The Management Consultancies Association (MCA) defines management consulting as: “The creation of value for organisations through improved performance, achieved by providing objective advice and implementing business solutions.”
In essence then, management consultants are hired advisers. They are called upon to objectively analyse aspects of their client's organisation to help them to solve problems, make improvements and identify opportunities to maximise the efficiency and growth potential of a business.
Examples include clarifying an organisation’s strategic direction, streamlining manufacturing processes to save money, identifying ways to reduce staff turnover, integrating staff and work processes after an acquisition, researching new markets and identifying where to set up manufacturing facilities abroad.
Work is project-based and, depending on the size of the project, an individual or team of consultants may work within the client organisation alongside their client, conducting research and analysis or even setting up and running a project or system.
The potential for a good salary, bonuses, international travel and a varied, project-based work load are key selling points for careers in consultancy, but it can be a high pressure and demanding sector with long hours and lots of travel.
Current job market
As in most sectors at the moment, competition is high. As of August 2012 the sectors with a strong hiring requirement within the consulting industry were financial services, risk & regulation, outsourcing and manufacturing. With such a range of competition top candidates who missed out on a place with a large consulting firm are now vying for project and programme management (PPM) in mid-sized boutiques and PPM services in larger firms. Niche firms are also hiring top quality talent.
Within the industry itself fee income grew by over 11% in 2011 for management consultancy:
- In the private sector this was 14%, and this is expected to be eclipsed in 2012
- Public sector is described as having a very bleak Q4 (shrank 3% in last quarter)
- Boutique firms have seen a market growth too
- Manufacturing sector has seen a 21% rise in 2011
- IT consultancy is suffering
- Financial services is faring well, but has possibly reached a plateau (verdict still out on this)
Opportunities for consulting careers overseas:
- German consulting market grew by 7%
- Indian market slowed but still grew by 4.5% from 2010-11
- Italy and Spain shrunk by 10% and 3% respectively
- Careers in management consultancy 2012 (pdf) - slides of a presentation by Don Leslie of BLT Consultancy Recruitment in October 2012 at LSE, offering an overview of the major areas of consulting, lists of consultancies in the UK and a list of industry associations in the UK and overseas.
- Vault - online careers library [log in required]
- Management consultant - graduate Prospects job profile for consultant, includes salary data.
Managementconsultancy is often used as a catch-all term to encompass a wide range of functions or specialisms across a variety of industry sectors. If you are considering a career as a consultant it is important that you take some time to investigate the different types of consultancy work that are available in order to target the right firms.
Consultancy firms are often classified as strategic or operational consultancies, but these areas often overlap and many consultancies offer both services to their customers.
"This involves long range planning, the re-organisation of a company's structure, rationalisation of services and products, and a general business appraisal of the company" - Institute of Management Consultancy definition.
"Strategy consulting is a subset of management consulting with a focus on competitive strategy, i.e., where to play (which markets and segments to target) and how to win (what is the value proposition and how is it delivered)" - Monitor Group.
As Roger Hake, a consultant at Bain & Co., outlined in our Management consultancy and advisory services forum in 2006, strategy consulting involves offering advice that will answer the type of high level questions that occupy the time of a CEO, such as how to increase revenue, profits and the share price.
An example: OC&C.
Looks at analysing how a company operates in everyday practice and make changes for optimal performance. Consultants will be looking to find ways to improve productivity, cost-efficiency and the quality of the product they are producing or service they are providing, and implementing these changes. This may involve:
- Finding ways to improve a company's manufacturing process
- Dourcing and procuring cheaper materials or labour
- Upgrading IT systems and making use of other new technology
An example: PA Consulting Operations.
Economic consultants apply techniques of economic analysis to help businesses, regulators and policy makers evaluate and implement strategic decisions. They use microeconomic theory, econometrics, quantitative techniques and financial modelling in conjunction with sector expertise to formulate tailored advice to organisations.
Typical problems might include:
- Helping a company consider a merger opportunity
- Advising a company on how to respond to new taxation regulation
- Modelling the potential outcome of a new commercial phenomenon
- Analysing drivers of demand for public services.
Examples of economic consultancies.
Environmental consultancies advise on regulation, climate change strategy and corporate sustainability. A background in economics, geography or environmental policy is highly desirable when applying to firms. A master's degree can also add significant value in terms of improved research skills and specialist academic knowledge. Internships and extra-curricular activities can attract recruiters and demonstrate commitment in what has become a high profile area of the sector.
"Defining information needs, the provision of software, systems analysis and design, computer feasibility studies, implementing computer applications and making computer hardware evaluations" - Institute of Management Consultancy definition.
IT consultancy focuses on supporting clients in using technology effectively to meet their business goals. IT consultants typically take on large scale projects to design, implement and evaluate their client’s information and computer systems. Students with a business, mathematics and statistics, economics or finance background may find they are able to offer the strong quantitative and analytical skills required by IT consultancies.
Specialists in IT consultancy are charged with ensuring their client is making the best use of available Information Technology to achieve their business objectives. This could involve:
- Developing bespoke software applications
- Assessing security risks and managing risks to minimise losses
- Streamlining IT infrastructure to improving functionality and reliability
- Ensuring compliance with IT regulations
- Improving productivity through exploiting mobile technology
Please note: Vault guide to the top 25 Technology Consulting Firms is available to download for free: log in to Vault.
Consultancies often focus on particular industry sectors. e.g. financial services, retail and investment banks, insurance companies, hedge funds and other financial services firms to help them meet challenges which arise within their industry. This could include responding to:
- The effects of globalisation
- Changing market regulations
- The need to combat fraud by exploiting new technology
- Increased competition alongside decreased customer loyalty
It can be useful to review consultancy websites to read case studies of previous projects.
Public sector and not for profit consulting
Government departments and not for profit organisations often employ consultancies to develop their strategic vision and operational model. This could include:
- Structuring and implementing public private partnerships or private finance initiatives
- Modernising the services of government departments/agencies to make them more customer focused
- Devising strategies to encourage corporate donations to a charity and prioritise how this is spent
You can find links to political consultancies by exploring the Association of Professional Political Consultants membership list.
Healthcare consultancy consists of advising public and private healthcare companies, pharmaceutical organisations, government and international organisations about their business plans, strategies and policies.
Human resources consulting
"Advising on personnel policy, manpower planning, job enrichment, job evaluation and industrial relations" - Institute of Management Consultancy definition.
Consultants will focus on one of their client's biggest assets, their employees, and the policies that they have in place to recruit and manage their human capital. This could include developing and implementing policies on:
- Handling occupational stress, harassment and bullying
- Monitoring absenteeism to reduce costs and disruption to services
- Providing cost-effective staff training
- Retaining executive talent through incentives