Consulting
While many businesses are based on selling products or services, consulting
firms primarily sell knowledge. Whether it’s management consulting, human
resources consulting, marketing consulting, technology consulting or
something else, consultants advise corporations and other organizations
regarding an infinite array of issues related to business strategy. You
name it—re-engineering, e-commerce, change management, systems integration,
billion-dollar mergers and acquisitions, corporate—there is a consultant
that is available to tell companies how to meet their challenges better,
stronger, and faster. They are the directors behind the scenes of nearly
every major event in the marketplace.
Of course, “consulting” is a big, one-size-fits-all term that includes
virtually any form of advice-giving. Pretty much anyone with a specialty in
a field can offer consulting service. The area that most people think of
when it comes to consulting is management consulting, a broad category in
its own right. Often called strategy consulting, this segment of the
industry includes firms that specialize in providing advice about strategic
and core operational issues. However, there are also consultants who
specialize in everything from workplace safety issues to environmental
concerns to family-owned business issues.
While most management consultants hold salaried positions at firms that
cater to a clientele of mostly large corporations, other consultants hang
out a shingle and offer their services as soloists or as owners of small
companies. They usually deal with clients on a project basis, and clients
are billed by the hour for their services. Depending on the client's
needs and the firm's functional specialty (or core competency, as
it's often called), consultants conduct objective research and analysis
on behalf of their client, and make recommendations based on their
findings. Ultimately, consultants take on the responsibility of improving
their clients’ businesses by effecting change through their
recommendations.
Although some of the highest-profile firms populate this segment, there are
thousands of other organizations and individuals that call themselves
consultants, make money by selling their advisory services, and offer
plenty of opportunities for employment. If you like the idea of giving
advice to other businesses, and you have a particular interest in
computers, human resources, corporate communications, mobile
communications, health care, financial services, real estate, e-commerce,
or some other specialized field, there’s a good chance you can find a
position with an organization doing precisely that.
What You'll Do
Research and analysis are the main tools of the trade for management
consultants. They analyze a business problem from various angles by
conducting research and forming and testing hypotheses. Research may
consist of collecting raw data from internal sources—such as the client’s
computers or employees—and external sources, such as trade associations or
government agencies. Consultants get some of their most valuable data from
surveys and market studies that they devise and implement themselves. The
data must then be analyzed in relation to the client’s organization,
operations, customers, and competitors to locate potential areas for
improvement and form solutions. These solutions are then recommended to the
client and—with any luck—implemented. (Sometimes convincing a client to
accept a consultant’s recommendations can be the most difficult aspect of
the job, and there is always a chance that the client will choose not to
accept the consultant’s recommendation at all.)
Consultants often must travel to where their clients are located, sometimes
spending days—even weeks—conducting research or implementing solutions.
Long hours are common. But the pay is great, not to mention the bonuses.
Who Does Well
For those who enjoy problem solving and thinking about business strategy,
consulting can be a very fulfilling career as well as an excellent
jumping-off point for a management career or a future as an entrepreneur.
On the flip side, frequent travel and long hours can make a
consultant's schedule very demanding.
While consulting is great for people who like variety in their work, it is
not for those allergic to structure and hierarchy. The large and elite
firms tend to have a culture that mirrors that of their corporate clients,
complete with a steep career ladder: Only a select few make it to
partner-level, and that's with an MBA and 6 to 8 years at the firm.
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Although the competition at top firms is intense, the qualities that
recruiters look for are similar across the board. Besides outstanding
academic records, firms want people who are problem solvers, creative
thinkers, good communicators, and who have a keen understanding of and
interest in business.
Top candidates will also have previous experience in the business world
(consulting internships are impressive but not required) as well as a
record of extracurricular achievement. Firms specializing in IT consulting
or e-business may require technical skills and experience.
Candidates with experience in industry are much sought after, particularly
by firms that have industry practices that correspond to candidates'
backgrounds. Several firms hold specialized information sessions for
experienced candidates as well as PhDs and JDs. Consult firms' websites
directly or contact firms' human resources departments or local
graduate schools for schedules and eligibility.
In the interview, most recruiters pay close attention to a candidate’s
experience and background. According to insiders, most consulting
interviewers are looking for the following:
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High energy and enthusiasm
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Team orientation
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Integrity
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Excitement about consulting
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Knowledge about what makes the interviewing firm different
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Success on the airplane test—do you want to sit next to this person on a
long overseas flight?
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Interpersonal skills
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Industry experience
Finally, all management consulting hopefuls must clear the dreaded
case-interview hurdle to land a consulting position.
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It’s a good time to be a consultant. According to the Bureau of Labor
Statistics, employment in management, technology, and scientific consulting
will skyrocket 60 percent between 2004 and 2014, much faster than the 14
percent growth projected for all industries. That makes it the
fifth–fastest growing industry in the economy. As more businesses look for
a competitive edge, hiring consultants is widely accepted and encouraged.
Opportunities are best in areas that reflect current business trends and
needs, such as IT, environmental, and “green” business; workplace safety;
and others. As workplace regulations become more stringent in certain
sectors—in medical offices, for instance—specialized consultants will be
needed to navigate those requirements and ensure that businesses are in
compliance with federal, state and local requirements.
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Undergraduates
Undergraduates generally join a consulting firm as analysts, although their
titles vary. The work itself—as well as the hours—can be quite demanding.
It often includes field research, data analysis, customer and competitor
interviews, and client meetings. In IT, analysts might do heavy-duty
programming. Traditionally, the analyst program lasts two or three years,
after which you’re encouraged to go to business school. However, this
system has been changing over the past several years. Firms have
increasingly begun to promote analysts into positions they hire MBAs into
or else into an interim role between the undergraduate and MBA position. If
you choose to go to business school, many firms will pay your tuition,
provided you return to the firm when you’re done.
MBAs
Consulting firms hire MBAs and other postgraduates right out of school or
from industry. Most new MBA hires will come into a firm as associates;
after two or three years they’ll move to the next level, where they’ll
manage case teams. After managing projects for a couple of years,
consultants may be promoted to principal, whereupon the focus shifts to
more intensive client work and the selling of services. Finally, after six
to eight years with a firm, a consultant might be promoted to partner. The
benefits of partnership are big increases in salary and responsibility. The
key function of partners at most firms is to cultivate clients and sell
them new business.
Mid-Career Professionals
If you have spent years accumulating knowledge about a particular business
sector, that knowledge can be valuable to other companies. To make the
transition into consulting, you should have a solid base of experience, as
well as a few success stories to share. After all, you’re going to be
giving advice to other professionals—they want to know that you’re a cut
above the other people in your field. So, if you came up with the idea for
the Mac vs. PC television commercials or helped a company save $3 million
on its IT costs, be sure to share that information.
Advanced-Degree Candidates
Over the past five years, consulting firms have increasingly tapped
nontraditional candidate pools, including JDs, PhDs, and MDs. If you are
one of these candidates, find out which level you’ll come in at—the same
level as undergrads, MBAs, or experienced hires. Also, you should ask about
the type of support you’ll receive once you join the firm. Some
organizations offer a mini-MBA training program, while others rely more
heavily on mentorship.
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The major consulting firms are among the best-paying employers for new
graduates. They are also known for offering excellent perks and benefits,
such as annual offsite meetings at posh resorts and reimbursements of
school expenses.
Salaries and bonus packages at the top firms are generally in close range
of each other, since these firms usually compete for the same pool of
candidates. At the margins, there are slight differences in compensation:
Lesser-known firms may offer slightly higher salaries or bonuses to attract
top candidates, and some organizations have different ways of splitting up
the bonus pie (for instance, linking a portion of the bonus to the firm’s
annual performance).
MBAs
In 2007, we estimate MBAs hired into elite firms will start somewhere
around $100,000, reaching more than $205,000 after five years. There’s less
of an emphasis on signing bonuses than in the past; these can run up to
$30,000. Although consultants often have higher base salaries than
investment bankers, bankers stand to make lots more—as much as 100 percent
of their base—in their year-end bonuses. That’s why some junior partners on
Wall Street make more money than senior partners at consulting firms.
Undergrads
Staff consultants at management consulting firms are likely going to be
earning between $56,000 to $84,000, often plus a signing bonus and year-end
bonus. As in the MBA market, signing bonuses are not as prevalent or
generous as they once were, but can range up to $10,000. Those joining a
large IT services firm will likely be in the $35,000 to $55,000 range to
start, with salaries climbing to $90,000 or more after a few years.