By Inés Peschiera | Published 11/17/2006 |
The top ten list was created by comparing the 32 firms across these categories. Each category had an equal weight in our calculation. Firms were ranked according to their overall score.
For a complete chart of how the top ten firms ranked in the six categories view below
Talent / n. / 1. a unit of mass 2. a skill or ability 3. what consulting firms are moving mountains to attract. As the economy continues to pull itself together, competition for the best and the brightest is only getting stiffer.
See what the firms on our list are doing to attract and retain top talent.
The first time the word "talent" was used to refer to a skill or ability, historians tell us, was in the New Testament. Before then, a talent was known as a unit of mass, which was often used to measure a sum of money. The English poet, John Milton, who is responsible for coining modern words such as "self-esteem" and "jubilant," later used it in a poem referring to the gift of sight. Today, in the world of consulting, it has acquired yet another meaning.
In consulting, the word often denotes a type of individual or a group of individuals with certain characteristics. Talent is what consulting firms are moving mountains to attract. In a basic sense, the word refers to individuals who have a series of key characteristics that enable them to think creatively and work well in groups. Yes, a weighty degree from a top university or MBA program might suggest that an individual holds these qualities. But really, it’s about possessing the right mix of attributes, which are as elusive as those that make up the proverbial "it" factor in show business.
Every consultant has a different definition of the "it" factor. For Mike Pegler, a director at PRTM, the "it" denotes people who "have a track record of delivering results … and are very entrepreneurial." For Zach Fox, an associate consultant at Bain & Company, this means having "a passion toward getting to an answer … and being very excited about what you are doing." For Bruce Holley, a vice president at The Boston Consulting Group (BCG), these are individuals who "are very bright and can handle ambiguity."
Chances are, "it" is a combination of these things, and if you have it, you are talent and will soon find — if you haven’t already — that the consulting world is a shopper’s market.
Luckily, the results of Consulting Magazine’s "Best Firms to Work For" survey reveal an overwhelming amount of detail about the kinds of demands talent can expect to make, and precisely how firms are acquiescing.
Perhaps unlike in any other age in consulting, the current market for talent is leading firms to invigorate their talent models, and nowhere is this more evident than inside those firms now counted on our annual "Best Firms to Work For" list. Resulting from input from more than 5,000 consultants this year, our "Best Firms to Work For" ranking once again provides a unique view into the consulting world’s talent marketplace, signaling the rise of hot new talent shops such as Point B of Seattle and Huron Consulting of Chicago. Moreover, the list signals a different distinction for those firms whose names no longer appear on it (such as, perhaps most notably, Booz Allen Hamilton, which this year dropped off the list after having made it for five consecutive years).
This year’s "Best Firms" survey also shed light on industry-wide trends. A few things we noticed: Now, it seems that the top firms are paying more attention to work/life balance than ever before. The historic divide between men’s and women’s satisfaction with compensation appears to have been leveled. And, there seems to be a notable difference in compensation satisfaction levels between junior and more senior consultants.
In The Parable of the Talents, a master gives one servant five talents, another servant two talents, and a third servant one talent before leaving on a trip. When he returns, he finds that the first servant had invested his five talents and made five talents more. The second servant had made two more, and the third servant had buried his one talent for safekeeping and therefore returned his talent to his master.
In response, the master praises the first two servants and gives them both more responsibility. As for the third servant, the master calls him wicked and lazy for not making use of his talent, takes his one talent, and gives it to the first servant, casting the third into darkness. The master preaches, "Everyone who has much will be given more, and whoever has a little, even the little that he has will be taken away."
The common interpretation is that we are under a moral obligation to use our abilities rather than bury them.
Consulting firms, too, must invest their talent in order to make more talent, or risk losing business. In fact, Steven Kauderer, a managing director and head of the North American Insurance practice at Mercer Oliver Wyman, admits that his firm has been known to "turn down assignments because we didn’t have the right people."
So, what does it mean to have the right people? Essentially, this means having the best mix of individuals who are able to work together toward a mutual goal: delivering the best to the client. Unlike in the parable, in consulting, teamwork is integral to the success of any project and ultimately that of any firm. In fact, 88 percent of consultants polled expressed the notion that a team-oriented culture is important or very important at their firms. Many firms also expect consultants to have the ability to think creatively. Impressively, at Monitor and Kurt Salmon Associates (KSA), about 95 percent of consultants agreed with the statement, "Creativity is encouraged here, even if it leads to mistakes."
Though firms screen for candidates who have these capabilities, they also expect to teach individuals a thing or two. Certainly, training is a huge part of consulting and a major draw for candidates looking to sharpen their business savvy. This year, our survey revealed, once again, that strategy firms offer the most training. At McKinsey, BCG, and Bain, the average consultant receives 81, 79, and 66 hours of training per year, respectively. This year, however, consultants at Avanade, an IT consulting firm, let us know that they receive nearly 10 more hours of training, as it turns out, than their peers at McKinsey, and Tata Consultancy Services is almost on a par with BCG.
At least part of the reason that the top strategy firms are ahead of other firms when it comes to hours of training is that these firms instruct consultants through formal in-house workshops more than the average firm. At Bain, McKinsey, and BCG, training is delivered via in-house workshops 73 percent, 65 percent, and 52 percent of the time, respectively. Meanwhile, the industry norm is that formal in-house workshops make up only 43 percent of total training. (It’s also worth mentioning that at many firms, there is an emphasis on training "on the job," so it is more difficult to determine the total number of hours of training delivered in such companies, and it may be misleading to compare firms on this basis alone.)
Playing the Field
Where firms are really struggling is not in finding out how and when they train consultants, but rather in finding who and how many consultants they train. Alan McIntyre, a managing director and head of the North American Banking practice at MOW, elaborates: "Because of the way the talent develops, if you don’t recruit the right number of people one year, you suffer for it year after year after year."
It is no secret that consulting firms have long been subject to a supply constraint. Certainly, books like The War for Talent were published several years ago, after many firms had been witnessing the surfacing dilemma. But the war has continued to a crescendo, and firms now face a new set of challenges.
As the economy continues to pull itself together, hedge funds, investment banks, and — let’s not forget — Google are all actively luring away graduates who might have otherwise delved into consulting.
"All of a sudden venture capital, hedge funds, and media companies are hiring up a storm! ... Now I’m not as worried about just the other consulting firms," says Holley.
Chris Rohn, a director at Huron, explains that as a result, "You can’t have the 20 percent turnover rate that consulting firms used to have."
Competition is only getting stiffer. And consulting firms are playing hardball.
Alex Wittenberg, a managing director and head of the North American Enterprise Risk practice at MOW, believes, "Recruiting is starting to look more like college sports, where the college coaches used to go to seniors in high school, but now they’re looking at students who are in their first year of high school and look like they might make their high school team."
Our survey data supports this idea. This year, 91 percent of consultants polled believe that their firms are adding headcount, which suggests that competition is fierce for top candidates. Probably as a result, 76 percent of consultants tell us that morale at their firms is high or very high, compared to 73 percent last year and a mere 56 percent in 2004.
So, how are consulting firms shaping up to lure talent away from the competition? Top firms continue to offer what they’ve always offered: incredible learning curves, stellar client portfolios, enviable mentorship, merit-based promotions, and opportunities to meet some of the most impressive business minds on the planet.
But now, some firms, especially those that made our list this year, have tipped the delicate work/life balance in favor of life.
Keeping Work in Check
This year, we discovered an interesting pattern in our survey data: The overall top five firms were also the top five firms in the work/life balance and culture categories. In the rest of the categories, other participating firms filled some of the first five spots. This suggests that the stellar firms that made our list all share a few important qualities: Their status on our ranking is predicated by dedication to helping consultants manage their careers and build solid relationships with their colleagues. (It’s worth mentioning that out of the ten firms that provide consultants with the most valuable mentors, four of them are also in our overall top ten list.)
Interestingly, Monitor’s leap onto our list to the number five spot this year is driven in part by its strides in the work/life metric. (It jumped from the sixth spot to the third place in that category this year.) And McKinsey’s improved standing on our list — from sixth to second — is also driven by a similar improvements in work/life balance, as it bounced from the 19th spot to second place in that metric this year.
According to Rohn, "The ‘up-or-out’ has changed drastically industry-wide … because there are a lot of people who want to do interesting work who don’t want to kill themselves in the process."
In addition to providing consultants with a system of checks and balances for monitoring hours and curbing overwork, many of the top firms also offer flexible work options, and unpaid time off for when they really need a rest. For instance, every single consultant at Monitor who filled out a survey told us they are satisfied with their flexible work arrangements. The firm is notorious for allowing consultants to determine their own work schedules, as long as results are delivered.
And, apparently, consultants also are thrilled with unpaid time-off options. At Point B, which is ranked fourth in the work/life balance category, consultants are able to take as many unpaid vacation days as they like, often following the conclusion of projects. It is fitting, perhaps, that with options like this, Point B has come out of nowhere to leap onto the "Best Firms" ranking at number three, just below McKinsey & Company. Other firms within the top five, including Bain and BCG, also offer opportunities to take unpaid time off — often referred to as sabbaticals, or leaves of absence.
Individuals at several top firms are also excited about the option of taking time off from their offices by relocating to other offices. The firm that is most flexible in this regard is perhaps Monitor, which has a truly global P&L.
Rebecca Otto, a consultant at Monitor, told us, "I just transferred from Toronto to the San Francisco office, and I was actually very pleased and surprised by how easy it was to do that. Right away, they said, ‘Great. Pick an office, any office you want, and let us know when you want to move, and we’ll support you.’" This attention to individual requests is probably part of the reason why the vast majority (73 percent) of Monitorites told us that they feel their firm has a strong commitment to individual training for career development.
MMC and MOW, where 80 percent of consultants feel the same way, also facilitate this kind of transferring readily. In fact, Kauderer cites that at any given point in time, 25 to 30 percent of MOW consultants are working in a country that is not their home base. Bain and BCG both have some form of short-term and long-term relocation options, but seem to require a bit more effort — namely, a formal application process.
A few firms have also tipped the work/life balance by changing the standard amount of time consultants spend on the road. While some firms rave about flying consultants home or flying friends out to visit consultants on Thursdays — after four days away from home — a handful pride themselves on rarely flying their consultants out. The average consultant at Bain, which ranks first in this category, travels 1.18 days a week. At Monitor, which ranks third in this category, the average consultant travels 1.41 days out of the week. This is because the firm does not demand that consultants spend four days a week at the client, but rather expects them to travel only when it is deemed necessary — often this means one day a week, for meetings. This also means that clients can expect to pay less for overhead costs. Though this sounds generous, a newcomer to our ranking this year has even more enticing options.
We couldn’t possibly discuss low travel demands and low overhead without mentioning Point B. Due to its entirely local client base and virtual office setup, Point B has consultants who rarely leave their homes — and we do mean the places where they sleep. (Point B consultants all telecommute.) In fact, the average Point B consultant travels 0.55 days a week.
Laura Yurdin, a Point B consultant who recently grew into a marketing role in the firm, emphasizes that the model works best for people who have a life outside of work, which explains part of the reason why Point B consultants are so enthusiastic about their firm.
Perhaps Booz Allen Hamilton, a longtime frequenter of our ranking, would do well to take advice from this newcomer. This year, the firm has slipped off the list, and it seems that this is partly due to the fact that consultants aren’t as happy with the firm’s work/life balance. We should mention that Booz does continue to offer consultants excellent career development opportunities and a robust culture.
The Shrinking Gap
Our survey revealed that women do not feel any more or less satisfied with their base salaries than men. Certainly, this marks an important shift; however, it does not seem surprising, given the efforts many firms have been making to assure women equal opportunities for advancement, while providing them with the flexible work arrangements.
One of the most noteworthy developments is the onslaught of part-time opportunities many firms now offer, which allow individuals to work less time while still remaining on a partner track. Almost 20 years ago, Bain was one of the first firms to start offering part-time options, or "flex-time."
Bain’s program was designed to allow consultants to work at 60 percent — spending 50 percent of their time doing client casework and 10 percent of their time doing personal/professional development. The program began as an effort to retain women who were leaving the firm to raise families. Now, despite the fact that the program has always been an option for both men and women, it continues to be marketed toward women, as evidenced by information featured in recruiting materials titled "Women at Bain." This is not surprising, since it reflects social norms that have not changed significantly since.
Today, Bainies applaud their flex-time options: 88 percent of consultants at Bain tell us that they are highly satisfied or satisfied with their part-time options, compared to the industry-wide average of 78 percent. But several firms, including BCG, KSA, MOW, and Monitor, have part-time options of their own.
However, although women are as satisfied as men with their salaries, they are not quite as convinced that glass ceilings have been shattered as their male counterparts are. (Eighty-one percent of women say there is no glass ceiling, compared to 89 percent of men.) One reason for this may be that currently, the vast majority of partners at firms continue to be men. At some firms, female partners are practically nonexistent. And not every firm that offers part-time opportunities has worked out a transparent promotion system, meaning that promotions for part-timers take much longer — and it’s not always clear why.
The Waiting Game
Our survey also exposed to us that midlevel consultants are likely to be unhappy with their salaries and distraught with their firm’s profit-sharing. A glimpse at a chart that illustrates different satisfaction levels according to position reveals the disconnect.
"At those levels, you don’t have the visibility of what the market is," explains Rohn, who admits that he remembers being dissatisfied with compensation when he was at that level. It seems that because these consultants fall into a hazy bracket between associate-level compensation, where salaries must be competitive across firms, and profit-sharing opportunities, where the money’s at, they are expected to work long hours while being unsure of what they may be getting elsewhere, knowing that their colleagues with bigger titles are making significantly more.
McIntyre believes that "the model of consulting as a business, over the last 50 years, has been that there is a prize, which is becoming part of the partnership, and part of the motivation for people who come up through the ranks is that they’re aiming for that prize because the economics at that level are very attractive."
It appears that these individuals are stuck waiting for that prize, accruing nothing but long hours and disappointment in the meantime. This becomes increasingly difficult to manage, McIntyre explains, when hedge funds and other competitors can offer consultants "the prize without progression," thus leading consultants to question, "Should I wait to become a partner here or should I go to a hedge fund and make more money right now?" Though, he adds, that "the downside to hedge funds and other competitors is a less stable career path."
Probably as a result of this competition, "If you look at any consulting firm right now, the position highest in demand is that of manager," says Rohn.
In the end, those who stay and make careers in consulting are those not with patience, but with commitment. And it is fitting that "commitment" and not "patience" is an attribute that all recruiters are looking for in the candidates they screen.
"Talent," it seems, can be reduced to at least one definite attribute, after all. But again, consultants, like their firms, must ensure that talent is properly invested — and invested in.
The 32 participating firms were:
Bain & Company
Booz Allen Hamilton
The Boston Consulting Group
Development Dimensions International
Diamond Mgmt. & Technology Consultants
First Consulting Group
Huron Consulting Group
PRTM ICF Consulting
Kurt Salmon Associates
McKinsey & Company
Mercer Management Consulting
Mercer Oliver Wyman
Tata Consultancy Services