• The consulting sector has become a central part of the media conversation around Brexit, as companies and the government have found themselves in a dire need of external expertise.
  • EY dominated the recent media discussion, followed by Capital Economics, Deloitte and KPMG.
  • EY’s economist Howard Archer was the most often quoted spokesperson, followed by Samuel Tombs of Pantheon Macroeconomics.
  • Reuters, The Guardian, Financial Times and New York Times were the publications focusing on consulting firms in their Brexit coverage.

Unlike many sectors of the UK economy, which have stalled because of Brexit-related anxieties, the management consulting sector expanded at its second-fastest rate in a decade last year. Government departments and corporations have sought the help of consultants as the many unknowns surrounding the UK’s prolonged exit from the EU have led to an unprecedented workload.

The Management Consultancy Association, which exists primarily to enhance the reputation of the industry, recently released its annual report, which revealed that total fees across the UK consulting industry rose by 7% to £10.6 billion in 2018. Since 2016, when the Brexit bomb was dropped, the income from public sector consulting has risen by 12%, accounting for more than a fifth of income in the sector. Moreover, the troubled pound has made consulting services more appealing to foreign clients and 20% of UK consultancy income came from overseas.

As a result, management consultancies have often been actively involved in the frenetic media conversation around Brexit. As the media remains hungry for Brexit story ideas, with most UK newspapers having special teams specifically covering the UK-UK relationship, the cross-industry expertise of consultancies has secured them a crucial role in shaping the debate.

Brexit has led to some communication conundrums for UK professional service providers – as the uncertain business climate brought about by the vote persists, they should be able to present themselves as competent enough and in a position to advise their clients on a situation full of economic and legal puzzles.

At the same time, Brexit has created a good branding opportunity: offering thought leadership or sharing a vision about an impending event with unclear economic consequences is always an effective way to boost one’s reputation.

Some firms convey a sense of expertise by putting together dedicated Brexit teams, with job titles such as “Head of Brexit” now being standard at most major management consultancies. For instance, KPMG appointed a “Head of Brexit” less than two weeks after the 2016 referendum.

The communication strategy of many of these Brexit departments includes publicising reports and sentiment surveys, which usually highlight the need for expert Brexit advice. Most firms also have Brexit sections on their websites, which include thought leadership articles, checklists and timetable countdowns. EY, for example, publishes a monthly briefing on Brexit developments called Brexit Watch.

Specialist skills

The recent media discussion has taken a particularly political angle, especially since the National Audit Office revealed that the government has spent “at least” £97 million for external help for Brexit-related tasks. The government has defended the spending, telling the BBC that it was “often more cost-efficient to draw upon the advice of external specialists for short-term projects requiring specialist skills.”

The media has played an active role in investigating the government’s spending on professional services. In April, Sky News revealed that the government had quietly awarded £75m of Brexit-related contracts to some of the world’s biggest consultancy firms. In February, an analysis for the BBC found the government had signed contracts worth £104 million for Brexit-related advisory services.

This was met with a fair share of criticism – for instance, the FDA, the UK’s professional association for civil servants, called the sum “eyewatering” and said it was “no surprise following almost a decade of austerity that has seen the civil service shrink by almost a quarter”.

Most media outlets cited the government’s defence of that spending, which inadvertently bolstered the consulting industry’s reputation – government officials presented external specialists as much-needed experts whose knowledge and experience is a vital part of the Brexit preparation process.

On the other hand, this level of involvement in the Brexit process has created additional communications hurdles for consultancies: in their commentary and thought leadership, they are being very careful about criticising the government for fear of jeopardising their Brexit-related work.

EY’s dominance

Analysing the Brexit media discussion in the top-tier English-language publications from October 2018 to August 2019, we found that EY was the most often mentioned consultancy:

EY was among the six consultancies scooping up 96% of Brexit government contracts, alongside Deloitte, PA Consulting, PwC, Bain & Company and Boston Consulting Group. Of these firms, Deloitte was top, accounting for 22% of all Brexit consultancy spending.

But EY secured its prominence in the media discussion mainly with its research and survey results which served as coverage drivers for a number of Brexit-related news stories.

The top-trending stories relating to EY‘s research involved the financial industry, which has had a special place in the UK, whose economy is more reliant on the service sector than any of its G7 counterparts (services secure around 80% of the country’s GDP) and whose capital is often dubbed the world’s most important financial centre.

As the Economist put it, London’s reign as the world’s capital of capital is at risk as the government is determined to pull the country out of the world’s largest single market, where the UK is currently an undisputed leader not only in wholesale financial services but also in most subsets of the industry – for instance, the UK holds a 17% market share in cross-border bank lending, while France and Germany each have 9%.

Britain also presides over the world’s foreign currency trading, and this came as a result of the EU single market and the arrival of the euro: one of London’s main money-spinners has been trading trillions of euros in derivatives.

For more on banking and Brexit, read our analysis “Brexit in the Media: How Banks Gain Shares in the Brexit Coverage”.

Given the media’s interest in the UK’s financial industry, a number of outlets picked up on EY‘s work in this context. For instance, a popular story was that EY found banks in Britain are restarting preparations for a no-deal Brexit after a quiet period in the shift of financial services jobs and capital from the UK and the EU in the past few months.

An often-cited figure was the EY’s Brexit Tracker of public announcements from 222 of the largest financial services firms in the three months ending May 31, which found that the 7,000 planned job and a trillion pounds in capital relocation to new EU hubs was little changed from the prior quarter.

Another popular story was that a survey by EY concluded that although the majority of financial services firms are expecting another extension to the Brexit deadline after October 31st, the threat of no-deal is being taken increasingly seriously and plans to leave the UK are being strategised. EY reported that assets worth nearly 800 billion pounds are being moved from Britain to new financial hubs in the EU ahead of Brexit.

The firm was also in the spotlight for finding that foreign direct investment into Britain is already plunging, a trend that will continue after Brexit. Although London received the most foreign investment in financial services among European cities, last year, EY revealed that the outlook for the capital has fallen to an all-time low due to Brexit.

Mounting worries

Smaller and more specialised economic research consultancies such as Capital Economics, Pantheon Macroeconomics and Oxford Economics also played a considerable role in the debate, as the media went beyond the Big Four to get opinions and forecasts.

London-based Capital Economics, whose communications strategy includes a “Brexit watch” service, followed EY by number of mentions for calculating the fall of the pound if investors fully priced in a no-deal Brexit, but there were risks that it could fall more.

The firm also commented on the stimulus options to help the shaking economy: it suggested that a double-barrelled stimulus boost from interest rate cuts alongside tax cuts and higher spending could lead to a quick recovery.

Meanwhile, Deloitte has warned that worries over the long-term impact of Brexit are mounting, with more than half of finance bosses expecting to curb recruitment and spending. Its latest quarterly survey of chief financial officers concluded that only 13% were more optimistic about the prospects for their company than they were three months ago.

KPMG said that UK retail sales experienced their “worst June on record”, as uncertainty over Brexit continued to affect the economy. It also warned that the London insurance market faces a huge skills shortage as it lags behind other sectors in adopting new technology, with Brexit adding to hiring difficulties.

PwC‘s presence in Brexit reports was in part due to turning its Charing Cross office to a stage of Theresa May’s speeches. Apart from that, it was often mentioned for showing that a typical bank in London has a higher tax burden than in rival international financial centres such as New York and Frankfurt, suggesting that Britain risks driving banks overseas if current high levels of taxation on the industry are maintained after Brexit.

Predictions and forecasts

The dominance of EY was also due to the number of corporate spokespeople quoted in the media discussion around Brexit.

Howard Archer, chief economic adviser at the economic forecasting group EY ITEM Club, was regularly quoted for making GDP growth predictions. Recently, he was cited for saying that the highly uncertain outlook for Brexit means that it is currently impossible to formulate any central forecast for the UK economy with any genuine confidence, with this uncertainty also meaning that many companies have preferred to take on labour rather than commit to costly investment.

His colleague Omar Ali, UK financial services leader at EY, said he had seen some companies restarting their relocation programmes over the last few weeks and expected activity to pick up “markedly” over the course of summer as the new Brexit deadline looms. According to him, the relocation of high-paid finance jobs will inevitably hit the UK tax base and the direct loss to the Exchequer from employment taxes would be high.

Samuel Tombs, chief UK economist at the economic research consultancy Pantheon Macroeconomics, featured in more consumer-centred stories for suggesting that June’s retail sales figures are a timely reminder that consumers aren’t being haunted by the possibility of a no-deal Brexit but are happy to spend the proceeds from rising growth in the real wages.

He also commented on The IHS Markit/CIPS construction Purchasing Managers’ Index (PMI), which plunged to the lowest reading since 2009, saying that this was a worrying sign that the damage wrought by Brexit uncertainty is building.

Thought leadership and Influencer Network Analysis

The Brexit uncertainty has provided a new context for consultancies to position themselves as thought leaders – they have managed to earn their share of voice in the cacophony of the often heated debate by converting complex information into concise, authoritative opinion.

As there are many questions left unanswered about the big picture changes, consultancies are lacking many practical details, but this can create opportunities for those prepared to make bold scenario-planning – despite the many variables in play, consultants can position themselves as trusted advisers by demonstrating a firm grasp of the issues facing their clients and by proposing practical solutions.

According to research by branding firm Hinge, increasing brand visibility is a top priority for management consultancies and is achieved through accessible, widely available thought leadership content and through improving the visibility of experts within the firm, building the credibility of the brand through a “halo” effect.

This priority has also been highlighted by academic research suggesting that the main drivers of competitiveness in the consulting market are neither price nor measurable quality, but rather trust and reputation.

The situation consultancies are facing with Brexit could give valuable lessons for corporate communications in any business climate full of unknowns. PR has always been a very adaptable profession, and when there is such an ongoing uncertainty, strategic PR becomes an ever more important tool for communications to target client base and referral networks.

In this regard, by promoting their thought leadership, the most influential consultancies in the Brexit conversation are well-positioned to further their corporate reputations and expand their client bases.

However, the main problem with thought leadership strategies is how to evaluate their effectiveness and ascertain if they are moving the needle. Using Influencer Network Analysis to measure the effectiveness of management consultancies’ thought leadership efforts provides an actionable and highly targeted approach to managing their positioning strategies in times of information overload and content saturation.

Do you want to learn more about how we use Influencer Network Analysis to identify the most influential management consultancies around Brexit?

Download the 5-page report by Commetric and learn how Influencer Network Analysis can be used to measure the effectiveness of thought leadership strategies.

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Using Influencer Network Analysis for Measuring Thought Leadership: The Case of Management Consultancies and Brexit

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