase industry revenue in 2012.
In addition to weakened demand in 2009 and 2010, the industry has faced increased competition from other industries over the past five years. Consulting firms that have traditionally served finance and accounting clients are beginning to offer more HR-related services, says Krabeepetcharat. As a result, the industry has experienced a period of consolidation as firms join forces or acquire other players to be more competitive. For example, two high-profile mergers took place in 2010: Aon Consulting Worldwide merged with Hewitt Associates to form Aon Hewitt, and Towers Perrin and Watson Wyatt merged to form Towers Watson. As a result of consolidation, the number of firms operating in the industry declined 0.7% annually on average to an estimated 81,784 in the five years to 2012. In 2012, IBISWorld estimates that the largest firms in the HR Consulting industry include Aon Corporation and Marsh & McLennan Companies Inc. The industry is primarily composed of a large number of small players, with nearly three-fourths of firms employing fewer than five people.
In the five years to 2017, industry revenue is forecast to increase. As corporate profit and the labor market continue to recover, more companies will return to HR consultants for advice on recruitment and retention; employee relations and communication; and determining optimal workplace hours, attendance, pay and benefits. Over the next five years, large industry operators will turn to overseas markets and add service offerings to encourage growth. Continued competition with other industries, however, will limit profit growth. For more information, visit IBISWorld’s HR Consulting report in the US industry page.
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IBISWorld industry Report Key Topics
Industry firms provide advice and assistance to businesses and other organizations for structuring human resource and personnel policies, employee benefits, compensation systems, wage and salary administration and recruitment and retention. This industry does not include companies that provide professional and management development training or those that list employment vacancies and place applicants in employment.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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