Breaking consultant hiring news – the future for MBA hires at top consulting firms appears uncertain. First reported by the Wall Street Journal, renowned consulting firms McKinsey & Company, Bain & Company, and Boston Consulting Group are postponing start dates for some of their new MBA recruits to 2024.
Let’s look at the factors behind these delays, how the firms are approaching them, and what it all means for you, the aspiring consultant.
Why Did McKinsey and Bain Delay Start Dates?
This unexpected turn of events comes as somewhat of a surprise considering the recent boom in the consulting industry post Covid-19. However, there have been indications in recent months of an impending slowdown in consulting hiring – and it looks like it has arrived.
First, McKinsey announced that it would cut around 4% of its global workforce, then Accenture followed by trimming 19,000 non-billable roles (~2.5% of the global workforce). Recently, EY announced plans to cut approximately 3,000 U.S. employees, while KPMG laid off several hundred people in its consulting division earlier this year.
Add that to the fact that the Big Four firms – Deloitte, EY, KPMG, and PwC – have experienced an over 50% year over year decline in job postings as reported in an analysis conducted by William Blair & Co. and it seems consulting isn’t as recession-proof as many had previously thought. As demand for consulting services slips and the price tag of MBA talent remains high, MBB are deferring some 2023 start dates to 2024 in the hopes that demand for services will have picked up by that time.
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How This Affects MBAs with Delayed Start Dates
The firms are doing their best to reduce the anxiety created by these delayed start dates.
Bain is offering generous incentives for those willing to postpone their start dates until April 2024. The firm, in communications obtained by the Wall Street Journal, is encouraging new MBA hires to pursue new interests between now and their in-limbo start dates. These include incentives between $20,000 and $40,000 to work for a non-profit, learn a new language, join an educational program, instruct yoga, and even embark on an African safari!
BCG has provided more clear communication to its MBA hires. The firm will stagger start dates between the 2nd half of 2023 to January 2024, meaning the latest a new MBA hire at BCG can expect to start is the beginning of January.
Meanwhile, McKinsey has left many MBA hires without start dates. The company has informed recruits that they can expect to begin their new roles anytime from shortly after graduation through February 2024. The firm has committed to providing at least two months’ notice, and Lisa Hurst, McKinsey’s director of talent attraction for the Americas, anticipates that students will be notified of start dates soon.
What Does This Mean for the Consulting Industry and You?
With all that’s taken place in recent weeks, it’s clear that the consulting industry as a whole is now taking a more measured, even cautious approach to hiring as opposed to the hiring frenzy we saw during Covid-19.
We anticipate that consulting firms will throttle down on hiring at the more expensive post-MBA levels, including for experienced hires. However, no offers will be rescinded and hiring will not completely stop. This does mean that competition for these post-MBA positions will likely be even more competitive than before. Candidates will need to ensure they pull no punches to set themselves apart in the recruitment process this fall and beyond.
We expect entry-level hiring (e.g., at the undergraduate and Masters level) to continue at a pace similar to the past three years. Firms need to keep talent pipelines replenished – especially the lower-priced analyst-type talent that make up the bulk of hiring each year. If this is you, stay the course by making sure your application docs (resume/cover letter) are strong and you start preparing for the case interview at least 8 weeks in advance of anticipated interviews.