“I want to be a management consultant” is a statement most careers advisors hear a few times a day. I heard it twice today myself. It’s easy to jump to advice about which companies to apply to or the application process. But there a few things students should think about before applying.

First, there is management consultancy, and management consultancy. There’s the jet-setting, corporate credit-card waving, CXO influencing consultants, and then there’s those consultants stuck in a windowless office in Staines doing photocopying. I have been both of these, and both large companies described me as a management consultant. Interestingly, I was paid pretty similar rates for both. So, how to avoid the latter?

A great interview question to ask potential employers for aspiring consultants is ‘what’s your leverage ratio?

A great interview question to ask potential employers is ‘what’s your leverage ratio?’. This not only shows that you know how the consulting industry works, but the answer will give you a great insight into the type of work the firm does. The leverage ratio is the number of consultants for every partner. High leverage ratios (anything over 20) indicate work that is highly routinised, relatively low day rates and moving towards that basement in Staines (think IT implementation). Low leverage ratios indicate high value work, bespoke projects and more flexibility and creativity (think strategy or innovation work).

Second, how much do they like their Significant Other (or alternatively, got any pets?) because they won’t see much of them. Many moons ago, I had to sack a consultant who refused international assignments because she wouldn’t leave her cat overnight. More seriously, the average tenure of a graduate consultant is 7 years. This is because consulting is really hard work. Have a look at the graph below: the least you can expect to work is 10 hours a day, 6 days a week. Out of the fifty or so people I worked with closely in my consulting days, the vast majority had broken marriages and stress-related health problems. On one large assignment, I’d estimate

Another good question to ask in an interview is ‘what’s your utilization rate?’. The utilisation rate is the average percentage of their time that the consultants are charged out to clients. Again, this shows good understanding of the consulting industry, but equally, any answer above 85% means, in my view, there’s a good chance of burn-out in the first three years.

Another great question for interviews is ‘what’s your utilization rate?’

Finally, be clear about what service they want to apply for. It’s a terrible career move to get into an area where supply of consultants exceeds demand. This usually leads to static careers, low pay, and few opportunities for exit. At the moment, the most in-demand services include cyber-security, digital transformation, big data and artificial intelligence. Bear in mind that you DON’T need to be an expert in these areas, just have a keen interest and to have done some research (e.g. a dissertation). The same is true of sector specialisations. These vary across the world but the big growth areas for the last few years in the West have been Financial Services; Healthcare; Telecoms & Media. Decisions about sector and service can make a huge difference to students’ career trajectories: even after they’ve left consulting.

If you want to learn more, head over to www.consultingmastered.comwhere we offer 12 online courses, a monthly live Q&A webinar, and 15 useful downloads for students. University prices start at £2500 (for 100 students) and £4500 (for the whole University).

Prof. Joe O’Mahoney is a Professor of Management Consulting, an ex-management consultant, and the founder of ConsultingMastered Ltd. His textbook on consulting was the best selling in Europe, and he helped over 450 students land jobs in the consulting industry. His courses have won four national and University awards for excellence..

We’ve been told for a long time, that ‘traditional’ management consulting is being ‘disrupted’ (or even ‘dead‘). The idea being that new entrants, the democratization of knowledge, the competition for talent (especially from technology companies) and the rise of ‘asset-based’ consulting (read consulting + databases & software) will knock the incumbents off their thrones.

But, to paraphrase Mark Twain, reports of consultancy’s death are both exaggerated and premature. Indeed, given the lack of barriers to entry, the longevity of the consultancy powerhouses is the most remarkable thing about the industry: Bain, BCG & McKinsey have been around for a minimum of 50 years, whilst the oldest ingredients of the big 4 (albeit in their auditor form) are over 100 years old. The real question is ‘is this going to change over the next ten years? And if so, how?’.

“The forecast is cloudy with silver linings”

I’ve been talking to Partners at both the big brand names (MBB + Big 4) as well as some of the fastest growing newcomers, and the forecast is (TL/DR) cloudy with silver linings. The top players will continue to come under pressure, but their size, reputation and assets provide huge benefits which smaller players can’t lever.

First, we should note that whilst the names of the dominant players may not have changed, the consulting industry has changed significantly over the last ten years: strategy houses now do implementation, everyone does digital (whatever that means), the demonstration of value is more important, utilisation rates are up and profit margins (on average) are down. These ‘dinosaurs’ can dance.

Second, big players continue to dominate because they buy the competition. Acquisitions by consulting companies peaked five years ago, and have remained at that high ever since: if you buy up everyone that knows Blockchain, then clients have little choice about where to go for advice. Of course, these acquisitions raise their own challenges: a few partners have told me that the potential value of their acquisitions have been killed by the buyer’s culture or processes.

Third, ‘digital’ is much less of a threat to incumbents than is often stated. The massive economies of scale offered by the large players in both operations and deliveries lend themselves to digital: data can be accumulated more easily, the risk involved with digital R&D can be spread, and successful digital assets have a massive pre-existing market.

Fourth, whilst it is true that media companies and banks have increasingly edged out consultancies from the ‘most attractive employers‘ lists, what is not happening is top graduates heading to lesser known consulting brands. Moreover, when business students from top institutions are asked consulting is still the number one employer, and nearly 50% of graduates end up in consulting or banking. To a great extent the brand power of companies like McKinsey & Co. mean they exist in a virtuous cycle: the brand attracts top graduates, which attracts top clients, who pay top whack, which reinforces the brand (note, this doesn’t necessarily mean top work). It’s hard for new entrants to break into this cycle without the deep reputational and financial pockets that MBB offer.

Yet, there are major challenges out there and not all consultancies are adapting their strategy fast enough to stay ahead. The challenges that emerge from the four points above include:

• how to be innovative without killing margins and leverage
• how to assess the viability of digital asset investments;
• how best to combine multi-skilled teams with emerging digital technologies;
• how to do talent development when junior time is increasingly spent coding and cleaning data
• how to ensure that acquisitions do not get killed by the buyer’s culture;
• how to demonstrate value to clients beyond mere project delivery;
• how to keep millennials working at 90% utilisation without increasing turnover;
• how to share (and update) knowledge and skills in global company

There was a real mix in Partner awareness of (or being bothered about) the changes that the industry is facing. Accenture and Deloitte appear to have made significant strategic and structural changes over the last few years to respond decisively to these – many strategy firms, less so. As one Partner commented ‘Shell & BP know they need to embrace renewables, but it’s hard to move away from a tried and tested model’. All were well aware that being a Partner in the 2020s would be more challenging (‘interesting’) than perhaps at any previous time. As one pointed out, ‘when the market is expanding all these challenges seem quite academic (no offence), but the next contraction will really shake up the industry’.

I’m writing this piece because there is a predominant, though not universal, view among management consultants in my network that things will return to normal after a pause in operations. An increasing stack of evidence suggests that this is not the case. First, I will outline the reasons for the relative complacency of especially younger consultants. Second, I will present the evidence for this being a more significant challenge than most consultants realise. Third, I will suggest strategies for pivoting and surviving.

Let’s start with the complacency. Most consultants don’t remember a serious set-back in the industry. The 2008 recession was a mere blip in the steady 3-8% annual growth of one of the safest industry bets in the last fifty years. You have to go back twenty years to the DotCom bust for any serious dent to the inexorable march of the profession, and even this hardly touched the sides. Given the average tenure of a management consultant is eight years, the vast majority of these professionals will have seen nothing but growth, bonuses and success, creating a blind-spot for the consequences a massive crash.

The ‘chatter’, as they say on 24, among consultants, is that COVID-19 is a temporary pause. This is not the case: we are looking at a severe economic shock, potentially bigger than anything since the 1920s. Morgan Stanley predicts that US GDP will fall by 8% year-on-year in the second quarter and unemployment will rise to 12.8%, compared with just 3.5% in February. It may be worth reading that sentence again. The FT reports that retail sales are down by over 50%, and the Economist notes that half of small businesses, the major driver of GDP and employment, have a cash buffer to last them less than a month. I could go on, but you know the story.

In short, a long recession is looming, perhaps a depression, and for those of you too young to remember, the first thing to go will be client discretionary & procurement spend on consultants. Consultancies know this, and indeed, many have made their own projections: McKinsey, Bain, and Oliver Wyman suggest recovery being anywhere from a quarter to over a year away. Over at Source Global Research, they are estimating a hit of 20% on the consulting industry and nearly 30% for the UK market (which was already faltering due to Brexit). Certainly, out of forty or so graduates I know who have received offers, around half have been paused, replaced with secondment or a stipend, or in six cases, rescinded.

Of the 500 or so employed consultants I contacted, many are beginning to hear of significant changes. I have been told of redundancies in around 25% of large consulting firms already (though with massive variation by office) but it is very early days. Other firms have announced paycuts, forced holidays, The impact is being felt most in smaller boutique firms which are either over-exposed on their client base or don’t have the resources to carry benched consultants.

If the 2008 recession is anything to go by, the following is likely to be characteristic of their approach:

1. Major firms will take their time before redundancies are announced as (a) they have the cash to hold onto benched consultants (note, being privately owned as a partnership helps here!) (b) they wait to see how bad it is and (c) they plan their HR & communication strategy and plan. However, redundancies will happen.
2. MBB, however, will hold onto their people, even if it means Partners putting more money into the business. They have very deep pockets, are under no pressure from shareholders, and will be advising clients on how to deal with COVID-19. Other large private consultancies (e.g. Deloitte and KPMG) may also have the reserves and the reputational need to maintain headcount. See this for reassurance (though I’ve heard Deloitte making redundancies in Canada!).
3. If you have been on the bench for more than three weeks, you are likely to be first in line. Middle management (senior consultant, director, junior partner) are likely to be hit hardest as margin is made on juniors, but the senior partners will protect themselves.
4. Hard-hit sectors (airlines, tourism, retail) will cut back on discretionary spend, but increase their restructuring spend. The net effect will be a loss. If you work in these sectors, prepare for the email.
5. Internships will be maintained. These are cheap and flexible.
6. Graduate hiring will continue at a lower rate, and graduates will be reassigned to growth areas.

So, if you are in the firing line, what to do:

• Get your CV out to consultancies. Visit this thread to see who is hiring, and think specifically about restructuring consultancies (e.g. lvarez & Marsal or Alix Partners), crisis management, cost reduction, digital transformation……..or healthcare.
• Get your CV out (ii). Move to the client side. Visit the thread above, and think specifically about industries that are potentially growing (VOIP video, Cloud, Big Data, in-fact online ANYTHING at the moment, but especially). Contact old clients that you stayed in contact with (you did that right?!) and message LinkedIn contacts.
• Learn something that will make you instantly more valuable. Python, AWS, AI, Big Data, Cloud, automation, machine learning…. whatever. Find a course, do it. Linux Academy is good if you can expense it, if not Khan Academy or even Youtube.
• If you’re on the bench make yourself useful internally. Tap up Partners for crucial internal or IP work that really adds value. COVID-19 seems to be a hot topic: write something, raise your profile, appear indispensable.
• If all else fails and you’re ‘coached out’ and have no alternatives, there’s a rather splendid MBA course I teach on…….

It’s one thing to get a job in consultancy (congratulations!), but it’s another thing to be successful, whatever that means. Speak to any consultant, and they will bore you with their advice, regrets and could-have-beens.

My dad always told me ‘if you need something, then go to the top’…. so I asked all the Partners in my network what their advice would be to new starters. Just over fifty responded with advice that ranged from the brilliant (‘your craft as a consultant is more important than your subject matter – practice it!’) to the obvious (‘put your client first’) to the odd (‘it is necessary to have a language’).

What was more interesting are some of the contradictions. For example, a couple of Partners stressed that new recruits should use their initiative as ‘fresh eyes notice old faults’, whereas an experienced Bain & Co. partner told me ‘trust our tested tools and don’t rely on your past experience or knowledge’. Perhaps the former only concerns internal interactions, and the latter, external?

Anyway, I analysed the fifty odd replies and found five common themes which I’ve put into this report so it can easily be shared by careers services and consultancies themselves. Click below for access.

For those of you that haven’t landed the idea consulting job yet, feel free to check out my free resources here or book some 1-to-1 coaching here. Good luck!

Why do McKinsey & others spend so much time on the campuses of Oxford, INSEAD, London Business School & Harvard? The answer isn’t what you’d think.

A student of mine, Ioanna, recently interviewed several strategy Partners, consultants, and HR-specialists as to why their recruitment effort was so skewed. In what order would YOU put these responses?

• That’s where the best future consultants are to be found
• It sends a signal to the market that the consultancy is the best
• These students tend to have the sensibilities that fit with client CEOs
• These students tend to be most similar to those doing the recruiting

Interestingly, University reputation, and indeed degree grade, are next to useless at predicting the job performance of graduates (a 1% predictive value). So, even though several respondents argued for (a), there is little empirical evidence that supports this assertion. No interviewees offered any internal evidence for it either. This is the reason that PWC and others now ignore markers such as A-Level grades when recruiting.

Concerning (b), the market signalling, it was argued by several ex-consultants that the outcomes of consultancy are often highly ambiguous, and so trusting in a brand is crucial in client decision-making. For most top consultancies therefore, advertising their services is not as useful as sending signals of their elite status and expertise: tie-ups with leading publishers, organising and sponsoring elite events, and yes, recruiting from top Universities. All these things indicate to the market that these consultancies must be better than others.

Several respondents pointed out the need for senior clients to be at ease with the recruited consultants. This was relevant not just to their conversational skills, but also the way they acted, ate, their sports and extra-curricular activities.

Crucially, at these firms HR played a minimal part in the recruitment process, which meant that consultants and partners, who are often untrained in bias, often ended up recruiting those with similar interests, backgrounds, and, you guessed it, alma matres. Thus (d) was also a factor.

The obvious drawback there is that strategy consultancies are not only missing out on great talent, but also on the diversity that is crucial for more innovative decision-making. Other consultancies, notably the Big 4, are aware of these dangers have changed their policies to avoid them. The question is, when will strategy consultancies do the same?

Recommendations from the research include:

• Involving HR more in the assessment process
• Dropping University reputation as a criteria in recruitment
• Training consultants and Partners more in the dangers of bias
• Communicating the benefits of a more diverse workforce
• Balancing the importance of the partner interview with insights from HR

Ioanna Mavridopoulou

After a variety of HR roles (recruitment, selection, training & development), Ioanna recently received a distinction in her MSc in HRM from Cardiff University. She speaks in Greek, English, German and Russian, and has excellent interpersonal and communication skills. She is currently seeking a role in the HR profession in the UK.

Email: imavridopoulou@gmail.com