Consulting firms are pushing back starts for recent college grads. More bad news to come?
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McKinsey, Bain Delay Some M.B.A. Start Dates to 2024
Top consulting firms say job offers are secure, but start dates are getting pushed back; EY cuts 3,000 workers in the U.S.
McKinsey & Co. told students that they will learn their start dates with at least two months’ notice.
By Lindsay Ellis, WSJ
Updated April 17, 2023 5:58 pm ET
Consulting giants McKinsey & Co. and Bain & Co. are delaying start dates for new M.B.A. hires, or in some cases paying them thousands of dollars to put off starting their jobs.
Consulting firms are among the biggest recruiters of business-school talent. Delaying the start dates for so many fresh grads is causing anxiety on campuses and suggests these businesses may have wider concerns about the economy.
Bain told M.B.A.s 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.
At McKinsey, many M.B.A.s 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.
The decision to push back start dates into next year in some cases is an about-face for the consulting industry, which boomed during the pandemic as companies sought advice about how to revamp and adjust their businesses.
On Monday, Ernst & Young LLP, the accounting and consulting firm, said it would cut about 3,000 U.S. employees, or less than 5% of its workforce, after assessing current economic conditions. KPMG LLP said in February that it would lay off several hundred people in its consulting division in February, according to a spokesman.
Delaying start dates by months for new consultants “becomes more important when the economy is in a downturn,” said Keith Bevans, Bain’s global head of consultant recruiting. “We try to encourage more people to start earlier when times are busy.”
The campus of Harvard Business School.
PHOTO: MADDIE MEYER/GETTY IMAGES
Consulting is one of the highest paying post-M.B.A. jobs, with median salaries reaching $175,000 for students who graduated in 2022 from Harvard Business School, the Wharton School of the University of Pennsylvania and the University of California at Berkeley’s Haas School of Business, according to the schools.
Top consulting firms have been in a war for talent in recent years, offering internships and some full-time roles to incoming M.B.A. students before they even set foot on campus. Hiring season in business schools tends to be active in the fall, when second-year students lock down offers for spring.
An analysis this month by William Blair & Co., an investment bank, found that consulting firms have been more cautious in hiring this year, with job postings with the Big Four firms, Deloitte, EY, KPMG and PricewaterhouseCoopers LLP, declining 62% year over year.
As technology companies shed workers this school year, some students said they were drawn to consulting as a more stable career trajectory, making for a competitive application process. That said, technology companies are regular corporate clients of consulting firms, so that shrinking sector could have an effect on consulting demand.
Bain is trying to incentivize M.B.A.s to pursue new interests before joining the firm, though it is committed to putting these hires on the payroll eventually.
“Go on an African safari or take a painting class!!” reads one document for Bain’s new hires that was reviewed by The Wall Street Journal. “Write a book or become a yoga instructor!!”
Seeking volunteers to commit to a start date almost a year away is a new practice for Bain, Mr. Bevans said. Some students volunteered or were assigned start dates in January 2024 and will receive half the pay on offer for an April 2024 start date, according to the document.
Bain has hired a similar number of M.B.A.s as in prior years, Mr. Bevans said, adding that having some start in January after spring graduation has been done before.
The delay decision from consultants is one of many economic indicators that have produced mixed signals.
Many economists have been expecting a recession as inflation and interest rates have remained at higher levels than previously predicted. But months of strong job reports have confounded those expectations.
In March, however, wage gains slowed.
While Bain’s new hires are finding out when they’ll start their new jobs, most M.B.A.s hired to work for McKinsey don’t know when they will start. McKinsey-bound M.B.A.s are comparing notes on what the company’s staff has shared with students, and annoyance is building, according to the students with offer letters.
McKinsey is eliminating up to 2,000 positions, largely in professional support functions and not client-facing roles.
McKinsey told students that they will learn their start dates with at least two months’ notice, said Lisa Hurst, the firm’s director of talent attraction for the Americas.
Ms. Hurst said she expects students to start getting notification of their start date soon.
After the online publication of this article, Ms. Hurst told the Journal that all M.B.A.s who will start full time in 2023 will learn their start dates within 24 hours. Others will learn that they will start in January or February of 2024, with a precise date to follow.
The uncertainty has prevented some of them from finding short-term work or looking for apartments, according to several business-school students with consulting-firm offers. M.B.A.s will likely wait for a date and start whenever they are allowed, according to two of the students with offer letters.
Last year, highly ranked M.B.A. programs sent hundreds of graduates to McKinsey, Bain and Boston Consulting Group, school employment reports show. In some cases, including at Columbia Business School and the University of Chicago’s Booth School of Business, those consulting firms were among the most common first jobs after graduation.
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 M.B.A. hires their start dates over the past few weeks.
Write to Lindsay Ellis at email@example.com