The nation is rebounding pretty well from the last recession and positive employment rates support that notion. According to Crain’s Chicago Business, the Windy City’s economy is charging ahead, especially in the professional and business services sector.
In fact, recent figures showed that a huge number of new jobs in Illinois reflected an increase in employment in professions such as auditing, consulting and architecture. What’s this sector all about, and how does it fit into the Chicago Metro? We’ll discuss.
What is the professional and business services sector?
According to globalEDGE, the professional and business services industry is exactly what it sounds like: these are companies that provide business-related services to fellow companies. Companies in this industry offer a variety of services, including marketing, advertising, consulting, legal services, logistics and shipping, human resources, staffing, leasing, security, outsourcing, and facility management.
This industry is highly fragmented, meaning that the industry is divided among many different companies, and no one firm has a large enough chunk of the market to be able to influence the industry’s direction or price levels.
How’s the sector look in the Chicago Metro?
According to World Business Chicago, Chicago ranks third in the country in business services sector jobs, especially specializing in advertising agencies, marketing consulting, and administrative management. In 2015, 726,629 folks were employed by 57,205 different companies, producing a gross regional product of $86.5 billion in the Chicago business services sector.
The top employers in the business service industry of Chicago are Deloitte (4,339 employees), Mayer Brown (3,431 employees), Aon Hewitt (3,331 employees), KPMG (2,126 employees), Leo Burnett (1,842 employees), PricewaterhouseCoopers (1,750 employees), Ernst & Young (1,500 employees), ADP (1,500 employees).
Four of these companies are known as the “Big Four.” Made up of Deloitte, KPMG, PricewaterhouseCoopers (PwC) and Ernst & Young, these four professional services networks collectively offer more auditing, assurance, tax, consulting, advisory, actuarial, corporate finance, and legal services than other businesses in the sector.
Here’s some more info on the Big Four:
- Deloitte (4,339 employees in Chicago) – Deloitte is the second largest professional services network in the world by revenue and the largest by the number of professionals. Deloitte provides audit, tax, consulting, enterprise risk and financial advisory services with more than 225,400 professionals globally.
- KPMG (2,126 employees in Chicago) – KPMG employs 174,000 people worldwide and has three lines of services: audit, tax, and advisory. Its tax and advisory services are further divided into various service groups.
- PricewaterhouseCoopers (1,750 employees in Chicago) – PwC is a network of firms in 157 countries, 756 locations, and with more than 208,100 people. Vault Accounting 50 ranked PwC as the most prestigious accounting firm in the world for seven consecutive years and top firm to work for in North America for three consecutive years. According to PcW, the company’s global revenues were $35.4 billion in FY 2015, of which $15.2 billion was generated by its Assurance practice, $8.9 billion by its Tax practice and $11.3 billion by its Advisory practice.
- Ernst & Young (1,500 employees in Chicago) – This organization employs 212,000 people in more than 700 offices around 150 countries in the world. Ernst & Young provides assurance (including financial audit), tax, consulting and advisory services to companies.
Crain’s Chicago Business recently highlighted the growth at Big Four offices in Chicago.
Chicago headcount at the Big Four accounting firms leapt by as much as 13 percent for the year ended in June and by bigger percentages at some smaller accounting firms. Though growth is across the board—auditing, tax and consulting—demand for consultants in those firms is “ridiculous,” says Ron Watkins, assistant dean of the U of I’s College of Business.
Besides a slow but steady economic recovery, factors driving white-collar employment are compliance demands sparked by such legislation as the Affordable Care Act; upgrades of technology systems; and the continuing “profit improvement” push to eliminate production costs. In addition, Ms. Bird cites demand from more companies moving or consolidating here and from manufacturers (despite a loss of 3,700 factory sector jobs statewide over the last year).
Kim Simios, Chicago office managing partner at Ernst & Young LLP, draws a link between the low-gear recovery and strong demand for advisory services provided by her Big Four audit firm. Clients, at last, she says, are investing in new technology, supply-chain improvements and other capital outlays. They’re also pursuing initial public offerings, mergers and acquisitions and divestitures.
“All these large events these companies are doing have served us well,” she says. “They spin a lot of work out of these. It’s all feeding each other.”
E&Y’s Chicago office headcount is up 28 percent in the 24 months ended in June.
Many MBA degree recipients are getting these jobs, as outlined by Business Because:
Business services are motoring back to growth. The US economy has roared back into rude health, and as profit margins expand job prospects are tantalizingly high in some sectors.
Behind the headlines of potential rate rises and falling unemployment, senior positions are being posted in traditionally lucrative sectors of MBA recruitment.
Almost all of the US’ jobs growth came from the private services sector. Business services added 47,000 new positions in July. The robust jobs market figures reflect the sixth consecutive month of growth above 200,000.
What’s next for this industry?
Stats from World Business Chicago outlined the fastest growing business services sub-sectors. The top four emerging sub-industries are computer systems designs (10,869 new jobs 2005-2015); custom computer programming (11,102 new jobs 2005-2015); marketing consultant services (5,764 new jobs 2005-2015); internet publishing (6,441 new jobs 2005-2015).