High profile, huge responsibility, exposure to lots of different organisations, management teams and industries, what's not to like about consultancy as a career? David Williams looks at how this perennial favourite has weathered the downturn and what the prospects are for the future.
You couldn't ask for a better training course for consultancy than an MBA, says James Platt, Partner and Managing Director with responsibility for UK recruitment at Boston Consulting Group (BCG).
If the MBA is part one - the launch pad of a career - then consulting is part two, agrees Mark Page, Partner at A.T. Kearney's London office. It provides such a firm grounding in different industries and different management disciplines.
MBAs are very well prepared for consulting because they usually offer a background in different industries and bring that experience with them, adds Kathrin Pommer, HR Coordinator with responsibility for MBA relations at Roland Berger in Germany. They also have the international mindset we need and the MBA has trained them in finding an analytical approach, which is why they are ideal candidates.
Consultancy is attractive to MBAs because they like the steep learning curve, while on the client side they get direct contact with divisional managers and board members. On the MBA program, they get used to being in contact with inspiring people and an international peer group, and consulting is a very similar environment. It also gives them an opportunity to get to know several companies, so the work suits people who are keen on broadening their knowledge and skills.
Since the dot-com crash in 2002, when many consultancies found themselves massively over-staffed and were forced to reduce numbers, recruitment into consultancy has accelerated steadily. By 2006 the sector had surged back so strongly that it had easily overtaken finance as the leading source of MBA vacancies, and in two years that followed it widened the gap even more (Source: the QS Top MBA Salary and Recruitment Report 2008). This recruitment was driven by what was happening in the wider economy. As the economy expanded, companies and organizations were very willing to invest in big restructuring, IT or ERP (Enterprise Resource Panning) projects. They were happy to outsource some functions, and they needed both blue-sky growth strategies and entry strategies for the new markets that globalization and increasing Internet usage were creating. This drove companies to buy in the best advice and specialists they could afford, and, as a consequence, many different types of consultancy prospered.
A changed landscape
Inevitably, the contours of this commercial landscape have been redrawn since the start of the downturn. As companies hoarded cash in the early months of the recession, there were naturally far fewer large-scale implementation projects to be had. The creation of blue-sky growth strategies quickly became a redundant skill while there was less willingness to look at areas such as outsourcing. However, this hasn't meant a general dot-com style crash in consultancy recruitment (although some firms that were over-exposed to vulnerable markets such as the private equity sector will have suffered). This positive situation exists partly because the current downturn did not arrive without warning and partly it is because a recession brings its own consulting opportunities.
This is nothing like the 2001-2002 downturn when consulting companies found themselves horribly overexposed, says Mark Page. The warning signs about the impending credit crunch were coming long before Lehman Brothers collapsed and this enabled us simply to tweak our recruitment plans down a bit. We are still recruiting, we just ran our plan down slightly in 2009.
As you might expect given the current environment, there has been a switch in work, says James Platt at BCG. Instead of growth strategies, we are involved in transformational work, turnarounds and cost-reduction projects. Clients still have to work out how to succeed in the new environment and, as most of them aren't set up to think through the new dynamics, they continue to look outside for help. It's true their problems are bigger than they were two years ago, but this means their need for help and support is bigger.
Companies in this type of crisis have a high demand for consulting and still require the services of high-potential individuals, agrees Kathrin Pommer at Roland Berger.
John Logan is Human Resources Manager at ZS Associates, a company which consults globally on sales and marketing strategy, as well as on outsourcing and implementation in the healthcare sector. Everybody wants to grow their top line right now, he says, and this is where some of the competition in the industry is coming from. We are seeing consultancies who would once not have touched the kind of implementation roles we specialise in who are now prepared to take on this kind of work.
Consultancy in general has then weathered the recession quite well, but what about the opportunities for 2010 and beyond? The general outlook appears to be one of cautious optimism.
Hiring people out of business schools is still quite a competitive business for us, says Page. We are not going on a hiring spree, but even so we are still seeing the normal attrition of people leaving the office for the normal reasons: to go to business school, into industry or to transfer abroad. So we always have hiring needs just to keep the headcount flat. There is still uncertainty in the market for consultancy services, but there is also an expectation that we are moving back towards some sort of normality. If we grew our numbers by five percent in 2010, that would be where we would feel comfortable.
From our London office perspective, we are bringing in more people than we have ever done before, says Platt. We are in the mode that if we can find the right quality of candidates we will hire them. We have been sensitive in the current environment, but as long as the business is there we will bring people in.
I expect increasing demand in 2010, says Pommer. It is difficult for anyone to predict what will happen in the next twelve months, but, as Roland Berger is a market leader in restructuring, I expect rising demand as M&A and cost-efficiency projects continue to dominate. The offices are still monitoring capacity closely but I am starting to detect an increase in demand right now.