Is it for you?
The consulting industry has certainly has suffered some tough years following the Enron debacle and now the Galleon insider trading case, in which two very senior McKinsey figures were involved.
For a few years before the financial crisis, it also started losing more and more of the top graduates to the finance industry. But despite all that, consulting is certainly still one of the most popular choices for ambitious undergraduates and MBA students and continues to be a top choice for those who want to learn a lot and gain a wide range of skill, while keeping all their options open in life. Consulting is a career for those who are high achievers while at the same time being well-rounded and open-minded. It’s a great place to pick up all the communication and leadership skills that will be useful throughout your life, and there are few entry-level jobs where you will be trusted with a such a high degree of responsibilty and the opportunity to interact with executives from early on. It is great for those who want to get far but don’t really know what they want to do yet, as consulting can prepare you for corporate and non-profit jobs, entrepreneurship or just to get into a top business school with just 2 years of work experience. But read the full report on money and lifestyle before you make up your mind!
The $$$ factor
Base salaries in the elite consulting firms are very attractive compared to industry jobs and can match salaries paid on Wall Street, but bonuses will obviously be much lower than on Wall Street and most finance jobs. Expect to have a high and steady income, but you are not going to be a millionaire any time soon. At least you are likely to have a sixfigure salary as soon as you become Associate or Senior Associate, and that’s not bad a few years into your first job. But the real money is made by the partners of consulting firms, and it will usually take you about 7-9 years to make it partner, depending if you start out of undergrad or out of grad school/business school.
In my first year with McKinsey, I didn’t actually make any money, despite having a great income. At first, I had to buy suits, blouses, shoes, a suitcase for all the traveling and so on. Then, I worked so much and so hard that I wanted to enjoy my weekends and went on expensive trips. I also somehow felt I had landed this great job and felt like partying on the weekends and inviting my friends for drinks and dinners all the time, until I realised I didn’t actually have any money. It can be hard to manage your finances initially because you get this fantastic American Express card and you won’t be charged for anything for about six weeks. The idea is that that way you can pay for all the flights and dinners away with your credit card, claim back expenses, and by the time your finance department has repaid you, you get billed on the credit card. But with all the hotel and taxi bills, you can have big swings of $5,000 or more on your account, and if you were a penniless student like I was before, it can be quite hard to know how much money you actually have. So you do actually earn good money, but due to the lifestyle and all the travel it can be hard to keep much of it.
I think what’s more important is your long term prospect, and I think they look quite good. As a partner you can obviously earn well (though maybe not enough – why were guys like McKinsey’s Rajat Gupta and Anil Kumar tempted to sell their services to Galleon fraudster Raj Rajaratnam?), but also the alumni tend to do quite well after leaving, either by taking on corporate leadership positions or by setting up their own businesses. It’s not a get rich quick scheme though, you have to work very hard for your money (as you can read in the lifestyle section below). As a partner I worked a lot with used to tell me “it’s not a salary, it’s compensation for damages“.
Lifestyle and the lady factor
It is commonly known that lifestyle is the big downside of a consulting career and I will not tell you otherwise. The funny thing is, people can tell you all about it in advance, but most enthusiastic aspiring consultants won’t really understand until they are consultants and realise what all these people meant. For a short overview of what life of a consultant is like, you can read my blogpost “Week in the life of a consultant“.
Expect to work between 50-60 hours per week. You will typically work 4 days a week at the client site and spend Fridays in the office, if you’re lucky. This is true for McKinsey and Bain to some extent, I believe the Boston Consulting Group has a policy of spending more time in the home office. In most locations, this will mean a lot of air travel and hotels, only if you work in London, Paris or Madrid you will likely have 80% of projects in your hometown, which can improve lifestyle dramatically. But for most others, it means getting up around 5am on a Monday morning, flying to the city your client is located in, taking a cab straight from the airport to the client site and getting to work – trust me you will be tired by noon at the latest! But it is normal to work until 8 or 9pm if you’re lucky, often till midnight or longer even.
There are big variations in lifestyle between different offices and countries depending on the work culture there, so lifestyle can be nicer or even worse depending on where you are. I remember talking to a Japanese associate once who was just doing a stint in the German office, and over dinner I asked her how the lifestyle at her project with a large chemical company was, and she said it was absolutely fantastic and relaxing, they only worked from 8am till midnight every day, didn’t work on weekends and had holidays!! She thought that was great.
On to the lady factor… I think consulting is a great career for young ambitious women and I also think it is an awful choice, but let me explain… if you have read my blog post “Myths and realities of female-friendly jobs“, you might have an idea of what I am about to say. Here’s why I think consulting is a great career for women:
- it is meritocratic and you can advance very fast
- consultancies invest more than any other employer in training you in all the important communication and leadership skills that will help you for the rest of your life
- consulting is one of the best ways to move on into high positions in industry, and a lot of ex-consultants go on to set up fantastic innovative companies afterwards
- if you join as an analyst, you will have a great profile to get accepted into top business or other graduate schools 2 years into your job, whereas most others will need to gain several more years to get there. You might even get sponsored to do your MBA, which will give you another set of great options going forward
- the self-confidence, the soft skills and the network you will acquire will serve you throughout your lifetime, and that is very precious.
But before you sign that contract, listed to the rest of my story. Here’s why I think consulting is a horrible career for women:
- the real payoff comes with partnership, and it takes about 8 years to get there. At least in terms of financial rewards, you won’t get as much out in the first years, and you might not last 8 years (the average tenure at the top consultancies is only about 2 years)
- the travel inherent in the job makes combining having a baby and being a consultant as good as impossible. Yes, you can try to get projects in your hometown, and if you have to travel a day or two you could get someone else to take care of the baby, but for sure the way you do the job will differ greatly from your male colleagues, and this will have an impact on your career. Consulting is a people business and physical presence is very important, and there is no way around that
- the working hours are a killer for your family life as well. Even if you manage to get a project in your home town, it is unlikely that you can leave the office before 7pm. I think at least in the London offices of most consultancies there are great efforts to keep mothers in the job, but all this is done by creating special conditions for them – the fact is that the job as it is makes it very hard to combine a career and family.
My personal advice is therefore, if you’re going to do it, do it early. The best time to do it is straight out of undergrad, do the analyst program, get sponsored for the MBA, and then move elsewhere. If you are just doing your MBA or PhD and you’re not planning to have children in the next 3 years, you could also do it for 2-3 years, become a project manager, and then move or set up your own business. I would not recommend it as a long term career. But that’s okay, because we’re all about being independent and going for the best opportunities, and this shouldn’t stop you from getting the best out of consulting for a couple of years and then move on to better things!
How to get in
Case studies, case studies, case studies .
On a more serious note, there are thankfully a wide range of paths into consulting:
- to join as a analyst out of undergrad, you need to come from a top school, be at the top of your class, and be distinguished in several areas beyond that (scholarships, awards, medals, that sort of thing). Joining as an analyst is really the hardest, as always when you have no experience, you can only compete on pure brains or potential, and that’s not easy. But it is the most attractive stage to enter the industry.
- you can join as associate out of an MBA program at a business school or a PhD or any type of other graduate degree (MPAs, law school and medical school graduates are popular with consultancies too).
- you can also join as an experienced hire (and will usually still start as an associate) if you have at least 2-3 years relevant industry or functional experience, if for example you worked in the oil industry or as a marketing expert. This route used to be less common but is getting more and more encouraged by consultancies, as clients are less willing now to pay $5,000 a day for 22-year olds with no work experience.
No matter what stage you enter at, the recruiting process tends to be the same. The interviews will always consist of two parts. First you will explain why you want to do consulting, how it fits in with your plan, what you can contribute and what skills you bring to the table. You will also be able to ask questions. Then you will have a case study to solve, where the interview will look for the following skills:
- the ability to structure a problem
- the ability to stay calm under pressure and uncertainty
- logical reasoning
- creativity (coming up with lots of ideas of what could be the problem or how something could be fixed)
- common sense and some awareness of how corporations and small businesses work
- communication skills – the ability to take all the information learnt, make a clear recommendation from it and communicate it effectively
You can certainly practice case interviews and you should do this rigorously before doing the real interviews. I scheduled my interviews such that I went to my top choice (McKinsey) last and had a couple of interviews with other firms before that to practice. That way, I could be competent and self-confident by the time I went for case interviews with McKinsey. I am sure there are great websites these days helping people prepare for case study interviews – if you know of one, please leave a comment below so I can link to them here! I will definitely add blog posts about typical case interview questions soon as well.
I hope you found this section helpful – did it make you want to work as a consultant? I am especially curious because, when I used to write about my time at McKinsey in my old blog, I wasn’t very happy in the job and didn’t write too positively on my experience, but all the readers were so excited and all wanted to work in consulting after reading my posts…it’s always been a mistery to me!