Tariffs are often viewed through the lens of international trade policy, but their downstream effects reach deep into professional services—consulting included.
Recent rounds of tariff introductions and revisions, particularly by the United States, have added another layer of global economic uncertainty. While consulting firms may not import or export physical goods, they operate within the broader systems shaped by such policy shifts.
As tariffs alter client behaviour, restructure supply chains, and reshape corporate priorities, they also impact demand for consulting services and influence compensation dynamics within the industry.
Disruption Triggers Demand—But Not Evenly
Historically, tariffs trigger uncertainty and disruption. For consultants, disruption often translates into opportunity. Clients facing increased costs due to tariffs seek advice on how to restructure operations, identify alternate suppliers, localize production, or navigate cross-border regulations. Strategy and operations practices typically see an uptick in demand in these periods.
However, the benefits are not evenly distributed. Boutique firms that rely heavily on clients in trade-sensitive industries may feel the pinch if those clients pause discretionary spending. Conversely, larger firms with diversified client bases and deep expertise in supply chain or trade compliance may see growth.
Services and Tariffs: Not Immune, Just Indirect
Consulting services themselves are rarely subject to tariffs. Most trade policies target physical goods, not expertise. Still, the consulting industry is affected indirectly. Tariff-driven cost increases or supply chain disruptions can shift client spending priorities—sometimes delaying projects, other times accelerating demand for advisory support. In more complex trade disputes, regulatory barriers to delivering services across borders may also emerge, though this remains uncommon.
Regional Compensation Pressures
Tariffs often prompt companies to shift operations regionally, particularly from high-tariff geographies to more favourable ones. This movement affects the distribution of consulting demand geographically. For example, an uptick in demand for consultants in Mexico or Southeast Asia might follow tariffs targeting Chinese goods, as companies explore alternative manufacturing hubs.
This regional shift can create compensation pressure, especially for firms trying to retain experienced consultants in high-demand markets. While global firms may have the flexibility to adjust pay bands across offices, many still benchmark compensation by region or country. In those cases, benchmarking data needs to be updated more frequently to remain accurate during volatile trade shifts.
Compensation Structures Adapt to Market Volatility
Volatility brought on by tariffs and related trade policy changes may lead consulting firms to revisit their compensation structures. In periods of uncertainty, firms may emphasize performance-based bonuses over fixed salary increases, particularly at senior levels. Incentives tied to utilization, client retention, or business development become more prominent as firms aim to reward adaptability and revenue resilience.
On the recruitment side, firms may also shift their hiring strategies—favouring professionals with trade policy or supply chain backgrounds, which can place upward pressure on compensation for niche skill sets.
Tariffs as a Benchmarking Variable
For firms benchmarking compensation, tariffs are an indirect but relevant factor. While they don’t directly alter pay, they influence the conditions under which consultants operate—demand for specific services, client industries under pressure, and regional reallocation of work. When reviewing benchmarking data, consulting firms should consider whether tariff changes or anticipated policy shifts might be distorting demand in certain functions or geographies.
At Vencon Research, we’ve seen clients request more granular cuts of benchmarking data during periods of trade disruption. Understanding compensation trends not just by role, but by industry served or region of operation, becomes essential to ensure alignment with shifting market realities.
If you're re-evaluating your compensation strategy or want a clearer picture of where the market is heading, Vencon Research can help. We specialize in compensation benchmarking tailored to the consulting industry—so you can make informed decisions, no matter how the trade winds shift. Get in touch now.