Another sign that the we're in tough economic times...
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Consulting firms pulling no-show on MBA campuses
Tuesday August 7, 1:24 pm Eastern Time
By Jeffrey Goldfarb
NEW YORK, Aug 7 (Reuters) - Nattily attired business school graduates toting pedigree sheepskins and seeking lucrative consulting jobs next year could be getting all dressed up with no place to go.
Many of the top consulting firms have told their summer interns -- typically MBA candidates working between their two years of graduate school -- not to look for their recruiters on campus come autumn.
With the economy slumping, big companies are not relying as much on consulting firms. And start-up tech companies, no longer flush with cash to hire expert management advice, are fighting for their own survival.
Top firms like Accenture (NYSE:ACN - news), Deloitte & Touche and KPMG Consulting Inc.(NasdaqNM:KCIN - news) have started deflating their bloated staffs. And all that is hurting the latest crop of MBAs, especially ones from the top 25 business schools, which graduate about 14,000 students a year. Usually, anywhere from one-third to one-half of them find jobs in consulting.
'A BRUTAL YEAR'
``It's going to be a brutal year on MBA campuses,'' said Gautam Rao, a second-year MBA at the University of Michigan Business School and president of the Consulting Club there. ``The reality is that there's going to be a large number of talented people who just will not receive offers.''
Only days after PricewaterhouseCoopers warned of another round of layoffs, the firm told summer hires that its management consulting unit ``is not bringing in new full-time hires at this time, nor are they planning any fall campus recruiting activities for this year,'' according to an internal memo dated August 2 and obtained by Reuters.
Not too long ago, second-year MBAs entertained a variety of tempting offers many months before graduation. Now, without a summer stint at a top-flight firm, students may have no other entry to a full-time consulting spot.
The rumors have filtered out to MBA candidates across the country and a small panic is setting in as students reassess career options and ponder the immediate value of their $100,000 education.
Booz Allen & Hamilton's commercial division is not expecting to recruit second-year MBA students who haven't previously worked for the firm. That pool usually makes up about 30 percent of the commercial division's annual hires.
A.T. Kearney has similar plans.
``What we've told the summer associates is that we expect to meet all hiring needs in 2002 from among this group,'' A.T. Kearney spokesman Paul Raab said. ``We don't expect to have any on-campus recruiting for full-time 2002 positions.''
UNPRECEDENTED BAILOUT
Campus career development offices confirmed consulting firm cancellations for the customary October-to-December visits and warned of scaled-back hiring from those who plan to show up. Most said they couldn't remember such a big firms bail-out before.
``Even the ones who are coming, if they used to hire five people, they are probably only going to hire half a person, if that,'' said Erin Cochrane, director of career services for the Tuck School of Business at Dartmouth.
Last year, Tuck placed nearly half its graduating class into consulting jobs that paid on average $100,000.
``This definitely has been an unusual year,'' said Ann Browning, associate director for the career consulting center at Northwestern University's Kellogg School of Management.
``Obviously we're disappointed, but if they don't have any opportunities, it's better that they're not coming to campus to recruit for jobs they don't have,'' she said.
Just two years ago, consulting firms wooed MBAs with fat signing bonuses and fancy cars to compete with the high-tech firms poaching their mainstay candidates. Now that dot-coms have turned into dot-bombs, grad students are back in line for high-paying consulting jobs.
However, even experienced consultants who once chased after the Internet rainbow's promised pot of gold are now staying put. As few as 5 percent of consultants are leaving their jobs these days, down from 15 to 25 percent just a few years ago, the firms said.
Many 2001 graduates who expected to begin work this summer have had their start dates deferred for three months to a year.
One MBA candidate's consulting career was over before it began. David Leibowitz said the summer internship offer he got from Towers Perrin in February, was rescinded a week before he was supposed to start in June.
``They let us down,'' said Leibowitz, 29, a second-year student at the Anderson School at UCLA. ``I'm not very hopeful that I'm going to get a job in consulting.''
Part of the problem stems from consulting firms accepting larger groups of interns this summer than in past years. That has increased the pool of available hires from within, eliminating the need to seek more elsewhere this year.
Not all the news is bad, however. Interns at consultants McKinsey & Co. and Bain & Co. said they've been reassured by their firms that job prospects remain stable.
``All of us are really hoping we get job offers because we don't want to face the prospect of going back to campus,'' said Anne Bailey, a Bain intern from the Wharton School at University of Pennsylvania.
``Career services told us, 'Don't worry about it if you don't get a summer internship, there's going to be plenty more consulting jobs when you come back in the fall,''' she said. ``And now we get a message every week from career services that says we're going to have to manage our own job searches.''
Those who go back to school without an offer will be forced to battle the jobless throngs for the few remaining slots. With expensive tuition bills looming, MBAs could well spend more time hunting for jobs than doing their homework.>>
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When I was coming out of grad school about 5 years ago most of us had at least 3-4 good offers...Signing bonuses were big things...Now, we're clearly in a very different market -- it's a buyer's market and most buyers are VERY SELECTIVE at the moment (they lack the visibility that they need to expand). |
