2024 Outlook: Business and Professional Services

2024 Outlook: Business and Professional Services

In ‘case’ you missed it. The year ahead.

See the big picture

This is a strong sector with many successful businesses and there's a lot to be positive about, but the macroeconomics mean 2024 will be a harder year that will test firms’ resilience, so they’ll need to stick firmly to their guiding principles.

James Morris

Head of Business & Professional Services, Barclays Corporate Banking

Getting to grips with AI

Digital transformation will once again be a hugely important issue to address for business leaders across this sector in 2024. I expect firms to continue to look to technologies that help to automate their processes, which should of course drive efficiencies and give employees more time to bring their expertise and experience to the services they provide to clients.

With the spotlight now on artificial intelligence (AI), many of the firms we talk to are very much in a test-and-learn phase with the deployment of AI and those with available resources will continue to invest in and experiment with it. But it’s important that firms understand both the potential benefits and risks of AI – the big threat being around protecting client data. With so much of the way businesses work now dependent on all forms of digitalisation, it’s alarming that we’ve seen ever-more sophisticated cyber-crime, including data breaches and fraud, on the increase in the sector over the past 12 months. I urge all our clients to remain super-vigilant.

Confronting the social mobility barrier

What’s most important in the business and professional services sector is of course human capital. As we all know, service is about people – their knowledge, skills and how they interact with clients – so attracting and retaining the best people is the number one priority. I see many firms making real progress in creating more equitable opportunities and career pathways for people regardless of gender or race. I think the focus in 2024 and beyond should be looking at social mobility and how to attract talent from a wider pool, including people from diverse socio-economic backgrounds.

At Barclays, we’re passionate about improving diversity, equity and inclusion (DE&I) and have learned some really valuable lessons through our own social mobility initiatives which we are delighted to share. Let’s face it, the professional services stereotype needs to change. Increasingly, employees and job candidates want to work at a firm that puts sustainability, ethics and social responsibility first as the cornerstones of the increasingly important environment, social and governance (ESG) agenda.

These days, recruits are looking to join a business that cares about protecting the environment and social equality, in other words a firm that cares about more than just making money.

James Morris

Head of Business & Professional Services, Barclays Corporate Banking

Feeling the pressure on costs

Salary inflation across most of the business and professional services sector over the past couple of years has left many firms with rising wage bills at a time when there is increased pressure on their top-line earnings. For some firms, that squeeze may be exacerbated by the impact on cashflow of the change to basis period accounting rules.

These market dynamics could mean more M&A, but certainly firms will have to continue to manage their cashflow closely. As I’ve said elsewhere, human capital is key in this sector and it’s the main cost base, so redundancies will be the last resort solution. However, this is where digital technologies become so important in driving efficiencies.

Key takeaways

Make ESG good for business

Everyone is talking about the ESG agenda – and rightly so. Not only is protecting the environment and being socially aware the right thing to do, but the most successful firms realise an ESG strategy is good for business too.

Pick your priorities carefully

Prioritising investment and allocating resources in relation to key opportunities and threats – whether ESG, AI or something else – will be especially important in 2024 when there are still several financial and political uncertainties.

Look to the regions

In the face of challenging macroeconomic conditions, new sources of revenue could be up for grabs in previously unexplored or ignored markets. Firms that have perhaps up until now focused on the usual suspects might consider extending their coverage to other regions or jurisdictions.

Keeping fraud front of mind

Fraudsters are as active as ever across the business and professional services sector, impersonating our colleagues and attempting to defraud our clients. To help protect you and your business we have a wealth of resources available. You can view our quarterly fraud webinars and take a look at our other educational resources on our Fraud Protection Hub. 

Remember, Barclays will never:

Ask you to make payments or move money to a ‘safe’ account

Call and ask you to provide or enter your PIN or use your biometric device, for any reason

Take control of your computer.

Get in touch

Request a call back from our team and see how we can help you develop strategies for managing your business.

Under £6.5million (please visit https://www.barclays.co.uk/business-banking/‡ or call 0800 515 462)

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