Current Situation for Consulting

Hi there,

Hiring is definitely slowing down globally at the moment, however, it's not fully dead yet in most countries.

I want to share 3 observations.

Personal experience

Some of my clients' interviews (all in MBB) were already rescheduled from 2022 to 2023. They were supposed to be last year and they already had dates set.

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.

Cheers,

Florian

Hi there,

I think this is an interesting question that may be relevant for many people. I would be happy to share my thoughts on it:

• The decision to join a consulting firm during a time of economic uncertainty, such as the current situation, is a personal one and should be based on your individual circumstances and career goals. However, it's worth noting that the recent layoffs that have occurred globally are mainly in those industries that have experienced tremendous growth during the COVID-19 crisis, such as e-commerce and technology. Additionally, it's also important to note that these layoffs by no means make up for the workforce growth in those COVID-19 crisis years. Therefore, speaking of "global layoffs" may be an exaggeration.
• It's true that consulting firms may experience layoffs as well, but it's also worth noting that consulting firms tend to be more agile and adaptable to changes in the market. They often help their clients navigate through difficult times by providing strategic advice and solutions. As a result, consulting firms may be more resilient to market changes than other industries.
• Additionally, consulting firms are often in high demand during tough economic times as companies look for ways to cut costs and improve efficiency. So, there is a potential for job security.
• It's important to consider the long-term potential of the position and the company, as well as your own career goals and interests. It's also important to weigh the offer from the boutique consulting firm against your current comfortable industry, as well as other job options, before making a final decision.

If you would like a more detailed discussion on how to address your specific situation, please don't hesitate to contact me directly.

Best,

Hagen

Hi there,

Congratulations on the offer. In terms of your question:

Q: With the current prevalent layoffs that occur globally, is it a good idea to join consulting firm? My fear will be that consulting firms might follow suit and as I am currently in a comfortable industry (but have an offer in hand at a boutique consulting firm).

It depends.

1. What are your goals? Can the boutique allow to reach that faster?
2. What is the general reputation of the boutique in terms of growth/layoffs? Most big consulting companies defer hiring to avoid layoffs later on. For boutiques, it could be more difficult to plan that

We would need more information for a proper answer but overall if your due diligence suggests the boutique is solid AND it allows you to reach your goal faster it could make sense to move there.

Best,

Francesco

Hi there,

To answer your question first: 2023 is still a great time to join consulting, especially if you are fresh out of undergrad/MBA.

1. For consulting firms, chaos means opportunity

As the business world gets more turbulent and uncertain, while some companies need to cut their budget on consulting projects, others are eagerly trying to figure out how to navigate in the new world and they turn to consulting firms. Also most consulting firms have fewer projects now, the consulting industry is not nearly as impacted compared to many other industries.

2. Consulting as a whole may take a hit, but you won't

Most consulting firms push their employees to never be complacent with their current position and capabilities and always strive to move to the next level, or what some may call “up or out” culture. In order to keep the blood flowing and push the low performers out, there is always a big demand for new hires who join this industry with starry eyes and full enthusiasm. Also, consulting firms have a need to maintain relationship with their feeder schools (think top MBA programs) and hiring won't significantly decline anytime soon.

To summarize, it's still a great time to join consulting. Current situation may get some partners worried, but you shouldn't.

Hi there,

We can't tell you what to do in this regards as it makes us liable.

Ultimately, you need to figure out your risk threshold.

A risk-reward framework would be good to use here!

I know nothing about your current firm or industry, nor your region.

If you're in the auto industry in Russia, obviously consulting is safer. If you're in cybersecurity in the US, you're likely safer than consulting.

A boutique consulting firm that advises tech VCs is probably not a great idea. A boutique consulting firm that is all public sector is probably safe (big gov. spending packages).

In my view, you are right to be risk-off in the current environment (I would be). However, you need to evaluate your country, your current job/industry, and the boutique.

Please also remember that consulting firms are non-cyclical. Companies hire in boom times and also in downturns. They don't hire during transition periods. Also remember that smaller firms are more at risk.

Hope this helps, and if you really want professional advice that can dramatically and permanently affect your career + earnings, maybe invest in a coach!

Hello,

Agree with Florian here. But this is quite geography dependent. 

I can share with you that Consulting in the Middle East is booming! There's a lot of transformation happening in the Middle East and thus consulting firms are hiring aggressively in Dubai, Doha and Riyadh. Of course, as more and more people from Europe are now applying to the Middle East, this is getting super competitive as well.

If this is a market where you are interested in working, then this is quite insulated from the recession :)

Feel free to reach out to me via chat if you have any further questions regarding consulting in the middle east!

Best,

Rushabh

Hi there,

There's two questions here:

• Should you join consulting as an industry?
• Should you join the particular firm that made you an offer?

Those are different questions. Consulting as an industry may suffer in some areas (e.g. Growth projects) but thrive in others (e.g. M&A, turnaround, etc.) during the downward cycle. However, as others pointed out, you can generally set yourself up for a successful career even during a downturn.

As for the particular firm that made you an offer, it depends on their client and project portfolio. If they focus on Growth, not great. If their limited list of clients cut consulting spend from this year's budget, also not great. If they have a reputation for being reckless with their talents, run. However, if they specialize in helping companies during difficult times such as this one, you're golden.

Hope you see my point. Best of luck!

Hi! Joining a consulting firm can be a great opportunity for those looking to gain valuable experience and develop a diverse set of skills. While layoffs can be a concern in any industry, consulting firms are often better positioned to weather economic downturns due to their ability to adapt to changing market conditions and their focus on delivering value to clients. Additionally, boutique consulting firms may offer more opportunities for career growth and development as compared to larger firms.

It's also worth noting that while the current situation is uncertain, it is also a time of change and opportunity. Many companies are looking to consultancies for support to navigate the challenges and to develop new strategies and ideas.

Ultimately, the decision to join a consulting firm should be based on your personal career goals and aspirations, and whether the firm's values and culture align with yours. I recommend taking the time to research the firm and speaking with current and former employees to get a better sense of what it's like to work there.

Also, if you have an offer in hand and if you feel you're ready for a new challenge and learning then this could be a good decision for you.

_______________________

Dr. Sidi Koné 

(Former Senior Engagement Manager and Interviewer at McKinsey | Former Senior Consultant and Interviewer at BCG)

(edited)

Its not just Consulting, but most industries are going to be impacted & will continue to do so specially in Western economies.

The decision depends on the worth of the opportunity at hand and your risk apetite. Look at these carefully before you decide. For our generation, job security (specially in service industries such as Consulting) is a thing of the past. We live in an increasingly volatile economic setup and no job is secure and comes with risk.

All the best.

If they are hiring, they need people… Having said this, there are niches where they need people. You just need to assess the specific company and industry focus. This is “due diligence” time (on the specific firm). Generic advice won't be of much help.

If you have an offer in hand, a potential recession should not worry you, especially if consulting is your long-term goal. 

Consulting firms still will hire talent in a recession to be ready to bounce back after. Sure, it is harder to get a position and the bar to progress is higher. No reward without risk.