COVID-19 | Update for 3 April 2020

We're all facing unprecedented challenges in the next few weeks and months, in our daily lives, in our communities, and in our businesses. But we're already seeing evidence of how, if we work together, we can make a difference.

It's in that spirit of collaboration that Source has put together an estimate of the impact we think COVID-19 will have on the global consulting industry during the course of 2020. We're very grateful for the input of a wide range of firms from around the world who've helped us do this, providing up-to-the minute information on how we should adjust our existing model of the industry.

While based on the best information we have at the time of writing, our forecast and commentary are intended to be directional, providing guidance for future planning. In an environment where everything is changing very quickly, our predictions will inevitably change. Over the coming months, we will be updating the forecast on a weekly basis. For more information on our data and methodology, please see the end of this bulletin.

Please help us to help you: We've only been able to pull this forecast together so quickly because of the input of the hundreds of firms from all over the world who responded to our initial survey. Please help us by sending us your updates week by week, by following this survey link. Every single one of these responses helps us improve our forecasting.

Summary: 3rd April

We estimate that the COVID-19 virus could reduce the size of the consulting industry by 20%, from $160bn in 2019 to $129bn in 2020. While this is unchanged from last week, it masks some small, but potentially important changes at the service line and sector level. The situation in the US is unquestionably weakening but still at a relatively slow rate; offset against this are early signs that a shortage of capacity and expertise in some sectors will result in client organisations turning to third parties for support. With this in mind, the format of this week’s update is slightly different, allowing us to focus more on the likely fortunes of individual consulting service lines.

Although our headline figure hasn’t changed materially since last week, both the US and Asia Pacific look slightly worse. These markets are expected to shrink by 19% and 14% respectively during the course of 2020, driven by the lack of a coordinated response to the healthcare crisis in the US and concerns about a worsening situation in Asia. India, which was a $3.4bn domestic consulting market in 2019, looks as though it will be particularly badly hit, with many firms badly equipped from a remote working point of view.

When we launched this analysis, a mere three weeks ago, there was a working assumption that recovery would take place over the summer and that the crisis, at least from the consulting industry’s point of view, would be V-shaped: fast in but fast out. No one we’ve spoken to, or who has been kind enough to respond to our survey, thinks that’s the case anymore: Recovery has been pushed back to Q4 of the year, with an acknowledgement that this crisis is likely to be U-shaped. That being said, while we think that Q2 will be worse than we predicted last week (-30%, down from -24% last week), we encountered more optimism about the forecast for Q4.

That end-of-year optimism is being driven by two factors.

The first is the potential impact of the plethora of government initiatives announced in recent days to protect vulnerable people and to shore up critical parts of national economies. We wrote last week about the extent to which this frenetic activity, which is often outlined in public before the detail is worked out in private, is likely to be beyond the capacity of many public services to deliver—and have since heard examples of where that’s already proving to be the case. This will, we think, translate into an increasingly positive picture in public sector and healthcare consulting. Based on our current estimates, we think public sector consulting will shrink by 19% this year, an improvement on the 23% fall we predicted previously, and that healthcare consulting will shrink by 29%, compared to 33% last week. Both of those figures are likely to improve further if, as expected, this practice becomes more widespread.

  Sector 2020 forecast
% change
Energy & resources (27%)
Financial services (13%)
Healthcare (29%)
Manufacturing (27%)
Pharma (6%)
Public sector (19%)
Retail (18%)
Services (31%)
Technology, media & telecoms (12%)
  Total (20%)

There’s considerable variation by country here, however. In markets where there’s a long history of governments making use of outside help such as the UK, demand for consulting in the public sector may only shrink by 11%, but in others, where the governments have already been trying to cut back on their use of consulting services (in some Nordic countries), any boost from this may be much more limited. Limited budgets and an unwillingness to use external consulting help haven’t been features of consulting markets in the Gulf region, especially in Saudi Arabia, but the constraint here could be lack of supply: Always short of expertise, consulting firms in the region have been able to meet demand by flying people in, and that’s clearly not an option at the moment. Meanwhile some firms have won contracts to help the US federal government and some states respond to the COVID-19 crisis but, going forwards, this will require a shift in buying behaviour, so we’re still predicting a 21% reduction in the US public sector consulting market this year.

Moreover, this type of work won’t be evenly distributed. In times of crisis, large corporations—and government institutions are no exception—tend to turn to the big, iconic consulting firms, partly through risk aversion, partly because such decisions are easier to justify to stakeholders. Finding a foothold in this market will therefore be difficult for small and mid-sized consulting firms—and almost impossible if they don’t already have a record of public sector work. Given the scale of what may be involved, the larger consulting firms may find they have to work together, and with outsourcing companies.

The second source of optimism is around the types of services for which there may be relatively strong demand either during the crisis or in its immediate aftermath. It will come as no surprise that we’re expecting a surge in corporate recovery and turnaround work, or that firms with a strong heritage of delivering tangible results very quickly will be especially sought after. Although most ongoing strategy projects survived the transition to remote delivery, demand for this type of work is likely to be depressed by very low deal volumes, by significantly reduced private equity activity in the short term, and by the fact that some clients aren’t yet comfortable with holding the types of difficult discussions strategy typically involves on a remote basis.

Our forecast for HR & change work is, frankly, dismal. Always at risk of being seen as a nice-to-have, even on large-scale technology projects, much of this type of consulting is necessarily face-to-face, so persuading clients to complete existing projects, let alone start new ones, will be difficult. The prognosis for risk & regulatory work is being buoyed by growing demand for cybersecurity support, with clients concerned that their very rapid adoption of new technology will expose them to problems further down the line. The forecast for operational improvement is similarly being boosted by the need for supply chain expertise.

  Services 2020 forecast
% change
Financial management (29%)
HR & change (40%)
Operational improvement (20%)
Risk & regulatory (20%)
Strategy (31%)
Technology (11%)
  Total (20%)

Sitting above all this is the question of the extent to which clients will, once they’ve dealt with their most urgent priorities, start to look for a more comprehensive response to the crisis. Already, early indications from our research are that this will be the case, but also that the bar to entry for this kind of work is likely to be set high. Given the ranges of capabilities it will require—from business model change to supply chain work, and to technology—it’s possible that COVID-19 response projects become another example of the type of multidisciplinary working clients had been looking for, pre-crisis, from digital transformation projects. While it makes sense to talk about changes to conventional service lines at the moment, we may well find that, over the course of the next few months, COVID-19 challenges how firms categorise their capabilities and deliver their work.

Further questions

We've included details of our model and forecasting methodology below. If you'd like to know more about how we've created our forecasts or want to understand how the year is likely to play out at a more granular level for your firm, please contact


In order to calculate this forecast, we've taken the most recent forecast from our model of the consulting industry, which was prepared pre-crisis, in early January 2020. This unique model is built bottom-up, by estimating the number of people employed by several thousand major and mid-sized firms across 84 countries, 29 industries, and a range of services. We then apply a series of metrics and adjustments around the revenue per consultant. Where possible we validate this data against published sources and interviews with senior people in the firms concerned. Although some of our 10 million individual data points and assumptions may be wrong, when aggregated, they provide a robust view of consulting markets around the world. Moreover, because of the way this model has been built, we can adapt it to take account of new scenarios—as we have done here. In order to understand the likely impact of COVID-19 on the consulting industry, we've developed forecasts at the level of individual service lines, quarter by quarter, then modified these depending on industry and country. Please note that all the data in this bulletin is for the calendar year 2020 and is in US dollars. We've calibrated our assumptions with a number of major and mid-sized firms.


One of the greatest challenges with sizing any part of the consulting industry is that “consulting” means different things to different people. Over the last 12 years, Source has adopted a consistent definition, and this underpins all our published material about the consulting industry. It includes traditional management consulting services (strategy, HR & change, operational improvement, risk & regulatory work, and technology consulting), but does not include systems development and integration, and outsourcing services.


Our model also focuses on what we call "big consulting", work done by consulting firms with more than 50 consultants typically for clients with a turnover in excess of $500m.

About Source Global Research

Source Global Research is the leading provider of research about the professional services market. Founded in 2007, we serve the world's leading professional services firms and their clients with expert analysis, data, and insights. Firms come to us because they know we offer transparency in a notoriously opaque market. We provide direction and evidence about changes in the marketplace, helping firms cut through what can sometimes be intractable discussions around future direction by being objective and honest.

Data sits at the heart of what we do, and our model of the professional services market is the largest and most sophisticated in the world. Data in the model comes from extensive desk research, and interviews with over a thousand senior partners from around the world. It feeds into our customers' business strategies and helps them prepare for the future. We also place a strong emphasis on the views of clients of professional services firms (we conduct some of the largest interviews on this sector in the world) and listen to what clients need, and how their views are changing in the marketplace.

Please note that, because we work with such a wide range of firms, we take confidentiality very seriously. Our ongoing research programme, including interviews, and customised project work with individual firms, gives us an extensive foundation of knowledge and allows us to work on some of the most confidential issues these firms have.

Our independence and knowledge of the professional services industry means that we're trusted to set our work within the wider market context, helping firms make the most of the opportunities on offer. Our customers would tell you that we have a strong commitment to doing the very best for every firm we work with, and are thoughtful, friendly, and easy to work with.

Please help us to help you: We've only been able to pull this forecast together so quickly because of the input of the hundreds of firms from all over the world who responded to our initial survey. Please help us by sending us your updates week by week, by following this survey link. Every single one of these responses helps us improve our forecasting.