Consulting has quietly become one of, if not the hottest industry for students graduating from top universities. Among 2018 Harvard undergrads, roughly 18% chose a career in consulting – the same percentage that took a job in finance. At Harvard Business School, one-fourth of all recent grads went into consulting. The numbers are even higher at Yale School of Management (35%). However, history suggests that many consultants likely won’t be in it for the long haul. The chances are strong they’ll be hunting for something new in short order.
The new research comes from this year’s 100 Best Companies to Work For via Fortune. The annual list is always difficult to navigate when it comes to financial services because the methodology includes much more than pure compensation numbers. For example, a grocery chain came in third place while Goldman Sachs, the top-rated large investment bank, finished 62nd. Still, some of the details surrounding the three big consulting firms to make the list are rather illuminating.
At 10th-ranked Boston Consulting Group, just 2% of current employees have spent more than 20 years at the firm. Moreover, only 11% are at least 10 years in. So how do they fill all the seats? A whopping 43% of BCG employees have been with the firm for fewer than two years, according to Fortune. Close to half the company has yet to celebrate their second work anniversary! Perhaps more eye-opening, around 77% have worked there for five years or fewer. Consulting, at least at the more prestigious firms, appears a young person’s game.
A New York area financial services recruiter says the narrative shouldn’t come as a shock, though she was surprised the junior numbers were so high. “There are thousands of foot soldiers and only a few generals who bring in the business,” she said, noting the top of the management pyramid is particularly narrow in consulting. Besides, there is an unspoken understanding that many consultants at top firms will leave after a few years for other opportunities, including some who head to business school. “People at firms like Bain, McKinsey and BCG receive some of the best training and are highly sought-after in the corporate world,” she said.
The numbers are similar, though slightly depressed at the two other consulting firms that made Fortune’s list. At Deloitte, around 34% of employees have less than two years of experience, according to the report. Roughly 28% fit that mold at PwC. Of course, the Big Four also have tax practices that don’t open near as many doors as pure management consulting roles.
The recruiter, who asked to remain anonymous as she covers the industry, said the disparity between Boston Consulting Group and the two other firms makes sense. People who have resumes that include BCG – or close competitors McKinsey and Bain – tend to be looked at as bigger assets in the market and should, in theory, have more outside opportunities at a younger age.
So the numbers don’t necessarily portend bad news for people who want to get in to consulting. Just know it’s rather rare to build a long career at a single firm, whether due to your volition or the limitations of the company. Plus, you can take comfort in the fact that nearly half the firm doesn’t have all that much more experience than you do.
Consulting vs. banking
While it’s not a direct apples-to-apples comparison, our recent look at the average tenure at investment banks tells a somewhat different story. Wall Street employs plenty of green securities professionals – between 24% and 36% of FINRA-registered employees have three years or fewer under their belt, depending on the firm. But banks also hold on to way more veterans, despite recent cuts across the industry.
At UBS, for example, around 21% of FINRA-registered employees in New York have 20-plus years with the company, compared to just 2% at BCG. Banks like Morgan Stanley and Bank of America Merrill Lynch are just a few percentage points behind UBS. Only at Goldman Sachs do 20-year veterans make up a single-digit percentage of its securities and investment staff, according to current records.