For several years now, Nexoris has been working with BRAPI, led by Francois Tourrette. BRAPI, short for Benchmark of Procurement Heads for Professional Services, is a key reference in tracking the professional services market. It publishes an annual study on average daily rate (TJM) trends and market evolution, highlighting the rise of new types of players such as adapted-sector companies, Umbrella companies, and intermediation platforms. This year's study notably looks at the impact of the health crisis on the professional services market.
This month, we sat down with Francois to get an overview of the current market segmentation, how it is evolving, and the different layers of professional services covered by market participants. For each type of player, we share insights on the role independent consultants play.
IT Services Companies and Consulting firms
Until a few years ago, professional services delivery relied on two main supplier categories: SSIIs, now known as IT Services Companies, and Consulting firms. They still account for more than 80% of professional services revenue today.
Before the health crisis, these players were growing 5 to 10% per year, fueled by companies' digital transformation. The largest Consulting firms and IT Services Companies were, and still are, on the lookout for external growth through targeted acquisitions.
Freelancers have always partnered as subcontractors with IT Services Companies and Consulting firms, to round out their delivery teams, contribute very specific expertise, or fill in for unavailable resources at IT Services Companies and Consulting firms in tight markets. It is in IT services that the share of independent consultants is the highest.
Platforms and intermediation companies
New players have emerged, however, led by platforms and intermediation companies. The difference between the two? Simply whether they have a platform or not. Year after year, these players are taking market share from both IT Services Companies and Consulting firms. Some are built from scratch around an innovative concept, while others started from an initial business and evolved their service offering with varying degrees of digitalization or even integration into the client-supplier chain. The market offering remains very mixed, both in terms of the kinds of profiles these platforms and intermediation companies specialize in, and the level of service they provide, ranging from simple directories to personalized talent sourcing and Payroll Management Services.
While the health crisis temporarily slowed their progress, it has not stopped them. The BRAPI 2021 study projects 37% revenue growth for these players in 2021, reaching nearly one billion euros.
A significant number of platforms work exclusively with independent consultants and offer engagement opportunities sourced from end clients and/or IT Services Companies and Consulting firms. They are a source of opportunities for freelancers, helping them expand their own network and limit bench periods. These platforms can operate as intermediaries or in pure sourcing mode. In the latter case, the platform does not handle the freelancer's engagement administratively; the freelancer contracts directly with the client. The BRAPI 2021 study details the specifics of these platforms.
Third Parties Umbrella Services, interim management and adapted enterprises
To a lesser extent, other types of players are entering the market. Although some of them have been around for several decades, the number of providers and their volume of activity is growing rapidly: Umbrella companies, interim management firms and adapted enterprises.
Third Parties Umbrella Services, by definition, applies only to freelancers and covers a broad range of professions, in particular all those exercised by salaried consultants at IT Services Companies and Consulting firms. As a reminder, within the Nexoris group, we have built a Third Parties Umbrella Services offering through the Plug&Pay company. It is one of the first companies to have earned the Zero Hidden Fees certification set up by Fedeps, an association advocating for Umbrella employees.
Third Parties Umbrella Services
Companies offering Third Parties Umbrella Services have grown rapidly in recent years, driven by more favorable legislation. The market is made up of several hundred companies, with some hosting just a few dozen freelancers and others hosting up to several thousand. The market is consolidating, historically structured around two trade associations, PEPS and FEPS, which, in response to the growing number of players, are working to create professional standards. Standards or certifications backed by employer representatives now sit alongside the more recent Zero Hidden Fees certification, which originated with FEDEPS, an employee association. The health crisis caused a steep drop in business in this sector, on the order of 20%, with the players most exposed to training services being the most affected.
Interim management
The interim management market is not easy to assess. Historically, the engagements assigned to these players have involved temporary replacements at the executive level or executive missions tied to a specific objective (workforce restructuring plans, etc.). In recent years, interim management firms have gradually moved towards more operational engagements, mostly in IT. Where they used to not compete with Consulting firms and IT Services Companies, they may begin to in some areas.
Several models exist in interim management, with some firms working exclusively with salaried staff and others collaborating with independent consultants, whether they operate on their own or under Third Parties Umbrella Services.
Adapted enterprises
Created in 2005, adapted enterprises help people with disabilities access employment in conditions suited to their abilities. They support them in their professional development and can serve as a bridge to other private and public-sector employers. The market for adapted enterprises in professional services is still relatively young and is concentrated around about ten players. A type of offering that is struggling to gain traction despite the benefits buyers stand to gain by using it.
Here too, some of these companies work exclusively with salaried staff, while others also engage independent consultants.
To make sense of who does what, here is an overview table that maps supplier types to the kinds of services they typically deliver.
