After reading Bloomberg's Matthew Boyle's article The Consulting Business Booms Just as Consultants Disappear, it got me thinking: for consultants who left their firms during COVID-19, where did they go?
I used LinkedIn data to analyze the migration patterns of consultants who left their firms during COVID-19. I only looked at consultants in the U.S. and only considered those from the following 13 consultancies: the MBBs (McKinsey, Bain, BCG), the Big Four (Deloitte, PwC, KPMG, EY), Accenture, Parthenon, Kearney, L.E.K., Oliver Wyman, and Strategy&.
Across those firms, just over 8,500 consultants left their consultancy to go elsewhere.
TL;DR Most consultants went to other consultancies. For those who transitioned into industry, FAMGA (Facebook, Amazon, Microsoft, Google, Apple) were the big winners.
In looking at the data, the seniority breakdown of the consultants across the 8,500 was:
55% Pre-Manager: pre-managers were any consultants who weren't at the Engagement Manager (or firm-equivalent) level yet
25% Manager: managers were any consultants who were managing engagements & teams but not at the firm's leadership level yet
20% Leader: leaders were those at the consultancies who were less-involved with the day-to-day managing of projects and more involved with new business activities, managing client relationships, driving firmwide decisions, etc.
35% of the consultants ended up at 99 firms
Collectively, 99 firms (whom we'll dub the Big 99) employ about 3,000 of the 8,500 consultants. These firms are predominantly in consulting, tech, financial services, or healthcare. Of those 3,000 consultants, just over 1,300 of them (45%) moved to another consultancy and ~600 of them (19%) moved to either Facebook, Amazon, Microsoft, Google, or Apple (FAMGA).
Management Consulting: Perhaps unsurprisingly to some, there was a considerable number of consultants who were poached by other consultancies. The Big Four collectively hired about 16% of the 3,000, and the MBBs collectively hired another ~6% of the 3,000. The remaining 700 or so consultants within the Big 99 who moved to another consultancy moved to firms such as Slalom, Accenture, IBM, and Strategy&.
FAMGA: With the exception of Microsoft (whose headcount grew by 9%), all FAMGA firms saw double-digit growth over the past year according to LinkedIn insights. Amazon grew the quickest, with an increase in headcount by 45% across both Amazon & AWS, followed by Apple (19%), Facebook (16%), and Google (13%).
Other: Non-consultancy & non-FAMGA firms within the Big 99 that are now homes to ex-patriated consultants are mainly in tech, healthcare, and financial services. Within tech, Salesforce, DoorDash, and LinkedIn hired the most former consultants, collectively hiring 5% of the 3,000 in the Big 99. Within financial services, JP Morgan, Citi, and Morgan Stanley hired 3% of the 3,000 in the Big 99. CVS and Optum hired the most consultants within healthcare, contributing to just over 1% of the hires of the 3,000 consultants within the Big 99.
Types of Roles Consultants Move Into
For consultants who moved into industry during COVID-19, I wanted to better understand what types of roles/functions that they moved into. After doing a high-level grouping & categorization of titles, I quickly categorized just over 3,000 consultants into the following buckets:
The top five functions that consultants moved into were strategy & operations (22%), product (14%), program/project management (13%), data & analytics (10%), and operations (9%). Interesting to note: 3% also found their entrepreneurial calling in leaving their consultancies full-time to become (co)founders.
When it comes to grouping titles, there is still opportunity to continue grouping similar functions into more granular buckets, but doing such will require deeper analysis. For example, within the broadest "Strategy & operations" bucket, there are likely former consultants who are in this bucket that could be further & better classified into operations, corp strategy & dev, and growth strategy.
What does it all mean?
After looking at the data, there are a couple of takeaways that are important to note:
Consultancy-to-Consultancy Poaching will Intensify: It's hard to imagine consultancies significantly broadening their talent pools to consider talent outside of experienced hires from other consultancies. Bringing a new hire on board who has prior consulting experience allows the new consultancy to realize its value in that hire far more quickly than bringing on a new hire who has no prior consulting experience. It's also unlikely that consultancies will be able to convince former ex-patriated consultants to move from industry back into consulting. As such, the consultancy poaching game will further intensify, focusing an even-sharper laser on an already finite pool of consulting talent, which will result in shorter tenures and higher compensation packages. If compensation becomes the driving factor for why consultants move from one consultancy to another, then we may see a higher influx of consultants moving into industry, as compensation alone won't be the cement that grounds a consultant in consulting (e.g. will the work really vary much when one moves from Deloitte to PwC?) Firms that are exploring new models, such as low-to-no travel or venture incubators, may find themselves at a keen advantage for both attracting & retaining consultants, as they'll be solving some of the other pain points that fuel consultants' desires to make a switch into industry (such as no longer wanting to travel or being more-closely tied to/accountable for results of the work/strategies that they create).
Growth Requires Structured Thinkers and Those Who've Ventured into the Unknown: Aside from being market leaders, FAMGA firms also grew significantly over COVID-19. As other firms shift their focus from "survive to thrive" and lock their sights on new opportunities & growth channels, they -- too -- will require recruiting from a skilled talent pool to help them chart courses in unfamiliar waters. Firms that hire consultants full-time into their organizations may find themselves at an advantage, as they will be bringing in talent who have worked in ambiguous environments, are comfortable making decisions based on limited inputs/data, and move from insights-to-action quickly in a structured manner (hello, frameworks & project plans). Whether a growing firm needs to operationalize processes, stand up PMOs, or expand into new channels, consultants -- especially those who helped end-clients during a volatile period such as COVID-19 -- may provide incredible speed-to-value in helping these firms establish sustainable competitive advantages.
As the world begins to return to normalcy, it's an exciting time to be a consultant. It's also an exciting time to be in talent strategy. Hiring consultants full-time into firms may provide a wealth of benefits, but doing so will require well thought-out talent strategies and even better execution of such strategies. Firms that build highly-targeted segmentation models & acutely focus on highly-relevant messages across those talent segments -- especially if those messages are delivered via uncrowded channels -- will be at a keen advantage for winning over this highly-sought talent pool.
See this article on LinkedIn here.
Comments