Consulting: the industry is changing - as are its recruitment policies

“Merging would be an act of consolidation, not one of strength, offering confirmation that consultancies need to justify their existence,” writes the business publication.

The elite management consultancies were one of the great business success stories of the last decades. Through professionalism and skilful marketing they succeeded in creating an enduring mystique. Their advice did not come cheap, and firms such as Boston Consulting Group (BCG), Booz Allen & Hamilton, Bain & Co, AT Kearney and Arthur D Little became high-quality brands. By 2007 consultancy in its broadest definition was a business worth 300 billion dollar worldwide, according to Kennedy Research, the leading industry analyst.

Since then the economic downturn has hit. For potential clients, advice falls under the heading of discretionary spending. Nice-to-have projects are delayed or cancelled. Last year, large multinationals spent 12 per cent less on strategic consultancy than in the previous year, according to Source for Consulting, a research group. Although even then, the strongest top-tier strategic consultancies - McKinsey, BCG and Bain - kept growing. Still, any weakness in the consulting industry has consequences for the job prospects of MBA students.

Consultancies recruited masters in business administration, populating their firms with an impressive, fast-tracked elite. On the client side of the table, not so many MBAs were in evidence. Attitudes, practices, even use of language differed. All of this has changed. Consulting has matured. There are very few first-time buyers of their services out there. Generations of MBA graduates have meanwhile built careers in the corporate world - and they are not unduly impressed by their peers in consulting firms who speak a similar language to them.

On top of this is the phenomenon of the consultant turned executive - as well as the slightly rarer phenomenon of the executive turned consultant. Now there are people to be found on both sides of the table with a similar training and background.
Yet the need for advice still exists. Steve Ellis, global managing partner for Bain & Co, says his firm is on target to achieve 30 per cent growth in revenue this year, taking Bain over the 2 billion dollar mark in sales. He sees his business, along with McKinsey and BCG, pulling away from the rest of the market, at least in terms of top-level strategic advice for global companies. They are in the recruitment market too.