Strategy and management consulting remains the preferred destination of choice for graduates, according to new data. Of the UK’s students, around one-fifth are interested in pursuing a job in the consultancy industry. So what makes strategy and management consulting so popular among students? And what kind of students feel attracted to the industry?
In order to delve into what makes the consultancy profession so attractive and understand more about the profile of students who want to work in the consulting industry, Consultancy.uk joined forces with Universum to map the students’ career preferences. Universum annually conducts polls among ten thousands of students, and interesting insights come to light from their database.
The dataset showed that the strategy and management consulting industry is the most popular sector for students at the start of their career. Educational and/or scientific institutions follow, the healthcare sector takes the #3 spot, the media & advertising industry is at #4, while the public domain rounds off the top 5. Areas of middle of the road interest include the legal sector, the financial sector (banks, insurers, FinTechs); while less popular sectors such as the pharmaceutical, automotive and the FMCG sector, come in at the bottom of students’ spectrum.
Interestingly, consultancy is relatively much more popular among top students than other sectors. On average, students who aim to enter the consulting industry have higher grades than their fellow students. 40% of the ‘high achievers’ – students with above-average grade sheets – aspire to a role in the consultancy industry, more than 12 percentage points higher than the average for all sectors. In addition to grades, consultancy agencies also consider relevant work experience, extracurricular activities, (summer) internships or, for example, business courses followed. Despite preconceptions that consulting work might be better paid than other forms of graduate work, however, compensation is unlikely to be the source of this popularity. As the average graduate wage continues to stagnate in the UK, on $34,178 per year, the starting salary of Junior Consultants sits between £25-35,000 ($32-45,000 at current rate of exchange) per year.
Interest from high achievers affects the perception that students have about how competitive consultancy is. For example, 71% of top students believe that consulting firms only attract the best talent, compared to 43% of students in other sectors, a difference of no less than thirty percentage points. The consultancy industry also operates with a perceived demand for a ‘high-performance’ character – and consequently, every consultant in the higher segment of the industry has at least a master’s degree, which indicates that consultants almost always work with colleagues who, like themselves, at least think with a high academic standard.
A steep learning curve
According to Rosemarije Haasnoot, Project Manager of research at Universum, the enormous interest by top students in the consultancy industry can be explained by several factors. “Particularly the high level of challenge, breadth of assignments and steep learning curve serve as driving factors for the high popularity,” Haasnoot said. Correspondingly, this has led to students nominating the strategy and management consulting industry as the top sector year-in-year-out for the past four years.
Another important reason for popularity is, according to Haasnoot, that the major management and strategy consulting firms are known for their strong training and development programmes. “For students wishing to work in the consulting industry, training and development programmes are offered by management or one’s supervisor, a key selection criteria for many in their first employer.”
The industry is not only popular among graduates. MBA students also prefer the challenge within management consulting. A good example of this is the rate at which INSEAD graduates enter the industry. INSEAD is one of Europe’s top business schools, sitting first on the Financial Times’s latest MBA school ranking. 43% of MBA graduates from the Paris-based university were reported as joining consulting last year.
Another factor that reflects the attractiveness among joiners is that a raft of management consultancy firms are (regularly) listed among the top most attractive employers. In the recent Guardian 300 rankings for graduate jobs, consulting firms, PwC, Deloitte, KPMG, IBM and EY topped the professional services sub-category, followed by the three large American strategy consultancies, among others, as 25 advisory firms made the list.
Consulting firms have also upped their attractiveness in the eyes of UK graduates by focusing on addressing issues of pay parity. Earlier in the year, PwC became the latest of the Big Four to release its gender pay gap data. Companies doing this are in part hoping that by being seen to combat outdated pay practices, they can better attract top female talent from the next annual influx of graduates.
At the same time, it is well known among students that it is by no means easy to gain entry into the consultancy industry. There is only place for a limited number of students (there are around 1,000 graduate level vacancies in the UK among the top consultancies), the job criterion is often high and the recruitment process – especially from the strategic advisory offices – is one of the most challenging ones. “These factors are attractive of top students with excellent CV and good grades, and work prohibitively to those who score below average, which leads to larger difference in profile quality. The goal of a strong employer’s brand is ultimately that candidates can mirror themselves and make the conclusion: here I fit in, or here I am out of place. You’ll see that happening in the sector,” says Haasnoot.
Asked for the key motivators for students who aspire for a consultancy career, a number of common factors are found high on the list. For example, ‘challenging work’, ‘a springboard for further career’ and ‘professional training & development’ are mentioned as the three main reasons. Over the entire population of students, these factors pop up often. However, among those who seek a job in consulting, they pop up more often. The three factors are closely followed by factors such as ‘leadership opportunities’, ‘leaders that support my development’, and ‘a creative and dynamic work environment’.
Management consultancy is known as one of the most important breeding grounds for future top talent. Virtually every consultancy agency has a professional training and development programme that combines classical training with on-the-job training and, moreover, coaching offered by senior advisors/executives. In addition, the fact that consultants change their working environment every few months allows them to quickly develop their skills and knowledge, while dealing with different issues and situations in different sectors.
Consulting is considered challenging by students because advisors are usually taken on board for complex strategic or management issues. However, the degree of strategic impact differs by business. This explains, among other things, why strategy consultancy offices and the Big Four are so popular among students as they operate in the top segment of the market and deal with the most complex issues across the board. Students understand the challenge, while consultancy firms are strong with the marketing of this ‘unique selling point’, whereby 70% of the consultant-interested students associate the consulting industry with challenging work, as opposed to 67% across the board. Finally, 78% top students said consulting appears to be a great place for professional development and training, compared with 59% for all students.
Looking at the student’s career goals, similar patterns are noted. Students who aspire to a consultancy career are set on becoming a leader or manager, and wish to be challenged more competitively or intellectually than other students. They are also more open to an international career: within the consultancy industry, outside consultants working for the public sector, travel is expected – something that was also recently shown from Indeed’s research. Career goals that score low among students interested in consultancy include: ‘devotion to a particular purpose or common interest,’ ‘a safe and stable role’ or ‘being a technical or functional expert’.
Not surprisingly, factors such as ‘entrepreneurial’ or ‘creative / innovative’ are less important to the students – this type of student is better equipped to work with, for example, a startup. Remarkably, the factor ‘a good work-life balance’ scores less than average – students are aware that consulting is a demanding occupation. According to a previous research by Consultancy.uk, 77% of professionals in the field work more hours than they are paid for, with an average of 9.5 hours extra per week.
Because consultancy is not a protected title, anyone could call themselves a consultant. This also applies to students and starters; in principle, it does not matter which study background they have. If they have the right capabilities, they are a good contender for a job in consulting. However, there are differences in the kind of students who aspire to a career in the industry.
Of all students who follow an economics / business direction at the tertiary level, it is mainly students in the direction of Management and Business Administration who are strongly interested in a career in consulting. There are also major preferences by Strategy and International Business students in terms of a career in the consultancy industry, compared to the average business student. Other common backgrounds for consultancy are HR, Economics and Accounting / Finance.
The pure strategic advisory firms, such as McKinsey & Company, The Boston Consulting Group, Bain & Company, Roland Berger and Strategy&, usually favour students with technical or quantitative backgrounds.
The consulting industry is generally associated with a high degree of variety, high-impact positions, a steep learning curve, personal development, international travel, high salaries and more. To a certain extent this is true – the sector continues to be ranked as one the best places to enter as a UK graduate, while some of the world’s most well-known consulting firms are regarded as some of the most prestigious workplaces of the globe.
For students who consider consulting, there are many opportunities for orientation. Those who want to explore the field and agencies active in the arena can, for example, attend events / fairs attended by consultancies at university campus, business courses or inhouse ‘open days’. These are usually suitable for third or fourth year students and / or recent graduates.
Obtaining concrete experience is another good way, either through an internship or work experience. In order to acquire a consultancy career, there are usually two routes: either through a trainee programme – large consultancy agencies offer a variety of different traineeships – or by applying for junior consultant vacancies.