(Bloomberg) — McDonald’s isn’t the only company looking hard for workers these days — so is McKinsey.
Nearly 2-in-3 consulting firms say they’re short-staffed, and 1-in-5 are turning down work as a result, according to a survey from Source Global Research, which provides research and analysis for the professional-services industry. More than half of respondents said retention has become a bigger problem in 2021 compared with the end of last year, while about half said recruiting has also become more difficult.
“Demand is growing fast, and they don’t have enough workers,” said Fiona Czerniawska, Source Global Research’s founder and managing director. “The biggest reason why clients abandon a project is that firms don’t have the right capabilities.”
While the survey’s findings mirror all sectors of the economy, the shortage of consultants is notable as those firms are perennially among the most sought-after employers thanks to challenging, globe-spanning work that includes mergers and acquisitions, corporate restructuring and big technology implementations — not to mention generous benefits and high pay.
Meanwhile, business is booming, due to the uncertainty wrought by the pandemic. Marsh & McLennan, which owns consultants Mercer and Oliver Wyman as well as its namesake risk and insurance business, reported a 12% quarterly gain in consulting revenue, beating analysts’ estimates.
That creates the awkward phenomenon of consultancies charged with mapping the future of thousands of employees having difficulty finding their own. London-based Source Global Research polled 57 consultants, about half of whom work at firms that employ more than 1,000 people.
Companies like PricewaterhouseCoopers, Boston Consulting Group, and Deloitte recruit heavily from MBA and Ivy League undergraduate programs. The average base pay is about $90,000, according to career site Glassdoor. Consultants fresh out of a top business school can make $150,000 a year. (At McDonalds Corp., where the average hourly wage is $13 at company-owned locations, a burger-flipper working 27 hours a week, the typical workload based on government data, would bring in just over $18,000 annually.)
A surge in clients’ demand was among the top reasons for the talent shortage, the firms said in the Source survey, along with rivals poaching staff. Another reason: Quality consultants have left the industry amid the pandemic. For some, remote working has also made consulting less attractive than it used to be, when so-called road warriors spent much of their time in airports and hotels, jetting from one client to the next.
High-powered consulting careers aren’t as desirable as they once were for graduates with a more entrepreneurial bent than earlier generations, or who want to work for companies with socially conscious values.
Peter Dalack, a 2020 graduate of Carnegie Mellon’s Tepper School of Business, said the consultant’s life didn’t appeal to him as “they make recommendations and they’re not around to see the implementation of them.” The travel was also a turnoff for Dalack, a self-described homebody, who’s recently engaged and has two dogs at his home in Pittsburgh. Instead, he’s working in a supply-chain leadership development program at medical-device maker Philips.
Consultants, usually a big campus presence, shifted to virtual meetings and interviews during the pandemic. Some are widening their nets far beyond the Ivies to recruit workers with two-year degrees, Czerniawska said.
Bain & Co. is recruiting throughout the year rather than just when students arrive in September, said Keith Bevans, its head of global consultant recruiting. Bain is also luring people from corporate jobs and part-time MBA programs, as well as doctoral candidates.
“The pandemic has created an opportunity to innovate in ways that are long overdue,” Bevans said.
Bain will have plenty of competition, as only 4% of respondents to Source’s survey said they weren’t short of consultants. Boston Consulting Group has been recruiting at a breakneck pace, according to Amber Grewal, global head of talent and recruiting, and will bring in more people this year than ever. It’s even created a digital hiring process dubbed “Bionic Talent.”
The agencies need new approaches because “consulting as a career is not as attractive as it was 10 or 15 years ago,” said Tom Rodenhauser, managing partner of Kennedy Research Reports, which tracks the industry. “The sheer size of the global firms, and their reliance on recruiting from the same B-school ponds, taxes the talent pipeline. Also, consulting isn’t as impactful in a ‘change the world’ type of way as other careers. They’re not creating Uber or Tesla.”
For students like Hardik Tiwari, who just graduated from Northwestern University’s Kellogg School of Management, technology was the way to go. He’ll start in August as a product manager for Intuit Inc., with an eye toward eventually running his own startup. The starting pay in tech can exceed consulting, he said, plus there’s the opportunity to cash in with stock options.
“The high-demand roles in tech, they are not open to someone coming from a non-tech background,” Tiwari said.
Still, consulting firms still get a healthy share of newly minted MBAs, like Tiwari’s classmate Shrena Shah, who was attracted by the fast pace and the broad skills required. A full 36% of Kellogg’s 2020 MBA class chose consulting, a five-year high. At the University of Pennsylvania’s Wharton School, however, only 24.5% of its 2020 MBA class accepted full-time offers in consulting, down from 29% in 2010.
Younger people just aren’t as willing to wait a decade or so to reap the rewards of becoming a partner in a consulting firm, Rodenhauser said: “They want more, and they want it faster.”