The HR consulting market will continue to grow throughout 2008, with strong demand in each of the main HR consulting subsegments -- Benefits consulting, HR technology advisory, and Talent management consulting -- showing notable advances, according to a comprehensive  report by Kennedy Information.

Kennedy Information's HR Consulting Maketplace 2007-2011: Key Trends, Profiles and Forecasts features detailed information and analysis on the global HR consulting marketplace. Based on extensive interviews, data collection, and background research, the report reveals that global growth ambitions are driving HR consultancies to expand new service capabilities.  Overall, a back-to-business mentality of growing the core business - organically and through smart incremental acquisitions - is propelling our industry.

The HR Consulting Landscape

Benefits Consulting
Starting in mid-2006, a number of market changes began to drive the demand for benefits consulting services. Foremost among these changes in the U.S. was the enactment of the Pension Protection Act; the US Circuit Court of Appeals' Cooper decision; and the Financial Accounting Standards Board revision of its accounting procedures for retirement benefits plans.  The resolution of these issues drove companies to understand the impact changes would have on their retirement plans. Demand for HR firms' investment consulting services also grew as a result of clients' review of new liabilities, strategic asset allocation, and investment manager selection.

Healthcare Consulting
Greater client demand for new and innovative employee healthcare strategies and solutions continued in the past year but some healthcare consulting practices experienced growth while others remained fairly flat. Firms' communications-related HR consulting also benefitted from 1) the market changes affecting retirement and healthcare consumerism in general and 2) consumer-directed health plan sponsors, communicating with employees about the specifics of the plan.

Technology and Talent Management
Increased demand for consulting that is related to two other major subsegments was tracked b y Kennedy Information.  These were HR Technology Advisory and Talent Management Consulting -- and both were largely driven by clients going through post-merger transformation  efforts and increased challenges in attracting and retaining their workforce. In the broad talent management category, many HR consulting practices with services targeting the top echelons of client organizations -- services including leadership development, executive compensation, organization design and HR strategy -- have done exceedingly well.

HR Transformation Services
Meanwhile HR Transformation Services are experiencing higher demand. These services include HR process-related consulting flowing from technology driven initiatives to transform HR department service delivery. And, there is continued need for change management consulting in connection with HR transformation to support managing client businesses globally as well as to foster business growth and innovation (particularly with US clients).  Much of this activity is in connection with the sizable number of M&A transactions in recent years.

Key Market Trends

What are the key trends forecasted by the research?There are several, but let me summarize three.

Globalization
From a macro-economic perspective, globalization is a key driver for much of HR consulting. As leading multinationals continue their expansion, they  will seek efficiencies by standardizing their global HR policies in as many areas as possible.

The Need to Attract and Retain Talent
Client spending on talent management applications, either integrated in a suite or standalone, remains high. HR consultants and organization development firms are bolstering the technology side of their talent management practices. Many are integrating their performance measurement applications with compensation management or acquiring smaller "best of breed" technology companies.  Spending on employee engagement is high -- especially in Europe;  spending on leadership development in the US, UK, and China is strong and some consulting firms are having a hard time keeping up with demand. Finally, in the US public sector, local, state and federal agencies are looking for innovative ways to recruit, retain and reward their employees, which is driving consulting work to a variety of government types.

Growth Opportunities
Synthesizing the report, many opportunities exist for well-positioned HR consultants across numerous client market subsegments. These include: Benefits consulting, Investment consulting, Healthcare consulting, HR technology consulting, Design and development of HR service delivery models, Talent management and Outsourcing.  

These are productive years for HR specialists and generalists and HR OptIn is here to help you seize upon and make the most of every one of your options.