Digital transformation to drive profit and headcount goals - report

Despite economic headwinds, 83 per cent of firms are looking to increase profit growth this year and 42 per cent expecting to increase headcount.

Engineering firms started the year with the most ambitious gross profit margins will growth, with 60 per cent predicting an increase of over 10 per cent in 2025 from last year. 

The research, conducted across UK-based engineering, architecture, and consultancy firms, identifies technology and automation as the top potential drivers of profitability.

The top two priorities for firms are investing in new technology (39 per cent) and the effective implementation of new innovations (37 per cent). Cybersecurity is also a high priority, with 36 per cent of project-based firms citing it as a top three priority for their business, compared to 23 per cent last year. 

As a result of the focus on technology advancements, 56 per cent of UK project-based firms are now at Mature or Advanced stages of their digital transformation development, up from 32 per cent in 2024. Deltek added that compared to 2024 predictions, timelines have been brought forward two years with many professional services already achieving a level of digital maturity that they had not expected to reach until 2027. 

The use of AI and automation are also pivotal this year in attaining key performance indicators (KPIs) for project-based businesses in the UK. Rising competition for talent (30 per cent) and project complexity (28 per cent) in 2025 are the key pressures identified for project management in the next three years. 

However, 40 per cent of firms are addressing this by prioritising the adoption of AI and automation for streamlining project processes. In 2025, confidence in tracking key project metrics (profitability, budget, and client satisfaction) has risen to 75 per cent in 2025, up from 59 per cent in 2024. 

In a statement, Neil Davidson, group vice president, professional services sector at Deltek said: “Professional services firms are already recognising the efficiency savings and growth opportunities provided by digital transformation. This year is a pivotal time for realising the benefits technology can bring, as firms still look to grow in 2025.  

“It’s promising to see that the shift in the use of technology is also underpinning greater confidence in tracking project metrics – something we have not seen in our past Clarity reports.”

Hiring intentions

As well as investing in technology, project-based UK businesses are also expanding their workforce, with 76 per cent planning to increase headcount in 2025 compared to 58 per cent in 2024.

Engineering firms were the most ambitious in this area in terms of significant headcount increase, with 42 per cent planning to grow their talent pool by over 10 per cent in 2025 compared to the average 34 per cent expecting the same level of growth across all professional services firms.

However, organisations are conscious that a lack of upskilling investment (48 per cent) and a lack of employee engagement (34 per cent) are still detrimentally impacting their organisation. To address this and empower young professionals in 2025, firms are concentrating on promoting a culture of collaboration and innovation in the workplace (51 per cent), encouraging continuous learning (49 per cent), and providing access to advanced technologies (45 per cent).  

Click here to access Deltek’s Clarity 2025: Trends & Insights for Architecture, Engineering and Consultancy Firms.