Hi, share your knowledge with the community!

Number of Applications McKinsey Receives Per Year

sithan

Just wanted to know if this is how you would solve this estimation question.

# Applicants = # Vacancies x (100 / Acceptance Rate)

# Vacancies = # Consultants / Typical Length of Employment

*****Fast Method*****

Assumptions

  1. # Consultants = 8000
  2. Typical Length of Stay = 4 years
  3. Acceptance Rate = 3%

# Vacancies = / 4 = 2000

# Applicants = 2000 x (100/3) = 67000 Applicants per Year

*****More Granular Method*****

3 Staff Levels (Junior, Mid and Senior)

Additional Assumptions

  1. % Junior Consultants = 60%
    1. # Junior Consultants = 4800
    2. Typical Length of Employment = 3 years
    3. Acceptance Rate = 3%
  1. % Mid-Level Consultants = 30%
    1. # Mid-Level Consultants = 2400
    2. Typical Length of Employment = 6 years
    3. Acceptance Rate = 10% (since fewer people apply for these roles)
  1. % Senior Consultants = 10%
    1. # Senior-Level Consultants = 800
    2. Typical Length of Employment = 10 years
    3. Acceptance Rate = 60% (since way fewer people apply for these roles)

# Junior Applicants = (4800/3) x (100/3) = 52,800 Applicants per Year

# Mid-Level Applicants = (2400/6) x (100/10) = 4000 Applicants per Year

# Senior Applicants = (800/10) x (100/60) = 132 Applicants per Year

Total = Around 57k applicants

  • Upvotes
  • Date ascending
  • Date descending
Nuno replied on 04/04/2017

No expert by any means but in an estimation question is always good to end with a sanity check.

In this case, the sanity check could be that according to Dominic Barton (McKinsey's global managing partner) McK receives around 200,000 applications per year (this data is well known).

That being said, the obtained result is rather low which means one or more assumptions are wrong.

Like Andrés said, average time consultant is usually around 2 years. Also, acceptance rate according to Dominic Barton is closer to 1% (usually 1.1 or 1.2%). Taking into consideration these two revisions your final value gets much closer to the real number.

Manuel Andrés replied on 04/03/2017

Nice approach! however, I think I would revise my assumption of the average time a consultant remains at the firm. I have heard from MCK consultants (Switzerland) that the average is more around 2 years, which should be similar for the MBB firms.

Anonymous A replied on 04/05/2017

I think your answer relies too heavily on what you know already. A better approach would be to assume nothing and work your way towards it.

e.g. add 1 + 2

1. #target MBA schools x avg. # students per target school x % apply x 2 (to account for those who are from non-target schools, but still apply)

2. #target undergrad schools x avg. # students per target school x % apply x 2 (to account for those who are from non-target schools, but still apply)

Related case(s)

From online to offline

Solved 500+ times | Rating: (4.3 / 5.0)

We are thinking of establishing a door-to-door distribution of an existing online newspaper in Kolkata, India. We haven't spent much time on how the process would work in practice yet. Can you help us evaluate the feasibilty of the plan? Open whole case