Taking the initiative
That the Government’s Private Finance Initiative has run into trouble should not, in itself, be surprising. An initiative that depends on the voluntary involvement of the private sector is always going to be liable to no-shows. And one suspects that this collective dragging of feet may be an attempt to get the Government to sweeten the pot somewhat. One hopes this does not happen – for too long the public sector has borne an unacceptable burden of risk in large projects, while contractors have often enjoyed the luxury of being paid to correct their own mistakes.
It is ironic then, that the concept of PFI has been most enthusiastically embraced by the consultancy industry, traditionally not a capital-intensive industry, and one which has often been unjustly accused of looting the public purse. It is another symptom of a wider change that is coming over the industry, as more and more projects require some form of up-front financing. This, plus the increasing emphasis on outsourcing, plus the new need to maintain global IT infrastructures, are all bringing into question the traditional capital structure of consultancies. In our news pages we – perhaps a bit fancifully – try to assess the position if the major consultancies went to the market. There are clearly fortunes to be made here, but we would suuggest a note of caution. Much of the instability in the consultancy market has come from quoted companies. Partnerships, for all their faults, tend to sail on and on. That consultancies are prepared to shoulder some of the risk in public projects should be a measure of their confidence in their own abilities, not a tribute to their speculative daring.
Scanning the job ads in Management Consultancy or signing up with a headhunter may give partial answers, but the bulk of the information about one’s peer group is locked up in the files in a dozen personnel departments.
That’s why we have teamed up with leading recruitment consultancy Douglas Llambias to launch a major survey of salaries and rewards in the consultancy profession. We hope we can count on your co-operation to make this a truly comprehensive and informative piece of research.