What is the impact of COVID on consulting industry? Is it the right time to apply?
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Hi,
It highly depends on your location, company preferences, position. I can explain it in the following way:
Firms:
- MBB: less affected, interviews are still conducted, offers are issued for Q3 and Q4 2020 and Q1 2021; companies still have business and enough liquidity to survive; some offices expect to grow in terms of revenue for 2020
- Tier 2: highly affected, the general trend is that interviews are postponed, the majority of firms do not issue offers, some firms experience liquidity gaps and cut FTE or ask employees to take an unpaid leave
- BIG 4: less affected, advisory business experiences problems, but recurring revenue from Tax and Audit allows to manage through temporary uncertainty
Geographic coverage:
- USA: the strongest market for consulting, interviews are conducted, offers are issued, consulting revenues might even grow
- Europe: consulting is affected, but is expected to recover in Q3 and Q4
- CIS: consulting is affected, MBB and BIG 4 will survive, as well as Accenture, but boutiques have liquidity problems
- Asia: consulting revenues begin to recover, but Hong Kong political crisis still creates uncertainty around Financial sector and transportation (that affects consulting revenues from these industries)
- Middle East: MBB firms still conduct interviews, consulting business starts to recover slowly, low oil prices still slow down the economy
- Latin America: no info
- Australia: no info
Positions:
- Interns: affected, interns is a long term game for consulting firms (as well as a way to handle “monkey” tasks) and consulting firms at the moment are not super focuses on long term investments
- Junior and middle management: less affected, hiring is in progress across MBB and Big 4
- Principals & partners: less affected, consulting firms still look for experienced leaders
Programs:
- Summer programs: the majority of programs are cancelled, bad news
- Full time: highly depends on other factors
Career tracks:
- Generalists: generally affected as consulting firms currently have more demand towards digital and data driven projects
- Industry focused experts: depends on the industry, but oil and gas industry is affected
- Digital experts: almost not affected, high demand for digital projects and the supply of experts is weak
- Data scientists: not affected at all, consulting firms are heavily hiring data scientists
Hope this helps!
Anton
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Hi there,
This is a great question and has a lot of elements to it! View this post as your one-stop shop to all the imapcts of COVID-19 on Consulting!
________________________________________________________________
INTERVIEW FORMATS
Most interviews will now be virtual. They may also involve COVID-19 as a topic!
For Virtual Interview Tips:
https://www.preplounge.com/en/consulting-forum/virtual-first-round-interview-thoughts-advice-4310
For Coronavirus Cases:
_____________________________________________________________________
PUSHED STARTING DATES
A number of existing offers as well as future offers are coming with delayed start dates.
https://www.preplounge.com/en/consulting-forum/pushed-starting-date-6807
https://www.preplounge.com/en/consulting-forum/semester-extension-due-to-covid-19-6724
https://www.preplounge.com/en/consulting-forum/mckinsey-offer-pushback-covid19-6768
https://www.preplounge.com/en/consulting-forum/mck-associate-job-offer-6737
(If this happens, use the time to both upskill and find a 2nd job/internship in the meantime)
____________________________________________________________
REDUNDANCIES RISK
https://www.preplounge.com/en/consulting-forum/covid19-redundancies-risk-6728
Some of the tier two firms are cutting costs through:
- Setting pay to 80%, with an opt-out policy (KPMG)
- Letting go of some staff with <6 months tenure (EY)
- Forcing unpaid leave for staff not on billable projects (Deloitte)
- Stopping bonuses
So far, it seems the tier 1 firms are cutting some bonuses and being stricter with the "Up or out" system. It seems unlikely they would rescind new hire offers, but you should always have a plan B.
Al this being said different geographies are different, as are different roles...even in tough times companies do hire and projects are won.
______________________________________________________________________
DELAYED AND REDUCED HIRING
There are a lot of companies, a lot of offices, with a lot of different timelines. I recommend you reach out to the recruiters of the offices + companies in which you are interested! This had the added benefit of you potentially being put in touch with a potential referee!
Take the initiative, reach out to the offices/companies you want, hustle hard, and find the jobs that are available and fight for them. Don't speculate...read the cards TODAY and operate as such, until something changes, then adapt.
____________________________________________________________________
THREAT TO THE BUSINESS MODEL
The top-tier firms are very nimble. They are notoriously "immune" to economic cycles. This Is because:
- When the economy does well, MBB are hired to help companies do even better
- When the economy does poorly, MBB are hired to help companies survive (cost costs, adapt, plan for the new world)
I can tell you that MBB are hustling hard and that when companies are in trouble, they look to MBB first for guidance. Strategy consultants help firms navigate uncharted territory...these times are when they're most needed
_____________________________________________________________________
IMPACT ON TRAVEL
https://www.preplounge.com/en/consulting-forum/less-traveling-in-the-mena-region-6770
1) Yes it will affect the nature of work
2) I can't see it improving work-life balance. The fundamentals of top-tier companies in any industry are: Get the best, get the brightest, get the hungriest, charge them out for a lot, and work them hard
3) It'll change business trips in much the same way business trips will be changed across the world
4) It's anyone's guess as to whether WFH will become more acceptable in consulting. Personally, I doubt it.
__________________________________________________________________
IMPACT ON M&A ACTIVITY
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Hi
In the short term, consulting firmw, like other companies, had to adapt to confinement / lockdown and review the modes of interaction, internally and with clients. I observe that many good practices are emerging from this crisis: particularly around teleworking and collaborative digital tools. Many of these practices are expected to continue, and that’s a good thing!
From a business point of view, the top priority for companies has been to manage the continuity of their activities while respecting health regulations to protect their employees. As a result of the crisis, the project dynamic slowed down and many consulting firms therefore observed a drop in the sales backlog after mid-March in Europe, a bit later in the US. However, once the brunt of the crisis has passed (soon hopefully), business transformation will not end and consulting firms will always be the best partners to help carry out these transformations. While the industry explosion of the past 10 years is likely to be a halt, I’m not particularly concerned in the medium term
Hope it helps.
David
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Hi Anonymous,
I assume you refer to the business side of the question - how COVID impacts the consulting business.
Short-term: For now it's too early to say since it's new situation for all players and most countries are affected only for 2-3 months by now. Recruiting and projects go on, partly with very limited scope but still. Doesn't look that bad though.
Historically, consulting industry works well whenever there is a clear upward or downward trend. In terms of uncertainty however, generally speaking clients tend to hold back budgets and go into a "wait and see" position, once they have more visibility themselves.
Middle-term: Apart from the further unknown development of the desease, another major cumbersome issue for the next few years will be also the world's economic development. This trend is facing downwards looking at the real economic development in most regions; the stock exchange is still kept high with basically unlimited amounts of central bank money, which is a first-time-ever experiment and nobody knows how this will turn out either.
Summary: Major unknowns, for now it's pure speculation. We need to see how those 2 major drivers develop over time and react accordingly.
Hope that helps - if so, please be so kind and give it a thumbs-up with the green upvote button below!
Robert
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Hello!
On top of what´s been shared, above I leave you a business case regaring the impact of the COVID19 crisis -in this case, in the Aerospace industry-.
Hope it helps, feedback welcomed!
Cheers,
Clara
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Dear A,
Generally speaking, spring 2020 was a bad time to applying in consulting companies due to COVID situation, since only McKinsiey is only continue to hire. Most of the other companies which includes ABCED and of cou, auditing prospective, including Bain, BCG, Kearney, Strategy&, Oliver Wymann have actually paused and postponed the recruiting. As for now I already see that some of the company that specializ on restructuring and cost-cutting management organization ans well as digitisation have resumed the hiring. So the winners are Roland Berger, Alix Partners and Alvares Marsal. These three companies have been active in recruiting and actively searching for the candidates worldwide. In general, I could also say that the market in China and South Eastern Asia has been now recovering, when the companies resumed the hiring practice.
As the pandemic is almost over, I expect that there will be first small movements towards recruiting for the most of the companies in the majority of regions. In Europe, US, Middle East. Especially for the Middle East, when Ramadan is over I expect the hiring to pick up soon.
And of course, most of the hiring will intensify after the summer break in September-October.
I would advise to you to intensify the networking activities and secure the referrals for your future interviews
If you need any help, I'm happy to help you.
Best,
André
(edited)
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Hi there,
in terms of recruiting, as you probably already know, the majority of the companies postponed interviews and starting dates after the summer due to the current uncertainty and lack of projects.
As for the time to apply, I would do so at the moment only if you have a strong referral that can also advise on the optimal timeline to do so as it is office-specific. You can find more on that at the following link:
https://www.preplounge.com/en/consulting-forum/hey-everyonehope-all-is-well-3176
Best,
Francesco
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