Executive Summary
The management consulting industry is experiencing both headwinds and tailwinds as we enter June 2025.
On the positive side of the ledger, we continue to see strong demand from commercial clients, especially in practice areas including digital transformation, supply chain resilience, cost optimization, and AI strategy. While demand for these services is distributed across sectors, Healthcare and Education continue to drive an outsized portion of it in 2025.
Overall, according to Source Global, the consulting market is expected to reach $371 billion in 2025. The big picture for the industry is overwhelmingly positive.
Still, we must acknowledge the headwinds. Government consulting contracts are being renegotiated (or drying up completely), leading to layoffs at firms like Accenture and Booz Allen Hamilton.
We've heard that one firm is cutting back on campus recruiting, preferring to onboard "entry level" consultants with at least 2 years of professional experience to flatten the learning curve. Other firms are prioritizing senior specialist hires, hoping these individuals can help build practices from the top-down (e.g, FTI Consulting's Business Transformation Practice in Europe, Slalom's Manufacturing Practice in the U.S.).
Key Changes from May:
- Our latest survey (results in Section 1 below) sheds light on where current consultants perceive the strengths and weaknesses of the market to be.
- The number of job openings in management consulting and corporate strategy on our Job Board continue to increase. There is no sign of labor market softening in the commercial segment of the industry, however, a handful of practice areas are driving the increase.
- Booz Allen Hamilton lays off 2,500 employees due to government consulting disruption.
- McKinsey completes 10% downsizing (no, they didn't pink slip everyone on one day).
- Top firms are expanding AI services partnerships (BCG with Pencil to scale AI ad creation, Bain with Palantir to deliver end-to-end AI transformation).
- BCG is shifting its target school mix.
- The competition for incoming MBA talent is in full swing as more firms roll out or expand their pre-MBA programs.
- Consulting Magazine will honor Top Consultants at an awards dinner in New York later this month. MC COO Namaan Mian is slated to speak, along with several other guests.
1. Industry Pulse: Economic and Market Drivers
Macroeconomic Conditions:
- There is a mismatch between U.S. consumer spending (hard data) and consumer sentiment (soft data), as we've discussed on our Market Outsiders podcast. Real personal consumption expenditure increased by 1.8% in Q1 2025 from the previous quarter. This was a positive sign for the economy, as first quarter spending is often the lowest of the four quarters (situated between holiday spending and summer travel season). However, consumers remain pessimistic on their economic outlook. As U.S. consumer spending accounts for ~70% of GDP, consulting firms will be watching closely to see if there continues to be a mismatch between what consumers do and what they say.
- Are tariffs (or the expectation of future tariffs) beginning to have their effect? The Personal Consumption Expenditures Price index rose 2.1% on a year-over-year basis in April.
- Economic uncertainty and a U.S. debt rating downgrade has led investors to sell off bonds, causing the demand for the dollar to go down and pushing its value lower. Long-term Treasury yields broke 5%, also contributing to the decline. The dollar is down ~1.5% in the past 30 days (as of print date).
- U.S. factory orders declined by 3.7% MOM in April, according to government data released on June 3. This was a larger decline than the consensus forecast of 3.1%.
Private Equity Activity:
- Private credit continues to explode as an asset class (and revenue generator) - with $2.2 trillion in AUM being added to the sector in just the last 5 years.
- Due to the relative dearth in deal-making, increased pressure to return capital to investors should lead to continued private lending deal flow.
Consulting Growth Areas:
- 100% of respondents in our latest consulting industry survey identified Technology / Digital Transformation and AI & Advanced Analytics as growth areas for their firm, and 80% of respondents said demand for services had increased in the last year.
- 80% of respondents also indicated that client budgets for consulting have increased in the past year, with most of that increase earmarked for cost reduction / efficiency projects. However, 80% also expect to experience more client price sensitivity in the next 12 months.
Consulting Weak Areas:
- Sustainability / ESG, M&A due diligence, and Change Management were most likely to be identified by respondents as slow growth (or declining) areas at their firm.
Are you currently working in management consulting? Take this month's Sentiment Survey.
2. Consulting Firm Activity Highlights
Bain & Company announced a partnership with Palantir, allowing it to leverage the big data analytics software in enterprise-level transformation projects.
BCG announced a partnership with Pencil, enabling it to bring AI-enabled ad creation capabilities to its clients.
BCG has also reportedly narrowed its list of target firms, removing some highly regarded public institutions (e.g., University of Michigan) from its target list.
Kearney announced its Tariff Planning Model in a sign of the times, saying the new integrated solution would allow companies to identify and mitigate tariff impacts.
Trinity Consultants acquired engineering and water planning consultancy Zanjero, diversifying its offerings to include the fast growing engineering consulting discipline (and previewing its expectation for increased government spending on water planning, especially in the Western U.S. and especially as AI data centers will require additional power sources, including hydroelectricity).
3. Talent Market Update
Hiring Trends:
- Lateral hiring remains strong for AI specialists, trade experts, education consultants, Oracle / Workday SMEs, and those with industrials / healthcare experience.
- Hiring in India is accelerating - in both client-facing and back-office functions.
- Sports consulting practices continue to outpace the market in terms of hiring.
- Campus recruiting begins this month; all MBB application deadlines are now published, and we expect interviews to begin in mid to late July.
In-Demand Skillsets:
- AI literacy and machine learning strategy
- Supply chain resilience
- Corporate restructuring and cost optimization
- Education policy
- Trade barrier / tariff proficiency
- Sports business experience
Salary Trends:
- Lateral candidates with AI or trade expertise can command a ~10% salary premium.
- Candidates recruiting through on-campus channels or those with non-premium experience have no room to negotiate.
Workplace Considerations:
- MC COO Namaan Mian recently spoke on the Bloomberg Talking Tax podcast to unpack the campus hiring plans of the Big 4.
- Many consultants have reported tightening performance standards across firms (including McKinsey) as firms use elevated standards to limit bonuses and increase attrition.
4. Consulting Skills in Demand
Technical:
- Hospital system procurement
- Cloud architecture
- Curriculum design
- Generative AI consulting frameworks
- Advanced analytics and data storytelling
- Supply chain digitalization and optimization
Soft Skills:
- Executive presence in virtual and hybrid settings
- Hypothesis-driven problem-solving
- Client relationship management in uncertain markets
5. Candidate Watch: Advice for Job Seekers
Focus on specialization as a lateral hire: Candidates who demonstrate expertise in AI, trade, or cost optimization have a stronger edge.
Prepare for hybrid interviews: Many first-round interviews remain virtual, but superdays and final rounds are increasingly in-person. Virtual interviews require you to be overly structured and overly communicative.
Expect digital assessments: Firms are increasingly asking candidates to solve digital assessments in advance of first round interview invites.
Students - begin prep now: Resume drops for undergraduate and specialty masters students targeting Summer 2026 start dates begin in this month. You should be 80% prepared for interviews by the time you apply.
Incoming MBAs: Apply for pre-MBA programs (e.g., L.E.K.) to get a leg up on the competition this fall
6. Regional Spotlights
North America:
- Nashville, Minneapolis, Chicago, and San Francisco show strong lateral hiring activity compared to the rest of the U.S.
- DC hiring has slowed to a crawl as public sector practices see reduced demand. The exception? Economic and litigation consulting firms (e.g., Bates White)
Europe:
- London market continues to see growth; financial services consulting in demand.
- Paris emerging as digital transformation hub.
Middle East:
- Dubai, Doha, Abu Dhabi, and Riyadh offices continue to see strong demand for consulting services (although lower than peak demand earlier this decade). Much of this demand is concentrated in infrastructure, energy, and economic diversification work.
Asia-Pacific:
- Manufacturing consulting firms continue to see uptick in demand in response to global trade environment.
- Local and regional technology consulting firms also seeing increased demand as some services spend shifts from the U.S. back to the region.
7. Future Outlook and Key Trends to Watch
What we wrote in May 2025 (below) continues to hold true.
Continued strength in AI strategy, digital transformation, and cost optimization projects.
Boutique consulting firms continue to gain market share as clients seek nimble, specialist providers.
Hiring uptick expected to persist through Q4 as economic uncertainty drives demand for consulting services.
Geopolitical risks (e.g., China-U.S. tensions, global elections) are a net positive for the industry.
Next Steps
Do you currently work at a consulting firm? We’re gathering insights from management consultants to understand current industry sentiment, emerging trends, and overall market outlook. Your responses are anonymous and will help create a more accurate picture of the state of the industry. Take a short survey here.