Professional Services Market Characteristics
The professional services market consists of the sales of professional services and related goods by entities (organizations, sole traders and partnerships) that offer services that provide support to businesses of all sizes, in all industries, and to individuals and institutions, in processes where human capital is the major input. Professional services establishments make available the knowledge and skills of their employees, often on an assignment basis, where an individual or team is responsible for the delivery of services to the client.
The professional services market is a broad market which comprises several occupations, which provide support to businesses of all sizes and in all industries. The business entities, which are engaged in providing professional services, are generally referred to as professional services organizations (PSOs) or professional services firms (PSFs).
Professional Services Market Size
The global professional services market reached a value of nearly $5,700.2 billion in 2018, having grown at a compound annual growth rate (CAGR) of 7.4% since 2014.The global professional services market is expected to grow at a CAGR of 9.1% to nearly $8,082.4 billion by 2022.
Growth in the historic period resulted from globalization, technological developments, companies outsourcing back end operations to low cost economies and increased mergers and acquisitions (M&A). Factors that negatively affected growth in the historic period were regulatory challenges, government regulations, skilled workforce shortages and scandals in the accounting industry.
Going forward, faster economic growth, transitions in financial reporting standards and regulatory reforms will drive growth. Factors that could hinder the growth of this market in the future include increasing penetration of DIY design tools, skilled workforce shortages, rising costs and decreasing margins, and reductions in free trade.
Professional Services Market Drivers
The Key drivers of the professional services market include:
Globalization – Professional services firms are entering into new markets to serve local clients, sometimes by acquisitions, partnerships and collaborations with local companies to offer a wider range of architectural, designing, consulting and other services to a wider range of customers. Many clients have a global presence and require more sophisticated and internationally-oriented services, driving the demand for professional services. For instance, in 2018, Surbana Jurong, a Singaporean infrastructure and urban development consultancy company, acquired B+H Architects, a Canadian firm, to boost its capabilities in the healthcare and hospitality sectors. Similarly, Kantar Group, a WPP company, offers market research services in 100 countries through a network of 12 companies. This rise in globalization drove the market during the historic period.
Professional Services Market Restraints
The key restraints on the professional services market include:
Shortages Of Skilled Workers – competition among professional services firms and the lack of suitably trained employees contributed to skill shortages in the industry. For instance, according to a survey of 167 firms conducted by the Confederation of British Industry (CBI) in 2017, many respondents from the professional services industry reported that skills shortages are affecting their businesses. Similarly, according to Engineering UK’s 2017 State of Engineering Report, the UK faced a shortage of around 20,000 skilled engineers, due to the high level of qualification which is required for these professions. Firms in this market require trained and qualified professionals which further restricts the talent pool available and that drives salaries. Such skill shortages were major issues faced by the professional services firms
Professional Services Market Trends
Major trends influencing the professional services market include:
Value-Oriented Revenue Model – Companies in the design, research, promotional and consulting services market are shifting from the traditional per-hour and per-month revenue model to a value-oriented revenue model. In line with increasing wages and pressure from clients to decrease pricing, many companies are shifting towards value-oriented billing. Value-oriented billing is easy to apply in markets such as management consulting and market research since the value (such as tax savings, damage awards, ad placements or the size of an acquisition or merger) is often explicit. It is expected that more design, research, promotional and consulting service providers will shift to value-based pricing as they try to become “advisors” rather than just service providers.
Increased Adoption Of Digital Advertisements – General professional service agencies are rapidly shifting towards IT transformation and digitalization of services. With the emergence of advanced data analytics, big data is turning out to be a critical tool for market research companies while executing research projects on a large volume of data to offer analytics solutions to give more robust insights to their clients. Advertising and PR firms are offering digital campaigns taking advantage of increasing digitalization and advances in social media, search engine marketing, content marketing and e-commerce technology. As a result of increasing internet penetration and smartphone users, online content marketing campaigns are expected to be 3 times more effective than traditional ones and comparatively cost 62% less. According to a report by Altimeter Group, 78% of global companies plan to have independent social media marketing teams in 2016, from 71% in 2015 and 67% in 2012.
Opportunities And Recommendations In The Professional Services Market
Opportunities – The top opportunities in the professional services market will arise in the design, research, promotional and consulting services segment which will gain $1,810.1 billion of global annual sales by 2022, and in China, where the market will gain the most at $423.6 billion. Market-trend-based strategies for the professional services market include developing specializations to cater to demand from niche markets, using 3D printing technology in the design services industry for faster release of products at lower costs, opting for virtual firms to reduce operational costs, and collaborating with micro influencers for marketing campaigns. Player-adopted strategies in the professional services industry include investing in data and analytics technologies to innovate and expand offerings, expanding through mergers and acquisitions and targeting small and medium social enterprises.
Recommendations – To take advantage of these opportunities, The Business Research Company recommends the professional services companies to focus on sustainable designs, offer geospatial services, focus on expanding through collaborations, offer value-oriented billing and focus on middle class populations in emerging economies, among other strategies.
Professional Services Market Segmentation
The Professional Services market is segmented by type of service and by geography.
By Service Type-
The professional services market can be segmented by service type into
- a) Design, Research, Promotional And Consulting Services
- b) Legal Services
- c) Accounting Services
- d) All Other Professional, Scientific, and Technical Services
The design, research, promotional and consulting services market was the largest segment of the professional services market in 2018 at 72.8%. The all other professional, scientific, and technical services market will be the fastest-growing segment going forward at a CAGR of 10.9%.
By Service Type For Design, Research, Promotional And Consulting Services -
The design, research, promotional and consulting services market is segmented by type of service into
- a) Architectural, Engineering Consultants And Related Services
- b) Scientific Research And Development Services
- c) Management Consulting
- d) Advertising, Public Relations, And Related Services
- e) Market Research Services
- f) Design Services
- g) Photographic Services
- h) Environmental Consulting Services
By Service Type For Architectural, Engineering Consultants And Related Services -
The architectural, engineering consultants and related services market is segmented by type of service into
- a) Engineering Services
- b) Architectural Services
- c) Laboratory Testing Services
- d) Surveying And Mapping
- e) Building Inspection Services
- f) Geophysical Services
- g) Drafting Services
By Service Type for Global Scientific Research And Development Services -
The global scientific research and development services market is segmented by type of service into
- a) Social Sciences And Humanities Services
- b) Life Sciences Services
- c) Physical And Engineering Sciences
- d) Biotechnology Services
By Service Type for Global Management Consulting -
The global management consulting services market is segmented by type of service into
- a) Financial Advisory
- b) Operations Advisory
- c) Technology Advisory
- d) HR Advisory
- e) Strategy
By Service Type for Global Advertising, Public Relations, And Related Services -
The global advertising, public relations, and related services market is segmented by type of service into
- a) Advertising Agencies
- b) Print Advertising Distribution
- c) Direct Mail Advertising
- d) Public Relations
- e) Billboard & Outdoor Advertising
- f) Media Buying Agencies And Representative Firms
- g) Promotional Products
By Service Type for Global Market Research Services -
The global market research services market is segmented by type of service into
- a) Marketing Research And Analysis Services
- b) Translation Services
- c) Public Opinion And Election Polling
By Service Type for Global Design Services -
The global design services market is segmented by type of service into
- a) Industrial Design Services
- b) Graphic Design Services
- c) Interior Design Services
- d) Fashion And Other Design Services
By Service Type for Photographic Services -
The global photographic services market is segmented by type of service into
- a) Portrait Studios Services
- b) Commercial Studios
By Service Type for Global Environmental Consulting -
The global environmental consulting market is segmented by type of service into
- a) Site Remediation Consulting Services
- b) Others- Environmental Consulting Services, Water And Waste Management Consulting, Environment Management, Compliance And Due Diligence
By Service Type For Legal Services -
The legal services market can be segmented by type of service into
- a) B2B Legal Services
- b) B2C Legal Services
- c) Hybrid Legal Services
- d) Criminal Law Practices
By Geography - The professional services market is segmented into
- o North America
- o Western Europe
- UK
- Germany
- France
- Spain
- Italy
- o Asia Pacific
- China
- Japan
- India
- Australia
- o Eastern Europe
- o South America
- o Middle East
- o Africa
North America was the largest market for professional services, accounting for 33.4% of the global market in 2018. It was followed by Western Europe, Asia-Pacific and then the other regions. Going forward, e the fastest growing regions in the professional services market will be in South America and Asia-Pacific, where growth will be at CAGRs of 16.4% and 12.4% respectively. These will be followed by the Middle East and Africa where the markets will grow at CAGRs of 12.2% and 13.1% respectively.
Professional Services Competitive Landscape
Major Competitors are:
- • Deloitte Touche Tohmatsu Limited
- • PricewaterhouseCoopers (PwC)
- • Ernst & Young
- • KPMG
- • Accenture Plc
Other Competitors Include:
- • WPP plc
- • Omnicom Group
- • McKinsey & Company
- • AECOM
- • IBM
- • Others
- • BDO
- • Beijing Dentsu Advertising Co.Ltd
- • BIRDMAN
- • Everis
- • Lince Consulting
- • Linklaters
- • WPP Group
- • Ogilvy & Mather
- • 2ETW Consulting Services
- • AECOM
- • Environmental Resources Management (ERM)
- • RSM
- • Jung von Matt
- • Zenith Optimedia
- • PwC
- • Deloitte
- • Moore Stephens UK
- • DLA Piper International
- • Clifford Chance Allen & Overy
- • AMEC Foster Wheeler
- • BlueFocus Communication Group Co. Ltd.
- • Ruihua CPA
- • BDO China Shu Lun Pan CPAs
- • Ernst &Young Hua Ming CPA
- • KPMG Huazhen CPA
- • Pan-China CPA
- • Dentons
- • Yingke Law Firm
- • DeHeng Law Offices
- • Serviceplan
- • Boston Consulting Group
- • Nous Group
- • Pacific Strategy Partners
- • Port Jackson Partners
- • Allens Linklaters
- • Ashurst
- • Clayton Utz
- • Herbert Smith Freehills
- • King & Wood Mallesons
- • MinterEllison
- • CSIRO
- • ANZAC Research Institute
- • Black Dog Institute
- • Bain & Company
- • Accenture
- • Grant Thornton
- • McKinsey & Company
- • Cuatrecasas
- • Garrigues
- • Uria Menendez
- • Certio Medio Ambiente
- • Mediterra Environmental Consultants
- • Environmental Technology Consultants S.L (ENTECO)
- • Amphos 21 Consulting S.L.
- • Oliver Wyman
- • Roland Berger
- • A.T. Kearney
- • Freshfields Bruckhaus Deringer
- • Havas Media
- • Zenith Optimedia
- • Carat France
- • Dentsu
- • AECOM
- • Yekom Consulting Engineers
- • NM Environmental Surveys Inc.
- • BonelliErede
- • Cleary Gottlieb Steen & Hamilton
- • Baker & McKenzie
- • FinExpertiza
- • Akin Gump Strauss Hauer & Field LLP
- • Allen & Overy
- • CMS
- • Red Keds
- • Actis Wunderman
- • Nectarin
- • SHANECO Group
- • FRECOM Ltd
- • Plus K- (CPG)
- • Nehlsen Middle East Environmental Consultancy
- • International Gulf Engineering Consultancy Bureau LLC (IGB)
- • AquaBioTech Group
- • Enviro Analysts & Engineers Private Limited
- • Swan Environmental Private Limited
- • DDB Mudra Group
- • Rediffusion
- • FCB Ulka
- • Omnicom Group
- • Publicis Groupe
- • Interpublic Group
- • NECS Environment Consulting Ltd.
- • Crowe Horwath
- • Baker Tilly
- • Adi Associates Environmental Consultants Ltd
- • WMcCann
- • AlmapBBDO
