The Impact of Economic Factors on the Consulting Market

Chad Oakley,  CEO of  Charles Aris, a second-generation executive search firm, discusses their 55-year history and their focus on four areas. Charles Aris specializes in strategy and go-to-market practice, which places individuals into corporations, private equity firms, and portfolio companies. Chad explains their areas of expertise and mentions that the firm has a team of over 100 and has completed over 1,450 positions in this area in the last 21 years. They also have a finance and corporate development practice, which handles CFOs, FPAs, and candidates for merger and acquisition roles. Additionally, they have an engineering and operations practice that handles supply chain, CFO, and plant managers.

The Changing Market for Consultants

Chad, a former consultant, discusses the changing market for consulting in the age of uncertainty, and what the market is looking for. He traces back to April 2024, when consulting in the United States was down, particularly for top firms like Bain, BCG, McKinsey Strategy, and L.E.K EY Parthenon. The downturn was driven by higher interest rates and inflation. Chad talks about the factors leading to high interest rates and how it impacted consulting firms, private equity firms and M&A activity. He touches on how consulting firms reacted to this downturn and how it affected consultants. Chad shares a 2025 Compensation study conducted by Charles Aris showing a range of data that covers undergrads and MBAs, major consulting firms and competitors. He then shares three primary factors that caused a rise in the market in January 2025.  The market is now looking for new opportunities and challenges. 

Key Factors Leading to Market Change for Consultants

Chad explains the factors that led to the changes in the market over the past year. The newly elected President, Trump, was bullish on business, promising to rally markets better than Biden and eliminate red tape and regulations. This positive outlook led to a more optimistic outlook for the market. Business is recovering, creating solid momentum in the economy. In Q1 2024, companies started investing and private equity firms resumed deals, resulting in stronger demand for consulting services. However, the implementation of tariffs by the President has arrested this momentum, creating uncertainty for business leaders. The current tariffs have no playbook for them, and the possibility of changes in the future makes it difficult for current CEOs or business leadership teams to commit to action.  Chad shares a conversation he had with the CEO of a publicly traded manufacturing company CEO, who has manufacturing facilities in the US, China, and South America. He cannot justify the massive investment in onshore manufacturing due to the potential decrease in tariffs. This has halted deal momentum, particularly in consulting services. Despite this, consulting firms are still working on projects they sold in the first few months of the year. They are now trying to be strategic about their consulting services, focusing on key areas to win and play in the market.

The Number One Area of Focus for Consulting Firms. 

Chad explains that consulting firms are trying to be strategic in their direction, which has led to a focus on supply chain consulting. Companies are trying to navigate the impact of tariffs on their supply chains, and consulting firms are helping them do so by reshuffling their manufacturing base from high tariff countries to low tariff countries. They are also helping clients re-negotiate procurement contracts with global suppliers and consider acquiring competitors with a more favorable supply chain structure. Consulting firms are gearing up for a bulk of demand for supply chain services, and focusing on blue and white collar services. They are also doubling down on consulting playbooks for their services, including blue and white collar services, which is also a major area of focus for private equity firms. Consulting firms are also looking at government advocacy, such as lobbying and creating influence with lawmakers.

The Impact of AI on Consulting Firms

Chad discusses the significant impact of AI on consulting services. He mentions that many successful big brand companies are utilizing AI in their operations. A private equity firm's head of AI stated that the impact of AI is expected to be minimal in the next 18 months, as companies are still trying to find ways to add value with the technology. Chad acknowledges that AI is an incredible tool, and that it will be interesting to see how much it will truly change the way businesses operate in the next 12-18 months.

A Growing Trend of Interim Consulting Roles

Chad talks about the growth in what they call interim executive hiring in the marketplace, specifically around private equity and mostly for a limited period of time. The primary areas hiring for these roles are finance and strategy. He explains that specificity is highly sought after, and he encourages generalists to narrow their scope. The conversation turns to the structure of executive search firms for P.E. firms. Chad states that there are two primary groups within PE firms: the Deal team, and the Portfolio Operations team. He explains how they function and how they find and recruit talent. He offers advice on how to reach out to the hiring team, and talks about reaching out to consulting firms for a position and which areas of service have seen a decline and which ones are in demand. He specifically mentions pricing as an area of demand due to the tariffs. 

Key Questions Answered in the Q&A Session 

Chad answers questions from the panel, including his recommendations on the path to a private equity operating partner, areas of experience that are highly valued; the impact of DOGE on consulting, how independent consultants can position themselves for a full-time position; the value of demonstrable startup experience, AI displacing junior roles; recruiting for board roles, PE’s interests in blue collar and white collar companies; and a positive outlook for mature consultants.

Timestamps:

02:50 Overview of Charles Aris and Chad Oakley's Background 

08:11: Market Overview and Impact of AI 

11:28: Current Market Conditions and Consulting Services 

16:08: Trends in Full-Time Roles and Interim Executive Hiring 

22:49: Consulting Firm Hiring and AI Impact 

28:00: The areas of decline and demand for consulting services 

42:13: Path to Private Equity Operating Partner Roles 

49:54: Impact of Government Consulting Contracts on the Market 

52:24: Tips for Independent Consultants Seeking Full-Time Roles 

Links:

Website: https://charlesaris.com/

Unleashed is produced by Umbrex, which has a mission of connecting independent management consultants with one another, creating opportunities for members to meet, build relationships, and share lessons learned. Learn more at www.umbrex.com.