- Management consulting news
- 10 November 2016
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Is economic uncertainty good for the consultancy business or bad for it? Peter Crush looks at how some the main UK consultancies are looking at the next six-nine months ahead, and how it will impact their growth and talent pipelines.
There’s a suspicion amongst the mainstream media that the only businesses that will truly benefit from Brexit (however it actually happens) are management consultancies. The FT has called Brexit “a financial bonanza,” as firms “start reorganising to cope with the new political landscape,” and it cites the ‘flurry of calls’ the largest consultancies are apparently receiving. But is this really the reality of consultancy in the year ahead?
And in particular, will this one single event be the main driver of consultancies’ hiring in the immediate future? For while the newspapers might be supporting its chances, consultancy is ultimately a discretionary spend, liable to fall away as it is grow. So, who’s right, and how are consultancies planning their hiring intentions to reflect what they expect for the New Year ahead?
“For our UK consulting business, we may lose some work if businesses relocate out of the UK to access the European market,” says Oliver Wyman UK head, Rebecca Emerson, speaking exclusively to Consultor. But she says there is “no uncertainty” around Brexit in her eyes, adding: “We were prepared for either outcome. I personally prepared the business for it by discussing its implications with staff from the CEO to our interns.” She adds: “Because we have some of the smartest people working for us, we still have a huge amount of incoming work, as our clients know we have the best problem solvers.”
Positive hiring intentions
It’s certainly confident talk, and at the start of summer at least, hiring intentions were reported as being strong. The latest Top Consultancy Recruitment Trends report (2016), showed 89% of consultancies expected to make as least as many hires during 2016. IT and technology continued to be the biggest predicted area for hiring – fuelled by overall growth in digitisation work.
One small black spot is the prediction for higher levels of attrition moving forward, with more respondents saying it will worsen (35%) than improve (22%) in the year ahead. It suggested consultancies may begin to place greater emphasis on hiring those with experience, who can hit the road running, rather than junior staff [the Management Consultancy Association Hiring Survey report 2016 also supports this, finding 68% of hires will be at consultant/senior consultant level].
The need to extent the talent reach
So how are these trends squaring with some of the other main consultancies? At Bain & Company, its hiring doesn’t fit this picture. It is hiring from a position of growth rather than attrition (and typically at generalist level so it can train them up). “We predict continued growth at our historical average of around 15% a year,” says Keith Bevans, Partner, Global head of consultant recruiting at Bain & Company.
However, maintaining this has meant a new challenge. “To keep this level up we’ve started expanding the channels we reach out to,” he says. “Historically, and certainly in the US, we’d have taken most (two-thirds) of our new intake from business schools and MBAs. Now we’re recruiting more from industry. Outside America some markets are now reaching two-thirds from non business schools.” This could well be a smart move. He adds: “Not only do these people bring new experiences, it actually gives us better hiring flexibility. These are people we can hire throughout the year, when they want to join us. This is much different from the academic year-end window when we have to hire from business schools in a very concentrated period of time.”
A feature of the Bain website, is that is hosts around 30 webinars – half of which are there to explain what consultancy actually is. This is a deliberate policy, says Bevans, because it wants to protect its talent pipeline by attracting those who may not have considered going into the profession. At consultancy L.E.K. reaching new people is also its goal, particularly for diversity purposes:
“Gender is something we’re particularly keen to address in our hiring strategies,” says Tom Diplock, partner. “We want to expand the pond we’re fishing in, and to do this we’ve started thinking more creatively – going to non Russell-Group universities, and also talking to people earlier in their degrees, to see if consultancy is something they are interested in.” According to Diplock: “There is nothing about this industry that should make it a male-dominated one. The more we tackle this the more we can improve the depth and diversity of our skills base,” he says.
Growth, but maintain the brand first
Despite fears around attrition, neither Bain nor LEK believe this is something they will suffer greatly from in the immediate future. At L.E.K. Diplock said attrition was more an issue in 2014, although both argue the jury is out regarding Brrexit, and how that will impact their hiring. “Uncertainty is why firms employ businesses like us,” says Bevans. “So in that respect we think it could benefit us, but it remains to be seen.” Adds Diplock: “One thing we have noticed is that projects that were put on hold over the summer are now coming back again. Also, while we’re not seeing a raft of Brexit-specific assignments, we expect strategy activation and M&A to come back to the fore. So, this gives us confidence. The hiring we’re dong now ensures we have capacity in late 2017 and even early spring 2018, so the fact we are hiring now proves we have confidence going ahead.”
What everyone agreed on however was the link between future talent pipeline, and employer brand, which is why everyone seems to be working hard in this area. Said Wyman’s Emerson: “While the best graduates continue to choose the firm they work for based on more than the pay and benefits, CSR initiatives, like our Social Impact programme, are becoming a truly differentiating factor when it comes to attracting the best talent. That’s why I’m so proud we won a Lord Mayor’s Dragon Award in September recognising our work futureproofing not-for-profits by applying our strategy consulting experience to their businesses.”
She concluded: “I’ve seen the rewards from hiring highly qualified, capable individuals from all backgrounds and of developing this talent to its full potential: it brings fresh perspectives that can lead to innovative and improved solutions for clients and the company.”
Peter Crush for Consultor.news