Engineering firms are taking a leaf out of the quantity surveyors' book by diverging into the lucrative field of management consulting.
You'd hire a consulting engineer to make your new office block stand up, but would you think about getting one to re-engineering your payroll system? For many firms, the answer is yes. The past year has seen a dramatic expansion in the provision of non-engineering advice by consulting engineers on improving the running of companies.

Management consulting work in the construction industry has traditionally been the preserve of a handful of the "big five" consultancies – Pricewaterhouse Coopers, Ernst & Young, KPMG, Accenture and Deloitte & Touche. However, consulting engineers have been steadily raising their profile in the sector.

Last year, consulting engineer Mott MacDonald expanded its management consulting division by about 40%, while Mouchel's division expects to quadruple its 60-strong staff over the next two-to-three years. WSP Group is about to set up a separate division to build on its management consulting activities.

Engineers are following in the footsteps of quantity surveyors, which for the past four years have been offering management consulting services in their quest to diverge from their traditional, measurement-related role.

QSs such as Gleeds, Citex and Franklin Andrews increasingly compete head to head with the big five in management consulting. Last year Franklin Andrews was confident enough to set up a separate company to provide management consulting services – Capro Consulting.

Franklin & Andrews' chairman, Martin Bishop, says: "We are prepared to do battle with companies like PWC and it will be great if we can migrate into their field. In the past, we have worked with them – and they have turned to us for technical advice. Clients can see that."

Engineering firms are also stepping up their challenge to the mainstream management consultants. Graham Jackson, consultant at recruitment agency Potensis believes that the experience of managing teams and solving complex problems on public–private finance projects has given engineers the skills to move into management consulting.

"Engineers are shrewd business people and they have the exact mindset that you need for management consultancy," he says.

According to Jackson, engineering firms increasingly recognise the commercial benefits of diversifying their services. He says: "Diversification makes a company more stable during quiet times in the economy, and of course engineers with management consultancies have a wider market to appeal to."

Jackson also draws attention to the higher fees that can be commanded in the sector. One engineering firm says that its management consultants can earn more than twice as much as their colleagues in more traditional parts of the business.

Another reason that engineering firms are expanding into management consulting is client demand for the service. Tim Evans, director of Mott MacDonald's management division, says that its key clients want to use the same company for management and engineering because they like a "holistic approach".

Engineers are shrewd business people and they have the exact mindset that you need for management consultancy

Graham Jackson, recruitment consultant, Potensis

Evans cites one client active in the engineering and IT sectors that employed his firm to look at its engineering work. Mott MacDonald completed on time, while the consultant looking at the IT side of the business was late. Consequently, the company asked Mott MacDonald to look at its IT systems in future.

"The company appreciated that the mindset needed for project management could be applied in the IT sector," says Evans.

Other engineering firms are also winning management consulting work from their existing client base. "We lever off our present clients," says Richard Cuthbert, director of consulting at multidisciplinary consultant WS Atkins. He gives the example of a large pharmaceutical company that was already using WS Atkins' engineering services, then decided to hire it as a management consultant after acquiring a rival firm. The company found it had too many research labs so WS Atkins was asked to assess which were the most efficient.

Mott MacDonald says that its management consulting division has picked up work from the telecommunications sector in a similar way. Evans says: "One client from this sector wanted us to take a project management approach to change management." Mott MacDonald helped change the company's traditional strategy of separating customer services from the networking side of the business, he says.

However, the traditional leaders in management consulting such as Ernst & Young and KPMG are not going to loosen their grip on the market without a fight and are seeking to poach the best employees from engineers.

According to Jackson of Potensis, management consulting firms appreciate how skilled engineers can be. "Consultant engineers have fine minds. They are trained to think in a very logical way, and many have qualifications such as an MBA," he says. "The traditional management consultancies are realising this is all good stuff – after all, it is all about grey matter."

Engineering firms know that their employees are being eyed up – and that if they go, they are not easy to replace. Jackson says that in the past 18 months he has met only three or four people who could effectively work as a management consultant within an engineering firm.

Although senior management consultants at engineering firms can earn up to £100 000, compared with the £30,000-40,000 earned by their more traditional colleagues, they can earn still more in the City. "But we offer more variety and are not so process-constrained.

People work for us because they want the intellectual challenge," says Mott MacDonald's Evans.