What Does Consulting Do?
- Francois R Bosse, CMC
- 10 hours ago
- 1 min read
A recently published paper (not peer-reviewed) by the US National Bureau of Economic Research, a not-for profit organization based in Massachusetts founded in 1921, was hoping to answer that exact question in 2025. The research conducted in Belgium offers great insights and we have extracted what we believe are the most interesting findings:
That the average contract term is 1.6 years.
They found that annual spending is 1 to 4% of annual payroll.
In terms of total factor productivity (TFP), they found U-shaped patterns which means highly productive and very unproductive large firms taking up consulting. This pattern is also similar in terms of profitability.
That "consulting tends to be viewed as one monolithic thing, with an overemphasis on cost cutting". However, most consultants have stated having more commonly worked on growth strategy than cost cutting.
We also found an interesting conclusion:
The recommendations from consultants are often not unique viewpoints that no internal staff has ever thought about. What consultants can help is to surface these viewpoints to the decision makers in a coherent way, which allows decisions to be made.
Overall, the research found that consulting was more in line with a productivity-enhancing view than that of institutions focused on reallocation of resources.
Photo credit: MyConsultingOffer.org
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