The services sector has been the main engine of growth for the UK economy for the past two decades but now it is at the beck and call of a decade of disruption. Brexit, the accelerating impact of a tidal wave of economic, technological and social change will challenge this status quo. Novello Search works with some of the leading organisations and CEOs and CFOs who will shape the future of this sector.
Subsectors we can supply in:
- Transport & Logistics
- Travel & Hospitality Business Services
- Real Estate Services
- Professional Services
How we see the future for the services sector
As global economic power gravitates towards the east, the current trading patterns will change and urban centres of major emerging markets will be the driving force of the world economy. Brexit will also create predictable uncertainty and the UK may face a decade of sluggish growth.
In the UK services sector, most commentators expect Education and Healthcare to add over 1 million jobs by 2030, business services around 1.5 million, and the creative services sector to add 1 million jobs.
This sector is so broad that it would be a bold task to predict the future in every corner, so we have singled out how we see the future for professional services, where we believe the following will hold true:
Offshoring is here to stay
The era of offshoring will continue as competitive pricing erodes margins and the pressure to keep costs down continues to grow – we have even noticed a growing trend to offshore the CFO role. That approach is risky and has its obvious downsides.
Cloud Accounting will eventually be the norm with pretty much everything transactional being fully automated by 2030 – this will drive improved efficiency, cheaper operating costs and mobility but will not be good for everyone in accounting as AI will take over MI reporting and interpretation, too.
Automation leading to diversification
Accountancy firms will become ever more reliant on generating revenue streams through business advisory services as everything becomes automated via cloud services. The outcome of this will be that clients become more transient with the ability to port their accounts to new suppliers by giving them their passwords. Before this was more complex as everything was stored on a hard drive.
IT to change the legal services sector
Law Firms can’t escape the technological landscape either as a 2017 report suggested. It is thought that around 100,000 jobs within the legal sector will become automated in the next two decades, as technology transforms the profession.
More complex demands from clients and the Millennial generation entering the workplace will change the skill-sets sought by legal firms, with a report by Accountancy Practice earmarking 2020 as the tipping point for the legal sector.
Around 31,000 jobs have already been lost to technological advances, according to the report, including roles such as legal secretaries. A further 39% of legal jobs are classed as ‘high risk’ when it comes to automation, with many people in danger of redundancy in the next twenty years.
A major period of law firm consolidation lasting to 2030
The gap between successful and struggling law firms will widen as those at the bottom fail to invest in technological infrastructure, leading to greater consolidation at a faster pace.
Further niching to chase improvements on the bottom line
Law firms, management consultancy firms and accountancy firms will all need to carve out very specific niches if they wish to remain profitable.