Consulting firms have a voracious appetite for MBAs, according to Barrie Dennett, senior partner at strategy sector analyst ADD-Resources.
“There is intense competition for MBA graduates and it is getting worse,” he says. According to ADD’s research, consultancies take on a third of those graduating each year. Nearly 2,100 of last year’s MBAs were tracked into the top 25 firms, with McKinsey taking 16 percent and Andersen Consulting and AT Kearney 12 percent.
Yet some consultancy chiefs have suggested that MBAs new to consultancy need a lot of training to get up to speed and questioned their value in comparison to experienced hires from industry (see the interview last month with Jan-Willem Broekhuysen of AT Kearney).
Despite this, ADD’s research shows that the number of MBAs going into consulting is increasing, suggesting that most firms think such recruitment is worthwhile. Around 50 percent of Insead’s graduates now go into the sector, says Dennett.
His view is borne out by Lesley Aylward, director of the career management centre at the London Business School. “Last year 39 percent went to strategy consultants and this year that figure will be a lot higher.”
But despite the competition for MBAs, consulting firms are still very discerning in terms of the experience they want from their recruits.
But, says Dennett, “while experience is important it is not overwhelmingly so. The MBAs the top firms are most interested in are those sponsored by their competitors, who have already worked in consulting.” And, he says, “the major firms are putting huge amounts of money into business schools in an attempt to promote themselves among the students and get preferential access to them”.
So what are the attractions of an MBA for employers? For Dr Sabri Challah, director responsible for MBA recruitment at Deloitte Consulting, there are a number of dimensions. “First, an MBA provides a very good general business training. Second, it is acts as a maturing process for people who have had some business experience.” This, he says, probably comes from interaction with students from a wide range of backgrounds and cultures.
“This is very valuable for consultancies because of the need for interaction with clients.”
There are also operational benefits in recruiting MBAs, says Challah.
“You are hiring an individual who, depending on the school, has a brand recognised by major clients as a measure of quality and talent.”
The employer also benefits from the networking between business school alumni, he adds. “An individual may have perhaps 100 colleagues who will go on to become leaders – that is an incredibly valuable network.”
The rigorous screening criteria of the business schools also gives the employer some quality guarantee, while an established relationship with a business school is also valuable.
Deloitte Consulting is typical of many consulting firms in that it is committed to MBA recruitment. “It is an important part of our experienced hire programme,” says Challah.
The firm has a multinational team tasked with global MBA recruitment and and focuses on the leading schools such as Insead, LBS, Harvard, Kellogg and Wharton, which have a genuinely international student body. Deloitte targets IMD as a regional centre while national schools include Stamford, Columbia and Cranfield and would supply local practices. Deloitte aims to recruit several hundred MBAs a year, says Challah, and would take many more if it could find them. “MBA training is very well suited to generating potential consultants and it is a very competitive market,” he says.
“But we’re not prepared to compromise on quality – we’re interested in the top 20 percent of students.”
He adds: “Candidates have to fit our culture and the way we deliver client services. We are very results oriented, hands-on and focused on teaming with clients. We want people who can develop close working relationships with clients at different levels of the organisation.”
Firms like Ernst & Young, however, operate a different model. Says Nicolas Mabin, director of recruitment of Ernst & Young, MCS: “We value people primarily for the experience they bring with them. We don’t have an MBA entry point per se – we don’t recruit people because they are MBAs as McKinsey or Boston do.”
E&Y’s recruits graduates, new consultants with five to 10 years experience, and experienced consultants from competitors.
“We feel experience is paramount,” says Mabin. “Our clients rather enjoy working with people who have been at the coalface in their industry or in their particular function.” An MBA, though, is obviously extremely helpful, he says, and around 15 percent of the firm’s consultants have them.
However, the firm does have a number of initiatives aimed at experienced people with MBAs. For example, it holds an international MBAs recruiting event at Dallas in the US every year, where 150 foreign nationals studying in the US and selected on the basis of their experience are invited to interviews with Ernst & Young people from their home country.
The firm also has a very close relationship with Henley Management College, with which it has just set up an initiative called Virtual Business School, through which E&Y people can pursue an MBA or similar qualification.
Mabin thinks that it is wrong to encourage people to switch career tracks on the back of an MBA. “Moving from engineering into finance, for example, is incredibly difficult. People do make that switch but an MBA used to reinforce a current career path is more effective and more powerful,” he says.
Russell Kyte, principal in the IBM Consulting Group and a member of the Management Consultancies Association’s HR and Personnel discussion group, agrees that experience is very important. “For MBAs to be successful in consultancy they need more than the average industry experience: a minimum of five years,” he says. “It is difficult to put people with limited experience into consultancy engagements and in front of clients.”
The amount of training required depends on whether an MBA is returning to the industry in which he or she has experience. “If that is the case the consultant should be up and running relatively quickly. But if they want to change direction it could take three or four years to get up to speed.”
He points out, though, that high quality MBAs should be able to adapt and move forward. “We are looking for the characteristics of the individual as much as their industry experience when we recruit them. The ability to interact with clients is paramount.”
Mary Huntington is a freelance journalist
Wide horizons: international MBA pays off for Deloitte Consulting’s Christine Bella
After a business degree from Wharton and two years with Booz.Allen Hamilton, Christine Bella decided to do an MBA at Insead in France. She reasoned that an MBA would fast track her career, and going to a business school which specialises in international management, would widen her horizons. “I wanted to work more internationally.” She wasn’t disappointed on either count. “I am now a manager and at 27 that is not normally possible.
And the programme immediately gave me a network of contacts on a global scale.” Although Booz.Allen would have picked up the tab for her MBA, Bella opted to join another firm, Deloitte Consulting, because its culture suited her better. “Deloitte listens to the priorities of staff and how they would like to see their career path develop rather than just putting them on assignments as they come up.”
The downside was that she had to bear the brunt of the MBA costs but she managed to negotiate an enhanced sign-on bonus from her new employer.
Since then she has spent two and a half years working out of London and has just transferred to Paris as part of a formal exchange programme.
Her MBA, she says, has enhanced her vision and understanding of the business world and the role of corporations in society and it has enhanced her technical and analysis skills. Insead itself provides her with an invaluable research and thought leadership base and her network of international colleagues is very useful, both in business and socially. “When I go on business trips I can always meet up with someone for dinner, which is nice when you are away from home.”
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