Overall Economic Situtation

Hey there,

Personal experience

Some of my clients' interviews were already rescheduled for next year.

Impact on hiring

While for all firms fewer people make it through resume screening, only some firms adjust the bar for the interviews. The latter are happy to find enough people to make it through the selection process. In that case, they would extend offers, potentially with starting dates further in the future.

We might even see a full hiring stop, depending on how bad the situation becomes.

Impact on engagements and job security

External advisor spending is usually one of the first expenses to be cut during an economic crisis.

Yes, recovery and transformation projects increase, but every other consulting vertical decreases by much more. I have been told stories from 2008/09, where new hires were not staffed for 6 months and then let go without ever having worked on an actual engagement. 

It all depends on how bad the global economic situation is going to get. My hunch is we see a partial to full-hiring stop by early next year for a couple of months up to 1 year. Let's hope I am wrong :-)

On top of that, keep in mind that tech firms and other industries already started their lay-offs, which means that the potential supply of job seekers increases even more compared to now lower demand for them.

At this point, it definitely pays off to work very hard to get through as well as have valid backup options available, potentially for industries that are less affected by external events (e.g., pharmaceuticals)

Cheers,

Florian

Hi there,

For my subsequent answer please recognize that my viewpoint is just one viewpoint. There are countless consulting companies, offices, country-specific situations, macro-economic factors that are all going to change outcomes.

In general, in a recession, you want to be in “risk-off” mode. Always have your resume up-to-date, always make sure to maintain your network. When considering offers, make sure to get offers in writing, and don't leave a current good situation until things are fully locked in.

Remember that tech was always going to crash. Interest rates were 0, growth was “free” and we had all the tell-tale signs of a repeat of the Dotcom crash. Uber, Twitter, etc. weren't making money.

Consulting is a different industry. It's “non-cyclical”. In recessions, companies hire consultancies to cut costs/re-structure/survive. In boom times they hire consultancies to grow more. Consulting also has very high churn - meaning, even if there isn't growth (they stay flat), they still have to hire to replace employees.

Now, consultancies “tend to” have hiring pauses/freezes in the state of transition (early covid, right now w/ interest rate shocks, etc.). That's what we're seeing now.

Additionally, in general, larger, more established, well-branded companies tend to be less at risk of firing employees and reneging on contracts. MBB is highly unlikely to renege on a signed contract. Tier 2 and boutiques are more likely to.

The “worst case scenario”, generally, for MBB is that your start date would be delayed. I have never heard of a contract flat out reneged by them.

TLDR: MBB is generally safe…you are in the “safest” position you could be.

Hi there, 

I understand your concern. There is a lot of uncertainty in the air at the moment. 

Specifically for your situation, as long as you received and offer and signed it, the chances of a large firm turning their back on an offer are small to insignificant. 

Then, the other thing to consider is that consulting companies tend to benefit from both boom and crash times, helping client with either taking advantage of a growth situation or reacting to a difficult situation. What's fair to acknowledge however, is that these firms do become more cautious like everyone else in the economy, so they might be as bold with their hiring targets as in previous years. 

Best,

Cristian

What the consulting firms have learnt is that you need to retain talent - and bring in new talent - during downturns. 2008 was an example of this - although the hiring contracted in the firms, many people were still retained even without a large number of projects so that the work could resume as soon as the economy picked up.

One you thing you should consider is that during recessions there is a lot of work for consulting - especially for MBB. There is, really unfortunately, a lot of restructuring work to do and often new strategies to be set. Companies tend to flock to the really well known firms to do this work as they need to do it well. 

Try not to worry, but do keep in touch with HR especially to calm your nerves if you want to know what they're planning. 

Good luck!

Tech and consulting are significantly different.
2008 is another story.

Now some firms and some offices show a slowdown in hiring. I expect it will be over at the beginning of the year, so in your case, there is no need to worry.

Beyond that, consulting is anti-cyclical, and in particular, BCG is well-equipped to profit from more turnarounds and even special situation projects. 

 

Hi there, 

economic crisis are a great opportunities for consulting: when companies struggles, MBB are very fast in adapting to current situations and commercial approach so they can actually grow even in those challenging for many firms situations. The best example is COVID. 

So dont worry, you will have plenty of work!

Lucie

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