Management, scientific, and technical consulting firms influence how businesses, governments, and institutions make decisions. Often working behind the scenes, these firms offer resources that clients cannot provide themselves. Usually, one of the resources is expertise-in the form of knowledge, experience, special skills, or creativity; another resource is time or personnel that the client cannot spare. Clients include large and small companies in the private sector; Federal, State, and local government agencies; institutions, such as hospitals, universities, unions, and nonprofit organizations; and foreign governments or businesses.
The management, scientific, and technical consulting services industry is diverse. Almost anyone with expertise in a given area can enter consulting. Management consulting firms advise on almost every aspect of corporate operations, including marketing; finance; corporate strategy and organization; manufacturing processes; information systems and data processing; electronic commerce (e-commerce) or business; and human resources, benefits, and compensation. Scientific and technical consulting firms provide technical advice relating to almost all nonmanagement organizational activities, including compliance with environmental and workplace safety regulations, the application of technology, and knowledge of sciences such as biology, chemistry, and physics.
Larger consulting firms usually provide expertise in a variety of areas, whereas smaller consulting firms generally specialize in one area of consulting. Administrative management and general management consulting services firms, for example, offer advice on an organization’s day-to-day operations, such as budgeting, asset management, strategic and financial planning, records management, and tax strategy. A manufacturing firm building a new factory might seek the help of consultants to determine in which geographic location it would incur the lowest startup costs. A family opening a new restaurant might hire a consulting firm to help develop a business plan and provide tax advice. Consulting firms also might advise clients in the implementation and use of the latest office technology or computer programs that could increase office productivity. Some clients might turn to consulting firms to manage the financial aspects of their business. Consultants may provide insight into why a division of the company is not profitable or may recommend an investment strategy that meets the client’s needs.
Effective management of a client’s human capital is the primary work of consulting firms that offer human resources consulting services. Firms that focus on this area advise clients on effective personnel policies, employee salaries and benefits, employee recruitment and training, and employee assessment. A client with high employee turnover might seek the help of a consulting firm in improving its retention rate. Consulting firms might also be asked to help determine the appropriate level of employer and employee contributions to health-care and retirement plans. Increasingly, firms are outsourcing, or contracting out, the administrative functions of their human resources division to human resources consulting firms that manage timekeeping and payroll systems and administer employee benefits.
One human resources consulting specialty is executive search consulting or executive recruiting. Firms in this industry are typically referred to as “headhunters.” Executive search consulting firms are involved in locating the best candidates for top-level management and executive positions. Clients hire executive recruiters in order to save time and preserve confidentiality. Executive search firms keep a large database of executives’ resumes and search this database for clients in order to identify candidates who would likely complement the client’s corporate culture and strategic plan. Information on these candidates is then submitted to the clients for their selection. Executive search consulting firms also might conduct prescreening interviews and reference and background checks. Some executive search consulting firms specialize in recruiting for a particular industry or geographic area, while others conduct general searches.
Marketing consulting services firms provide assistance to firms in areas such as developing new products and pricing, forecasting sales, planning and implementing a marketing strategy, and improving customer service. A pharmaceutical firm, for example, might seek advice as to whether it should remove a drug from the market, or a retail clothing chain might seek advice regarding the most effective way to market and sell its clothes-in a direct-mail or online catalog or over the telephone. Clients also might seek the help of a marketing consultant to set up business franchises or license their products.
Another specialty within management consulting is process, physical distribution, and logistics consulting services. Firms in this industry specialize in the production and distribution of goods, from the first stages of securing suppliers to the delivery of finished goods to consumers. Such firms give advice on improvements in the manufacturing process and productivity, product quality control, inventory management, packaging, order processing, the transportation of goods, and materials management and handling. A domestic manufacturing firm might hire a logistics consulting firm to calculate shipping rates and import duties for goods being exported or to determine the most cost-effective method of shipping products. Consulting firms in this industry also advise on the latest technology that links suppliers, producers, and customers together to streamline the manufacturing process. Finally, firms in the industry might suggest improvements to the manufacturing process in order to utilize inputs better, increase productivity, or decrease the amount of excess inventory.
While some management consulting firms specialize in a particular business process, others provide a range of business services specific to one industry, such as health care. Many professionals-for example, doctors-lack the business expertise to manage their practice effectively. Consultants advise these clients regarding the same management issues as they do other businesses, such as staff recruitment, compensation and benefits, asset management, marketing, and other business operations. Some consultants offer advice on matters pertaining directly to the industry in question-for instance, for the healthcare industry, compliance with biohazard removal and patient confidentiality regulations, avoidance of malpractice suits, and methods of dealing with managed care and health insurance companies. Industries such as legal services, telecommunication, and utilities also have consulting firms that specialize in specific issues.
Scientific and technical consulting services firms provide services similar to those offered by management consulting firms, but the information is not management related. One of the largest specialties in scientific and technical consulting services is environmental consulting services. Environmental consulting firms identify and evaluate environmental problems, such as inspecting sites for water contaminants, and offer solutions. Some firms in the industry advise clients about controlling the emissions of environmental pollutants, cleaning up contaminated sites, establishing a recycling program, and complying with government environmental laws and regulations. A real estate developer, for example, might hire an environmental consulting firm to help design and develop property without damaging natural habitats, such as wetlands. A manufacturing or utilities firm might hire environmental consultants to assess whether the firm is meeting government emissions standards, in order to avoid penalties before government regulators inspect the property in question. Finally, many government agencies contract work out to environmental consulting firms to assess environmental contamination in a particular geographic area or to evaluate the costs and benefits of new regulations.
Safety consulting services firms provide services similar to those offered by government agencies and private businesses, identifying workplace safety hazards and ensuring that employers are in compliance with government worker safety regulations. Safety consulting firms might identify hazardous materials that may cause illness or injury, assess safety risks associated with machinery, investigate accidents, and assess the likelihood of lawsuits resulting from safety code violations. Some might specialize in a particular type of hazardous material, while other consultants might specialize in a particular industry’s safety, such as that of construction, mining, or food processing. As with environmental consulting firms, many government agencies contract work out to safety consulting firms for help with safety engineering, technical projects, and various kinds of assessment.
Security consulting, by contrast, seeks to ensure the safety and security of an organization’s physical and human assets that may be threatened by natural or humanmade disasters. Clients might hire security consulting firms to assess a building’s security needs. The firms may then protect the building against theft and vandalism by installing security cameras, hiring security guards, and providing employee background checks. Other security consultants study a building’s design and recommend measures to protect it from damage from fires, tornadoes, floods, earthquakes, or acts of terrorism. Security consultants might also recommend emergency evacuation procedures in the event that these disasters occur. Increasingly, clients are hiring security consulting firms to protect their confidential computer records against hackers and viruses. Most recently, government agencies have hired security consulting firms to advise them on how to protect national monuments and the national transportation, utility, and defense infrastructure-airports, bridges, nuclear reactor plants, water treatment plants, and military barracks-against terrorism.
Scientific and technical consulting firms also advise on a diverse range of issues relating to the physical and social sciences-issues having to with agriculture, biology, chemistry, economics, energy, and physics. Agricultural consulting firms might advise on different farming techniques or machinery that increases agricultural production. Economic consultants might develop forecasting models and advise clients about the potential for a recession or an increase in interest rates that could affect business decisions. Energy consultants might advise clients on how to reduce costs by implementing energy-saving machinery. Finally, biological, chemical, and physics consultants might give theoretical or applied expertise in their chosen field.
Management, scientific, and technical consulting has grown rapidly over the past several decades, with businesses increasingly using consulting services. Using consultants is advantageous because these experts are experienced, are well trained, and keep abreast of the latest technologies, government regulations, and management and production techniques. In addition, consultants are cost effective, because they can be hired temporarily and can perform their duties objectively, free of the influence of company politics.
The vast majority of firms in the management, scientific, and technical consulting industry are small, primarily because new firms can enter the industry quite easily. Licensing, certification, and large capital outlays seldom are necessary for an individual to become a consultant, and the work can be quite lucrative for those with the right education, experience, and contacts. As a result, many wage and salary workers in management, scientific, and technical consulting services eventually leave established firms to go into business for themselves. In addition, after developing specialized expertise, people working in other industries often start their own consulting businesses, and some experienced workers perform consulting work after retiring.
