Consultancy has always been a very popular choice with graduates, attracted by the lifestyle, the money and the “glamour” of the sector.
And the consultancy firms have been keen to recruit the best and brightest of them. Yet this year, for the first time in around a decade, some of the chosen ones have had their job offers withdrawn or deferred as the recession bites. Firms like Accenture, PricewaterhouseCoopers, Cap Gemini Ernst & Young and Andersen, as well as pure strategy firms like Booz Allen & Hamilton, have been laying off staff at all levels, and graduate recruitment is not immune to the axe. PwC withdrew job offers from 78 of the 180 graduates due to join its trainee scheme in September, offering £7,000 in compensation.
And Accenture deferred the jobs of 400 UK graduates, giving them a £6,000 signing on bonus and half pay until the new year.
While many firms are still attending the “milkround” and making presentations at careers fairs, most have no intention of recruiting any finalists at the moment. And the deferred entrants will have a knock-on effect next year, so that active recruitment may not take place until 2003.
Barrie Dennett, a senior partner with ADD, which specialises in research in the consulting industry, recently gave a keynote speech at a consulting fair at Cambridge University. His message to students was to think very carefully about consultancy as a career. He believes that strategy consulting is set to go into hibernation for the next six to 12 months as forward thinking strategy takes second place to business survival. “It is a very gloomy story. Some major firms are working on billing levels of less than 50% which means half of their staff are twiddling their thumbs. And there are rumours that some firms are not just discounting their prices but offering clients free assignments in order to retain them and keep staff busy.”
Others are simply letting people go. “For the first time firms like McKinsey are laying people off, and the collapse or decline of Internet consultancies such as MarchFirst, Adcore and Razorfish have multiplied the number of consultants looking for jobs. The speed of impact of the recession has hit the recruitment market hard,” he says. “Across a wide range of consultancies, graduate offers from last year have been retracted or start dates postponed. Many of last year’s finalists have yet to start work.” And the same is true further up the food chain. While last year there was a war for talent at the business schools, around two thirds of this year’s Insead MBA graduates have yet to find permanent jobs, he says. ADD’s research suggests that most of the major consulting firms will have recruitment targets at least 50% lower than last year and in many cases will not be recruiting.
But despite all the gloom, it seems, finalists are as interested as ever in the sector. Mike Tiley, careers officer at the London School of Economics, says consultancy is still one of the most popular areas for students.
Around 150 of the university’s 3,000 graduates and postgraduates join consultancies in a good year, he adds. “That number is going to be very much lower this year and we are saying that finalists must be more flexible, and focus on more than just investment banking and management consultancy.
But there will still be a bit of a rush over the cliff.”
PA Consulting is one of the few firms still actively recruiting. Says graduate recruitment manager Elizabeth Player: “We are seeing huge interest this year, partly because some consultancies aren’t recruiting. We take around 50-60 graduates each year. That number will be lower this year but we are still recruiting because we hope things will have picked up by September 2002.”
So what is the attraction? Gordon Chesterman, deputy director of Cambridge University’s careers service, says it is a mix of things. “Consultancy is a very portable business experience which gives people the chance to fill their address book with contacts before hopping on to something different.
It enjoys a fair amount of status and students love the presentations: they hear about wonderful projects, and see themselves flying all over Europe, talking to FDs and MDs from major firms and reshaping organisations.
The pay is attractive and so is the collegiate lifestyle, working alongside graduates with similar mindsets and intelligence.”
However, Chesterman believes the job withdrawals and deferrals have affected graduates’ view of consultancy as a career. “They have always known that it is a very competitive field to get into and the odds are against them, but they were sufficiently confident to look just at management consultancy and they would secure what they were looking for, even though they would have to make many applications,” he says. “This year the advice we are giving to students is to have a plan B up their sleeve, which may be implemented later, if the consultancy applications are unsuccessful, or run alongside them.”
He suggests that students look at things like fixed income trading and investment banking, corporate finance and equity research, as near neighbouring careers to strategy consulting. But there are other options too. Says Chesterman: “Other career paths to be considered include chartered accountancy; or working for a blue chip, such as Proctor & Gamble, Unilever or Shell – traditional milk round recruiters who still have vacancies, who aren’t suffering a blip and are rubbing their hands with glee at the prospect of getting bright engineers at the expense of the consultancies. Students are also looking at post-graduate study – staying in the secure environment of academia for another year (or three for a PhD) – but they appreciate there is pressure on funding and places for that as well.” Another option, he says, is to forget about careers altogether for the time being and concentrate on getting a 2.1 or a 1st and then reapproach the job market in the summer of 2002 with the view of having a year off. But he warns: “This must be used wisely to gain some trophies for the CV, such as another foreign language or some relevant experience.”
Last but not least, he says, students are considering other careers that will allow them to jump ship in three or four years and join a consultancy as an experienced hire. Here he cites roles like that of a logistics manager for a large fmcg company or a financial manager for a petrochemical company.
Paul Brown, deputy director of Oxford University careers service, agrees.
Like Chesterman, he has been advising students strongly to have back-up plans. “We have been saying this with much more force this year and the evidence is that our advice is being heeded,” he says. Nevertheless, there is still considerable interest in the sector. When the university ran its first consultancy fair recently, 800 finalists and pre-finalists turned up, says Brown. And presentations by the likes of Accenture, Bain, Arthur D Little and Marakon attract large numbers of would-be recruits. “Many of the 30 firms represented at the fair are not recruiting at the moment but a lot of them are encouraging people to apply, hoping that things will revive soon,” says Brown.
So what of the students themselves? Simon Dennett, a final year student at Bristol University studying physics, says the job market is causing concern among finalists. And he feels for the students who have had job offers withdrawn. “That is a horrible situation to be put in: left high and dry at the end of the year with no options because all the other firms will have filled their quotas.”
He is considering three courses of action: “To make applications to every firm under the sun and hope to get through one interview – but I don’t really like that because it means you are not picking a firm on the basis of ethos and culture.” His second option is to move into something like banking.
“I have been looking at management training schemes and fast track graduate programmes.” And, the third is to take a year off, learn a language or do further study.
Rosie Bennett-Rees, a fourth year student studying engineering at Oxford, had her sights set on consultancy but is alarmed by the recent job withdrawals.
“Everyone says how few consultancies are recruiting at the moment so I am thinking about plan B: perhaps a management scheme with the likes of Unilever, or the Foreign Office.”
Both students differentiate between the consultancies which have deferred jobs, like Accenture, and those, like PwC, which have withdrawn them.
“It doesn’t encourage you to apply to firms taking the latter approach,” says Dennett.
And if, as commentators suggest, a revival is not too far away, this may be a concern for some firms. Not only will many bright graduates have opted for other career paths but, in the battle to be the employer of choice for subsequent generations, ground may have been lost.
- Mary Huntington is a freelance journalist
THE CLASS OF 2001 SPEAKS OUT
On the face of it the consultancies that are not recruiting are just losing good candidates to the blue chips and other walks of life.
But is there more to it than that?
Commentators suggest that the way some firms have handled the job withdrawals and layoffs may tarnish their image somewhat. Says one recruitment consultant: “Accenture have handled it really well, offering 50% of salary and deferring the job for six months. The same can’t be said of PwC.”
ADD’s Dennett talked to one disillusioned graduate at the Cambridge fair, whose Booz.Allen & Hamilton job offer had been withdrawn. “She saw the firm’s stand attracting flocks of people and putting out the message that it was a great firm to work for,” he says.
Research by ADD’s sister company, ADD-Select, in association with Top-Consultant.com, stresses the point. Its survey of around 100 finalists through the Top-Consultant database elicited 67 responses from graduate and MBA students. Of these 56% had friends who have been affected by retracted job offers or redundancies. And around 50% said that the deferrals and withdrawals had made them reconsider their options. When they were asked whether there were firms they would be reluctant to join now or in the future as a result, PwC came top, cited by just under a third of the 38 responses.
But the list also included other big firms like Accenture, McKinsey, Cap Gemini Ernst & Young, and KPMG. Some respondents gave specific reasons for their choice, such as “up or out policy at McKinsey is burning talent” and “some of the firms seem to be in a panic, especially the Big Five!” Despite these qualms, however, many respondents said they would apply for jobs anyway.
And their view of consultancy seemed quite realistic, with the majority (90%) citing “great experience and variety” as a reason for entering the industry. Almost 60% of those considering consulting as a career also viewed it as a good springboard for other things, and the same proportion were swayed by the salaries paid. Significantly, perhaps, only 21% believed it was a secure career option.
ADD-Select (email@example.com) specialises in recruitment and interim management with a focus on the consulting industry.
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