Professional Services: Overcoming a new set of headwinds to drive growth

After experiencing a period of remarkable growth in 2021 and 2022—both in terms of revenue and headcount—North American professional services organizations are now facing a new set of headwinds that are testing the industry’s resilience.

Korn Ferry's cross-market report of over 200 executives explored what’s on the minds and agendas of key decision makers for the next 12 months. Respondents agreed that the immediate focus should be on addressing two concurrent events that are actively reshaping the model of professional services and consulting:

• Increasing downward pricing pressure from clients is sparking a reimagining of the traditional rate model.
• Decreasing client demand for services has led to decreased staff utilization—the primary metric in consulting.

While economic conditions remain uncertain, most surveyed professional services leaders are cautiously optimistic and confident that the current challenges are temporary. Client demand in legacy service lines may be lessening, but industry experts propose this quiet period presents a unique opportunity for firms to build out their subject matter expertise in AI and automation.