It may have drawn lots of attention for headlines about MBAs becoming yoga instructors, but a Wall Street Journal report this week was important more for the gaps it filled in the overall picture of the MBA consulting employment landscape this year — and what that says about the overall U.S. economy, already dealing with an implosion in the tech sector and growing concern in finance.
Following Poets&Quants‘ story in late March that detailed some business schools’ concerns with reports of top consulting firms postponing start dates for soon-to-be graduated MBAs, WSJ reported on April 18 that all three of the MBB firms — McKinsey & Co., Bain & Co., and Boston Consulting Group — have in fact delayed start dates for new hires, in some cases until spring 2024. In other cases, the firms are paying their new hires to wait or work or study in the interim.
“Bain told MBAs with offer letters that if they waited to start until April 2024, the firm would pay them $40,000 to work for a nonprofit or $30,000 to learn a new language or participate in an educational program, in one communication that suggested hires could also become yoga instructors or go on safari for $20,000,” writes WSJ’s Lindsey Ellis.
P&Q REPORTED ON CONSULTING JOB START DELAYS IN MARCH
P&Q’s March 27 report included unconfirmed rumblings about graduates who had planned to work at a top consulting firm hearing that their official start dates were delayed, in some cases by as much as a year. But it also contained confirmation of the individual stories from B-schools.
Dave Deiters, associate dean of MBA programs and the Georgia Tech Scheller College’s Jones MBA Career Center, told P&Q that he had heard about delayed starts at consulting firms. “I have heard the same thing from my colleagues at other schools,” Deiters said. “That said, we have yet to see (knock on wood) any offers – consulting or otherwise – get rescinded. What is impacting our Class of 2023 MBA graduates are start dates being pushed back. Most firms employing Scheller MBAs have offered a range of dates that are definitely later than in prior years. And at least one firm has offered some financial incentive to students who accept later dates. That is about the extent of it at this point.”
Jeff McNish, assistant dean of the Career Center at the University of Virginia Darden School of Business, adds: “To date, we have not been made aware of any frozen or rescinded offers for consulting in the class of 2023. We have had one company ask a small set of students going to a specific city to consider changing the start date to later this year or early next year. It has impacted fewer than six of our students. This is the extent of what we know at present.”
One top-20 B-school’s careers team suggested that delays to consulting job offers may have a benign explanation: a reset to previous years. They theorize that since start dates moved earlier during the hot job market, it could be that they are going back to what used to the norm of late summer/early fall, or even later.
START TIMES STAGGERED AT BCG
The WSJ reports that “at McKinsey, many MBAs hires don’t have start dates yet, several students with offer letters said. The company, which is in the process of laying off as many as 2,000 workers, said those new hires will be brought in over a series of months, from shortly after graduation through February 2024.” Meanwhile, “Boston Consulting Group start dates will be staggered across the second half of the year and into January 2024, spokesman Eric Passarelli said. The company told MBA hires their start dates over the past few weeks.”
The report also details the bloodletting occurring at other major firms. Accounting and consulting firm Ernst & Young LLP said Monday (April 17) it would cut about 3,000 U.S. employees; in February, KPMG LLP said that it would lay off several hundred people in its consulting division.
Delaying start dates by months for new consultants “becomes more important when the economy is in a downturn,” Keith Bevans, Bain’s global head of consultant recruiting, told WSJ. “We try to encourage more people to start earlier when times are busy.” He added that Bain has hired a similar number of MBAs as in prior years; see P&Q’s reporting from February on the top consulting firms for MBAs in 2023.
THE IMPORTANCE OF FLEXIBILITY & RESILIENCY
Reacting to WSJ’s news on LinkedIn, Linda Abraham, founder of MBA admission consultancy Accepted, writes about the importance of having a Plan B — and maybe even a Plan C, “not to mention resilience and flexibility.”
“The people hired by McKinsey & Company, Bain & Company, et al are highly talented. They picked these companies as much as these companies picked them,” Abraham writes. “However, after incurring the debt that most MBA students incur, and counting on the salary that newly minted MBAs at top consulting firms get, a delayed start date is probably a frustrating and maybe scary outcome.”
Peter Johnson, former head of full-time MBA admissions at UC-Berkeley Haas School of Business who is now a global higher education consultant, responded to Abraham’s post, agreeing that for MBA grads the situation is “unsettling” but adding that there is an upside, as those students now have a chance to display their “resiliency, creativity, and flexibility.”
“Although it’s a delayed start of the big consulting salary (many of which are in the $190K range this year), they have the $30K-$40K stipend and their signing bonus, which averaged around $30K for those firms this year,” Johnson says. “Many MBA grads headed toward consulting see it as an opportunity to build skills and reputations before heading in a different long-term direction, and this could be a golden opportunity to explore with a secure job in 6-9 months and a $30-$70K safety net.”
But MBA admissions consultant and coach Barbara Coward expresses concerns for the MBA grads who have taken out large loans with the expectation that they will be earning high salaries this year.
“I would think it would be incredibly scary and disappointing,” Coward says. “I wonder how the suggestion to go on an African safari, take a painting class, or become a yoga instructor will resonate with those impacted. By the time you graduate, you’re ready to roll up your sleeves and get to work. Not sure what the best course of action would be while you’re in that waiting period, other than tapping into the freelance/gig economy, but earning money to pay off the student loans would seem to be the first priority for many. I’m especially thinking of first-generation, low-income students.”
DON’T MISS SOME MBAS WITH CONSULTING JOB OFFERS REPORT BEING ASKED TO DELAY THEIR START DATES and WHERE TECH FINDS TALENT: THE TOP U.S. B-SCHOOLS THAT FEED THE BELEAGUERED INDUSTRY
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