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Consultants shed 11,000 jobs as recession bites

Civil engineering consultants have shed more than 11,000 staff in the last 12 months, NCE can exclusively reveal.

Figures supplied for NCE’s Consultants File 2010 show that overall employment in the industry has fallen by 7.4% from 151,400 in January 2009 to 140,200 in January 2010.

The findings are based on a comparison of the figures of the 200 firms listed in this year’s File who also appeared last year. In total 242 firms are listed in this year’s File.

Redundancies were most prevalent amongst the large firms with 73% of those with 1,000 employees or more making cuts.

This compares with 70% of those with between 101 and 1,000 employees, 47% of those employing between 26 and 100 and just 41% of the small firms with 25 and fewer employees.

In total 47% of firms also implemented wage freezes as a means of controlling costs.

More than half of firms have also resorted to cutting fees or working for reduced margins.

Large firms – those employing 1,000 or more – were least likely to have cut their rates, with 47% admitting to taking that approach.

By contrast 71% of firms employing less than 25 people cut their rates.

Overseas work accounted for 32% of the revenue of the 242 consultants in the File, with £5.3bn of the £16.2bn total turnover now earned overseas.

Compared with the previous year 37% of firms saw overall turnover increase, 36% saw it fall and 26% saw it broadly stay the same.

Fee income for the 2009 calendar year followed a similar pattern with 32% of firms reporting an increase, 42% a decrease and 26% little change. Overall, fee income was up from £10.3bn to £12.9bn, although this includes £1bn from the global figures of Parsons Brinckerhoff. These are included this year because the consultant is now owned by the UK-registered Balfour Beatty.

The expectation is for 2010 to be another tough year, with 38% of firms expecting an improvement in the UK, 51% no change and 11% a decline in UK workload.

The overseas market is expected to fare better, with just 3% of firms expecting a decline in Europe and 7% a decline in the rest of the world.

Those active in the energy and environment sectors are the most optimistic.

“The immediate future looks difficult for engineering consultants working in the UK and abroad,” said Imperial College Business School professor of design and innovation Bruce Tether.

“Last year was evidently a very tough year for many - although not all - in engineering consulting.  Many thousands of people have lost their jobs; others are having to work harder for less.

“This year does not look very promising. For most, I suspect, it will be a year to survive,” he said.

The five biggest sectors for civil engineering consultancy all grew last year, albeit slowly.

 Fee income in roads grew from £1.4bn to £1.8bn, in rail from £1.1bn to £1.2bn, in building from £2.6bn to £2.7bn, in environment from £715M to £931M and in water from £818M to £884M.

Information is based on the results of a survey of 242 firms conducted by NCE in January 2010. Statistics are for UK registered companies operating at home and abroad. Turnover figures are to the year end for which figures are available. Fees are for the total value of fees rendered in the 2009 calendar year and may be a best estimate if final figures were not available.

Readers' comments (5)

  • It would be interesting to know how many of the reported 11,000 jobs have been moved abroad in the quest for higher profit margins and for 'getting more from less'.

    Also it would be helpful to hear from the ICE their views on this issue which is directly impacting a large part of the ICE membership, as well as also significantly reducing their revenue.
    This situation will get much worse once the promised public expenditure cuts, which are likely to be focussed on capital expenditure initially and then be followed by redundancies in the public sector, are made.

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  • Cutting margins is no remedy and moving jobs overseas is of no benefit to the UK - the ICE's prime responsibility to the country and for the vast majority of its members.

    Those consultants/contractors who succeed should be those who can earn higher margins by providing better, more overall cost and performance efficient Designs and Project Management which provide very significant and identifiable cost benefits to Clients; not those who can increase turnover but with lower margins and lower unit costs - and hence lower salaries.

    Its about time the ICE provided a service to their members similar to the BMA for the doctors and assisted in selling to the Government and other Cl;ients not cost leadership cheapest fees but Clients' cost and performance benefits .

    Only then will we prosper and not be treated on a par with plumbers and electricians!

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  • I assume that such reductions in fee-earning staff are accompanied by corresponding cuts in non-fee earning departments such as "human resources"?

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  • Milind Jamble

    In this time of recession when Client require Cost effective solution with their budget cut downs, the international firms should take advantage of outsourcing the jobs to transfer the benefits to end client without compromising on the quality.

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  • Dear Milind Jamble
    You are quiet right, firms should be able to transfer end benefits to the client, but how do you define these "benefits"? Are they social? economical? sustainable?
    On some projects we have clients, consultants and contractors working in the same office and still face many probelms when it comes to executing and implementing the work. It is already difficult to maintain proper communication between different parties. It would be interesting to have some case studies and see how outsourcing is actually benefiting the client.

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