With big banks continuing to trim staff and cut compensation costs, many of the best and brightest graduating students are choosing consulting over Wall Street. For the second year in a row, consulting firms were the top destination for Harvard undergrads – roughly 16% of the class of 2013 signed on with a consultancy firm, up from 13% the year before. Meanwhile, just 15% of graduates took a job in finance, down from 47% in 2007.
There are several reasons for the sea change, the most obvious of which is the fact that consulting firms are doing a lot more hiring than big banks. PricewaterhouseCoopers plans to make roughly 2,500 hires within its advisory business during its 2014 fiscal year; Deloitte should be equally as aggressive. Then there is Bain, which plans to make 400 business school hires before the year is out, while financial services consultancy Capco is hiring 500 in Europe and the US..
Another reason is the money. Studies from Harvard and Yale show that while entry-level consultants still don’t take home the same size bonus as their Wall Street compatriots, they now earn, on average, a higher starting salary – typically in the neighborhood of $130k. Finally, there’s the quality of life. “Consulting typically gives you weekends,” said a PwC associate who passed on a Wall Street career. “Banking has you 24/7.” A recent study that found consultants are generally happier with their careers than bankers and accountants.
However, as with banking, consulting isn’t all glitz and glamor. Entry-level consultants commonly struggle with several aspects of the job that are unique to the industry – they’re just not as well-documented as those associated with banking. Below are a several pitfalls you should be aware of before joining a consulting firm, along with few extra benefits of the business that you may not be aware of.
All Planting, No Blooming: Many consultants new to the business become frustrated with the continued completion of studies, plans and presentations but never being part of the implementation, said Charles Moldenhauer, founder of New York-based Executive Transitioning, a career coaching firm that works with consultants, C-level executives and senior managers.
“While many consulting projects may lead to a implementation role, some people would like to be part of the implementation,” he said. “It may be why many consultants often seek and go to management jobs after a few years as consultants.”
Dozens of Bosses: Many consulting firms utilize a business model that sees its lower-level and mid-tier consultants work on several different projects simultaneously. This often means you’ll essentially have as many bosses as you do projects, especially with larger firms. “It can be frustrating,” said one mid-level strategic consultant who asked to remain nameless. “Each partner has a different style that you need to adapt to."
One of the reasons why consulting firms embrace this model is so that they don’t lose full teams to competitors, he said. It has some drawbacks outside of the reporting structure.
Juggling multiple assignments can not only be daunting, it often leaves little time to do the deep analysis that many rookie consultants look forward to.
“New consultants often end up feeling they are just skimming the research or analysis and not able to go deep with their work,” Moldenhauer said. "The words ‘grinding it out’ are often used.”
Moving Up Can Be Painful: At most firms, there are the partners and principals, which bring in the business and act as the face of firm, and the lower-level and mid-tier consultants that do much of the heavy lifting. Then there are the intermediaries: the project managers. “They are like the narrow part of the hourglass,” said the consultant. "They need to take demands from partners and principles while overseeing the specialists and consultants.” Mix this in with all the client-facing time and it’s the toughest role in consulting, he said. Unfortunately, project manager is a stepping stone to higher-paying roles.
Distant Client Relationships: While working with several different clients can have its advantages, developing deep relationships isn’t one of them. “Good work may seem often forgotten,” said Moldenhauer. “Working with someone successfully and with good chemistry is lost as the consultant moves along to another assignment.” As a result, many consultants view themselves as hired guns. It can take some getting used to.
Then of course there is the travel and the hours, but those concerns are fairly obvious.
As mentioned above, consulting offers steady benefits like job security and a nice paycheck. But there are also a few other hidden gems associated with advisory work.
Variable Work Experience: Most global management consultants organize by industry and by function, said an analyst at Boston Consulting Group who asked to remain nameless. “Within two years, you can work in six different industries across multiple functions: sales, marketing, strategy etc.” he said. It not only keeps work fresh, it also provides a wider breadth of experience in a shorter period of time. Consulting can be a great resume-builder.
Limitless Networking Opportunities: While some consultants may not develop lifelong relationships with clients, they have the unique opportunity to network with dozens of industry leaders while showing what they are capable of, said the BCG consultant. “Principles and client leaders will often go to work for former clients as their head of strategy,” he said.
Pride in Enabling: Yes, not seeing solutions implemented can be frustrating, but giving clients tools for long-term success – rather than just providing a Band-Aid – provides a certain sense of pride that is unique to consulting, he said.