Poor market conditions have led to eight redundancies at KPMG’s Sustainability Advisory Services (SAS) group, which gives advice to companies on corporate social responsibility.
KPMG says the UK-based SAS group had to lay off the staff – mainly technical specialists – because of ‘lower than expected market demand’ in recent times.
However, it says it will continue to offer a full range of services, including verification, to existing and future clients. SAS, now with 30 staff, is still headed by Alun Bowen.
KPMG’s recent cutbacks are thought to be the heaviest made in the sector by any of the big four consulting firms.
With PricewaterhouseCoopers, it has bid for a large share of the CSR consultancy market since launching SAS five years ago. However, although the large professional services firms have won some big clients, they have not reaped the returns they may have expected.
‘Consulting generally, not just CSR consulting, is under a lot of pressure,’ said Seb Beloe, director of research and advocacy at SustainAbility, a medium-sized CSR consultancy based in the UK and US. ‘On the other hand, in the CSR consulting world we might have expected things to be even tougher than they have been. People were saying companies would cut back on CSR, but until now that hasn’t really happened.
‘We have certainly seen some stagnation after a good year in 2001, and although this year is looking slightly better for us, it is still a tough environment,’ he said. ‘The main corporates have committed enough to CSR that they can’t, and don’t want to, withdraw at this stage – so there is still business out there. But CSR hasn’t taken off in the wider business community to the extent that people had hoped.’
Beloe added that the CSR consultancy market seemed to favour smaller firms, which were able to charge less because their overheads were lower. ‘PwC and KPMG have invested more, but there are lots of niche players who seem to be surviving and doing reasonably well’.
Hilary Sutcliffe, who runs the niche UK-based Shared View consultancy, said: ‘Firms like KPMG have big pockets but they’ve also got big expectations, which is partly why things are not going for them as they would have hoped.
‘The market is not buoyant and seems to be better for small firms at the moment. I also think the CSR world quite likes the idea of using smaller consultants with a bit of a new age feel’.
KPMG said the changes would not significantly affect its service. ‘Unfortunately we have had to make eight people redundant, but there’s no major refocusing, and we are still offering advice on all the areas we have traditionally covered,’ said a spokeswoman.
However, she added that ‘if there’s one area where we have reined back on, it’s the CSR advisory area, because we were slightly ahead of the curve and market demand for those advisory services has been lower than expected.
‘We still have a lot of experts in that area, but we have had to re-plan in line with what the market has been delivering’, she added.