Support Services is proving to be relatively robust in the face of the recession as long term contracts and stable cash flows provide a bulwark against changing consumer demand. There may also be further opportunities for the sector as companies look to reduce their cost base by outsourcing their non core functions. They will however expect keener pricing, which could further reduce already low margins for the industry.
The UK professional services market is undergoing a period of liberalisation and change, driven by new regulations and Government policy which demands greater industry transparency. Value for money and new initiatives are driving changes in the delivery of legal services resulting in new thinking, innovation, and a focus on infrastructure, assets and people.
The recruitment market is suffering as companies are laying people off instead of recruiting, reducing their revenues. There are opportunities to diversify into outplacement services, but these do not fill the revenue gap. The industry must reduce its costs as the key lever to maintaining profitability.
KPMG's 'Focus Five' propositions address the key challenges that these sectors face.