So, you’re about to graduate and you think you want to be a management consultant. Or more likely, you think you’ll spend a few years as a consultant and then move on to other things. You’re not alone. Consulting firms are traditionally among the largest employers of top MBAs and college graduates, and competition for jobs is stiff every year.
More than half the people in top MBA programs and a significant number of college seniors flirt with the idea of becoming a management consultant after graduation. It’s a high-paying, high-profile field that offers students the opportunity to take on a lot of responsibility right out of school and quickly learn a great deal about the business world.
In essence, consultants are hired advisers to corporations. They tackle a wide variety of business problems and provide solutions for their clients. Client companies hire consultants when they are up against problems that require expertise beyond what their staffs can provide, or when they need the fresh perspective of an outsider. Because it’s expensive to keep smart, analytical thinkers on staff full-time in case a large enough problem arises, clients view consultancies as rent-a-brain agencies, where they can hire intelligent analysts on an as-needed basis.
For consultants, this means constantly being exposed to the greatest challenges companies face: how to integrate staff and work processes after an acquisition, how to restructure after bankruptcy, where to set up manufacturing facilities abroad, how to attract and retain the right employees. Depending on the size and chosen strategy of the firm, these problems can be as straightforward as researching a new market or as complex as rethinking the client’s entire organization. No matter what the project is, it’s difficult to scoff at the power that management consultants yield. They can advise a client to acquire a company worth hundreds of millions of dollars, or to reduce the size of its workforce by thousands of employees.
One word of clarification: “Consulting” is a big, one-size-fits-all term that includes virtually any form of advice giving in a business setting. This book focuses primarily on the flavor known as management consulting. Often called “strategy consulting,” this segment of the industry includes firms that specialize in providing advice about strategic and core operational issues, such as finding new channels for selling products or reducing the costs involved in producing a product. Although some of the highest profile firms populate this segment, they’re not the only ones doing consulting.
Thousands of other organizations and individuals call themselves consultants and make money selling their advisory services, and they offer plenty of opportunities for employment. If you like the idea of advising businesses and you have a particular interest in computers, human resources, corporate communications, mobile communications, health care, financial services, real estate, e-commerce, or some other specialized field, there’s a good chance that you can find a position within an organization doing precisely that.
The field of IT services in particular has grown up over the past decade. Many of the biggest consulting firms, including IBM Global Services, Capgemini, and Accenture, derive a significant portion of their revenue through systems integration and outsourcing engagements. These firms work with a client to develop hardware and software solutions and then often manage the systems (hence the term outsourcing).
By and large, the things insiders like about consulting are similar across the board. They enjoy the variety afforded by working in different industries for many different clients, the intellectual challenge of pushing themselves to the limit as they tackle complex business problems, and the people with whom they work. And they like the money and the perks. The industry pays very well, and consultants travel in style.
Consulting insiders also have a litany of complaints: 60-hour workweeks are standard (with crunch times often calling for more), extended travel is the rule, and personal plans often must be put on hold. Clients —not you—drive the deadlines, which can severely cut into your social life. In addition, at some point most consultants long for the opportunity to actually implement their great ideas.
Just as firms are increasing their profits, they also are expanding the consulting workforce. Insiders report heavy recruiting in 2007 for the third year in a row. And it’s a seller’s market: Competition for recruits has become more intense as candidates are lured into other fields. This competition for graduates reflects several trends, including a shrinking number of students earning MBAs; more competition from other industries, such as technology firms, financial services, real estate, and government agencies; and voluntary attrition typical of a strong economy as consultants leave for new opportunities. Would-be consultants can take a deep breath, because these trends bode well for the class of 2007–08.
Career Tracks
As each firm has its favorite buzzwords, it also has unique terminology for its rank and file. While the titles might vary from firm to firm, the roles can basically be divided as follows: analyst (also called research associate or staff consultant at some firms), consultant (or senior consultant), manager, and partner or vice president. In addition, consulting firms hire a cadre of highly capable nonprofessional staff to fill administrative and support positions. (This is not a bad place to be if you’ve got skills in PowerPoint and you like to create slides.)
Administrative AssistantMost consulting firms have a fairly large pool of college-educated administrative assistants and support staff on board so that the consultants can focus on tasks that justify their $200-plus per-hour billing rates. In addition to performing standard support functions, many have specific roles (recruiting, office administration, or website maintenance, for example). Most firms also have a group of graphic designers on staff to prepare materials for presentations.
Salary range: $30,000 to $50,000 or moreAnalyst/Research Associate/Staff Consultant This is the position at the bottom of the professional pyramid. The vast bulk of analysts are young, talented, and hungry college graduates. Many firms structure this position to last for two to three years, after which the analyst is expected to move on—perhaps to graduate school or another employer. (Some firms do allow people to progress up the management ladder without leaving the firm.) The work itself—as well as the hours—can be quite demanding. It often includes field research, data analysis, customer and competitor interviews, and client meetings. In IT, analysts might do heavy-duty programming.
Salary range: $45,000 to $75,000, plus a signing bonus or year-end bonusAssociate/Consultant/Senior ConsultantThis is the typical port of entry for newly minted MBAs (and increasingly for other graduate students as well). Senior consultants often perform research and analysis, formulate recommendations, and present findings to the client. Oh, and at many firms, they have to implement those great ideas, too. Although this is usually a tenure-track position, a fair number of consultants will leave the business after two or three years to pursue entrepreneurial or industry positions.
Salary range: $70,000 to $130,000 or more, with bonusManagerAfter a few years, a senior consultant will move up to manager. As the title implies, this usually means leading a team of consultants and analysts toward project completion. Some firms may hire MBAs with significant work experience directly into the manager’s position, particularly in their IT practices. In addition to having more rigorous responsibilities for managing the project team, the manager will typically be a primary point person for client interactions.
Salary range: $75,000 to $150,000Partner or Vice PresidentCongratulations! You’ve forded the River Jordan of consulting and arrived at the Promised Land. Note that some firms further subdivide partners into junior and senior grades. And if you aspire to it, there’s always chairman or CEO. As a partner, one of your big responsibilities will be to bring in new work. Fortunately, as with other big-ticket sales jobs, the pay can be quite rewarding.
Salary range: $250,000 to several million dollars at leading firms Compensation
The major consulting firms are among the best-paying employers for new graduates, though the gap between consulting and industry has narrowed somewhat over the last few years, as industry has been catching up. Consulting firms are also known for offering excellent perks and benefits, such as annual offsite meetings at posh resorts and reimbursement of school expenses. Many firms have been moving a larger portion of pay into performance-based compensation programs, which become a bigger factor the longer you’re at a firm.
Salaries and bonus packages at the top firms are generally in close range of each other, since these firms usually compete for the same pool of candidates. At the margins, there are slight differences in compensation: Lesser-known firms may offer slightly higher salaries or bonuses to attract top candidates, and some organizations have different ways of splitting up the bonus pie (for instance, linking a portion of the bonus to the firm’s annual performance). To get more specific information on compensation practices, check out WetFeet’s individual company Insider Guides.
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