Consultancies and MBA Recruitment

The MBA and the consulting industry are closely linked, as the skills of an MBA graduate are perfect for the industry. Many firms consequently see a top MBA as an essential pre-requisite of joining as a consultant and, as James Donald reports, the credit crunch is not affecting recruitment as badly as some had feared.So what are the skills that make top MBA graduates so attractive? When MBA candidates or graduates join Bain & Co - number 330 in the Forbes (a US media and publishing company) list of America's private companies last year - as consultants they, "take responsibility for attacking the most advanced and difficult problems our clients face, including understanding specific competitor performance, assessing underlying market dynamics or dissecting the drivers of-and potential for-financial returns."

McKinsey & Company say that their consultants are a "network of leaders" with skills which can be developed on an MBA: "What we look for when we are hiring are individuals with leadership potential, integrity, a sharp analytical mind, creativity, and the ability to work with people at all levels in an organization. We are problem solvers with a passion for excellence. We are intellectually curious and highly collaborative." As a consequence of this demand for MBA-style skills, consulting firms are traditionally among the largest employers of top MBA graduates. At McKinsey & Company 44% of their 7,000 or so consultants are MBA graduates, 24% have a non-business masters degree, 22% have an MD or PhD, eight per cent an undergraduate degree and two per cent are armed with a law degree. Business Week says that McKinsey, "remains the high priest of high-level consulting, with the most formidable intellectual firepower, the classiest client portfolio, and the greatest global reach of any adviser to management in the world."

The company is also known as a firm that develops leaders and is in the top 10 of worldwide business magazine Fortune's Global Top Companies for Leaders in 2007. Consulting firms are keen on MBA graduates and MBA graduates are pretty keen on consulting firms as well. The 2008 QS TopMBA Applicant Survey, finds that consulting is a favoured destination by 25% of MBA candidates, second only to financial services (27%). Others would ideally like to work in retail (13%), IT and telecommunications (10%), industry and engineering (8%). Academia falls short at just 1%. The consulting industry - including management, scientific and technical - was worth over $160 billion in the US in 2007, according to industry statistics producer Plunkett Research estimates. Kennedy Information, which provides research for consultants, estimates the industry at over $300 billion worldwide. The 1990s were good to the industry, but then the economic downturn at the beginning of this century ended that period of growth, especially within technology companies. Things have turned around since 2005, although there remains a touch of uncertainty about the next year. One bit of good news  is that consulting firms are so far keeping their heads above water with this latest wave of economic troubles, and are still hiring. James Platt, head of MBA recruitment at Boston Consulting Group (BCG) told the Times newspaper in London, in April 2008, that there has been no drop-off in the firm's MBA recruitment strategies: "Our need to bring people in is somewhat independent of any short-term ups and downs in the market. MBAs are absolutely core to what we do." He also noted that the consulting industry is seen as a safe sector, so more and more applicants are coming from other industries: "The impression I get from the CVs I am seeing is that we are seen, perhaps, as being quite safe and therefore we are getting increased applications and broader applications," he says.

Nick Greenspan, a partner and head of European recruitment for Bain & Company backs up this view: "If there is a change, it's that we now see more applicants from non-MBA students. We see more applicants from industry." Recruiting for the big companies is often done through business schools. To apply to the major consultancies, you can do so through your school's specific application page, or directly online. McKinsey are one of the largest recruiters of MBAs and typically hire over 500 MBAs each year. Bain, BCG, Booz Allen Hamilton and IBM Consulting all hire over 100 MBAs each year. And if you don't have an MBA when you join a consultancy firm, chances are they will make sure you get one later on. For instance Bain Amsterdam, "considers pursuing an MBA to be part of the normal professional development of its consultants, and is therefore willing to sponsor and finance applications to such programs." This policy means that if you don't have an MBA when you start with them, they will help you get one whilst you are working for them and the list of schools they work with includes Chicago, Columbia, Harvard, Sloan, Stanford, Wharton and IMD and INSEAD in Europe.

What do consultants actually do?

Consultants are hired advisers to corporations who tackle a wide range of business problems for their clients and provide solutions. The problems can range from researching a new market to a total restructuring of an organization. Management consultants make up the biggest part of the industry, but there are other strands, including marketing, technology, and human resources. The top management consultants may charge their clients anywhere from US$300,000 to U$1 million in monthly fees, billing top consultants at as much as US$5,000 daily plus expenses, and associates at US$1,500 or so. Their recommendations can result in widespread corporate upheavals, which can obviously increase the profitability of the company.   Their work is demanding - some corporations expect them to perform miracles - and there is often much international travel involved, but the rewards can also be great - top consultants may earn between US$200,000 and US$500,000 per year.