MBAs in the Consulting Industry Part 3

This is part three of the special three part series on MBA’s in the consulting industry, brought to you by MBA Podcaster and the Graduate Management Admission Council. In this podcast, you’ll hear from a panel of recruiters from three top consulting companies who will be discussing the employment outlook for the industry. If you’ve missed parts one and two or want to learn more about this special series on consulting you can always visit our website mbapodcaster.com.

Hi again, I’m Mark Bisnow of Bisnow on Business here in Washington D.C. and I’m speaking today on behalf of the Graduate Management Admission Council which administers the GMAT and welcoming you to the third in our series of podcasts on the MBA in Consulting about working in the consulting industry, especially for those of you who either have MBAs or are thinking of getting them.

We’re delighted to be rejoined by our three experts in the consulting industry, Richard Wallan of Watson Wyatt Worldwide, Peter Sullivan, Booz Allen Hamilton and Rich Schneider of Deloitte Consulting. The third topic for this podcast as we have promised is what’s the actual employment outlook for the consulting industry as far as we can see it at this point. I’m going to go through the panel, ask them to say hello and tell us, you know how many people are you looking for and what particular kinds of people.

Let’s start with Richard Wallan who directs MBA recruiting for Watson Wyatt Worldwide in Washington, my gosh that’s four w’s in a row. Good afternoon Richard. “Hello and Watson Wyatt is an actuarial firm and as such are future is somewhat questionable, there’s a lot of pension reform which is a large part of our business and we are having trouble competing for people with that skill set because they’re worried about the future of pensions. We would say though that as is anything including the market, everything is cyclical and we expect that as baby boomers retire and pensions again become in fashion as a tool for recruiting and retaining top talent that there’s a great future there. None the less, our future looks pretty good again we’re a mid sized firm.” Mid sized I think you said being about 6,000 people? “Correct. And we’re looking to grow our target markets here in our local markets across the country and there is just a great deal of opportunity there to either do more business with our existing clients or to take on new clients. So if you’re up for the challenge for helping us beat some of our competitors, some of which are sitting at this table. You can certainly look at our website and you can see there are a great many jobs posted there and we welcome your application.” And the kind of people that you are looking for at Watson Wyatt Worldwide are these, if you can generalize, quantitative people who know what actuarial means or who are they?

“Well if you can even say actuarial without stumbling over it like I do several times a day you’ll know that yes we are very quantitative, we run with numbers and so we are looking for people who are very comfortable working with numbers.”

Peter Sullivan at Booz Allen Hamilton based in Washington how many people are you guys looking for? You know how’s the growth prospects look and what kind of people? “Yeah, thanks Mark. We’ve been growing for the last decade or so at a 10-15% clip each year even during the corporate consulting down turn after the dot.com bubble burst we were still growing thanks to our public sector business. But now we’re hitting in all cylinders really. This year we will be looking to hire about 100 to 150 full-time MBAs and another about 100 summer interns that would be MBAs between their first and second years. We very much use internships as a pipeline for offers for full-time employment most but all of our interns do in fact get offers to return with us full-time. The type of person we’re looking for not unlike my colleagues here is very much going to be a renaissance type of person, someone who is comfortable in a quantitative environment, has leadership skills, the skills to both lead and inspire client and colleagues, a great communicator. So let me give just a short quick example that hopefully will make the qualities we’re seeking a bit more tangible. Let’s picture the first week at MBA school when six new first year MBAs have been assigned by the professor to a study group but it’s a wonderfully diverse group, different ethnicities and races and genders and geographies represented and the group is struggling to figure out what their project might be and everyone is being way way way to polite because it’s the first day and no one wants to be labeled as that guy in the study group so as a result the conversation is meandering and not a lot of progress is being made and at some point one of the six students gets a marker stands up to the white board and just starts organizing the team. They may not be directing all the content and if they are they are probably doing it stealthfully but they are organizing and structuring the conversation and ideally after 20 minutes of leading that group, they offer the pen to someone else and sit down so that they’re not kind of the automatic defacto leader. That’s the person that Booz Allen wants to hire.” Very interesting.

And Rich Schneider, are you going to try to get your hands on that person first? What are you guys looking for? “Absolutely. We’re all looking for the same guy and they are few and far between quite honestly but just to back up for a second we are growing quite rapidly.” This is at Deloitte Consulting, “At Deloitte Consulting, yes. We’ve been growing at 16-17% over the last four or five years and have just continued to see that trend continue to explode. We will be hiring similar numbers to what Peter described at Booz Allen. We will be looking for between 100 and 150 full-time MBAs this year, between 75 and 100 summer interns and that is something that we consider a major pipeline to continue to fuel the growth that we’ve experience. In terms of the people that we are looking for, we do value experience heavily. We typically would be looking for someone with a minimum of three to four years of experience prior to coming back to business school. We look for people who really understand how large organizations work, how to get things done in large organizations, people who have demonstrated that they can be effective in large organizations. They’re the ones who got the promotions out of their peer group basically before they went back to business school. They’re the ones that have the track record that you can point to, demonstrated and sustained prior to when they came to business school so we will look for those folks to be able to translate those capabilities into the consulting environment and we want to teach them how to be a good consultant.”

Now for those of us who may find the consulting industry to be a bit of a blur, can you help us differentiate the sub groups within consulting and how the employment outlook may differ among them? Are there particular kinds of consulting specialties that you can identify that are considered hot today? If you have a choice maybe you would advise people just generally to beef up their appropriate skills like quantitative and their people skills and so on but if you could start thinking along the lines of you know something, a sub specialty that is going to put you in good stead for your future employment, would you advise that and what would that be? Does it break out into particular fields or am I, is that premise wrong? “No there’s probably four or five big areas within the consulting environment. First of all, consulting is a big business, consulting is 150-175 billion dollar industry globally so there’s lots of room to maneuver in this environment. I would say without being the only sort of arbiter or this one but I would say there is probably four or five big areas of consulting, one is the pure technology in outsourcing firms such as Excenture, IBM and so forth and people that are very heavy into technology implementation that those kinds of firms.” And the outlook there? “I would say moderate, probably more on the 7-8% range as compared to the higher growth end of things.” Okay and what’s “I would say there’s a broad contingent in what I will just call human resource and human capital firms. I think, Richard you’re firm probably is pretty heavily focused on that, but there are and number of others that are involved in organization, compensation, benefits, that sort of thing. I honestly don’t know the outlook on that in terms of growth but I suspect it is pretty robust as well.” I’m going to ask Richard in a moment. “I would say that the third broad category of consulting firms is what I would call the advisory consulting firms and I would suggest that people such as Booz Allen Hamiliton, Bane BCG, McKenzie, Deloitte Consulting are involved in that business and our role in life if you will is to help clients come to terms with very tough business problems and help get them solutions to that. And that in my sense seems to be where the biggest growth in the industry is right now.” Kind of the advisory, the strategic high value. “It’s not just pie in the sky strategy; it’s literally helping people identify solutions to complex business problems that are strategic in nature and then working with them to actually cause performance improvement to happen in the company.”

“It’s not doing it’s studying and seeing if there is a market for it. It’s addressing a specific issue that a company is wrestling with. Some times it means the company’s life and that’s what firms like Deloitte and Booz Allen and plenty of others do. There’s also I would say kind of a set of smaller niche firms, boutique firms that kind either specialize on a certain industry like biotech or high tech or even telecom. There might be some regional flavors that someone who just consults to the Scandinavian market for example. And I would say to MBAs just do your homework on small firms. You don’t know the future necessarily of those as much as you do a larger firm. They could be overly dependant upon one person; they could get acquired just like any other small company. A lot of them do great work, they really do but just do an extra bit of due diligence if you’re going to strongly consider a boutique firm.”

Is government consulting by the way considered a big you know specialty or does it apply to all of these things? “I look at government as being one more industry. Really government, automotive, energy it’s another sector in which a consulting firm may or may not choose to play.”

“There can be some specific contracting rules that are unique”

“That’s true”

“Or economics based on how a government contracts are issued, but I agree with Peter it’s just another big industry that happens to be quite robust.”

Richard if you want to comment on the human capital as I think you might have at the very beginning of this but another thing I think that people have wondered is compared to other kinds of professions like investment banking, I mean that MBA students might think of how does the general growth outgrowth look for consulting. “I think quite strong. I think as other companies are looking for the expertise in areas that affect their bottom line versus taking a step in the dark they’re going to consult with people who do that and nothing else and so that they have the data and direction that will help them you know meet their goals.”

Why is it that? Go ahead, “This is Rich Schneider, I think it’s worth also taking a longer term perspective on the industry the management consulting industry is an industry that has grown at two to three times the gep for 30 years. It’s been a very consistently high growing industry but the only time we literally saw the industry shrink was in the 2001-2002-2003 period which was a real strategic thrill for the industry but that was literally the first time the industry had shrunk in the revenue in the 50 year history of the modern management consulting world. Since 2003 though it has been just very very robust, we can’t get enough good people.” And why is that? Just so we feel comfortable because you know you can never predict for sure what trends are going to be but just so people have an understanding of the context. “A lot of basic business drivers are employed for instance there’s a lot of merger and integration activity now. So the rm&a practice is one of the more significant practices. We are just involved in a very large number of very significant deals and that’s just happening in the economy now. Healthcare is a very robust industry now and we have a very large healthcare practice, so it is just fundamentals out there in the industrial environment are very favorable to the to what consultants do these days.”

What if you’re just starting in your two year MBA program, is it safe to predict that couple years from now there will still be a consulting industry Peter Sullivan? “Yes, pretty safe.” And you guys, you speak for your own companies and you’re growing, you have your challenges and everything, you have some cyclicality but at the moment things look pretty bright it sounds like. “Very.” “And it is a great time to be a MBA student. It’s a great time. Students to whom we make offers, gosh two years ago they probably had two or three offers, this year they’ll have four or five. It’s a great time to be a MBA student.” Are all the spoils of going to a small group of the most successful MBA students or even the medium students getting stuff? “Oh yeah, I mean you look at the stats and there’s some gaudy number of 90% of students have offers before they graduate so there are always some students that are more attractive to any industry but the vast majority of MBA students are very very talented and will have a lot of options.”

Well I have learned so much about the consulting industry. I’m thinking of hanging another shingle as a consultant on the consultant industry. You guys are fantastic to have spent this time with us. Rich Schneider leads Deloitte Consulting’s MBA campus recruiting program, Peter Sullivan is US director of people services at Booz Allen Hamiliton and oversees MBA recruiting for that firm and Richard Wallen directs MBA recruiting for Watson Wyatt Worldwide in Washington. I just like to say that, I would say that again accept I think our time is running out. We thank you so much for spending your time with us. I’m Mark Bisnel speaking for the Graduate Management Admission Council, thanks for joining us.

We hope you’ve enjoyed part three of this special three part series brought to you by MBA Podcaster and the Graduate Management Admission Council. If you’re interested in learning more about the series or want to listen to parts 1 and 2 visit our website mbapodcaster.com. I’m Janet Nakano for MBA podcaster, thanks for listening.

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Part I & II can be found here: MBAs in the Consulting Industry Part 1 & 2: Positioning Yourself for a Consulting Career