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MBA Job Growth In Consulting As Big Four Services Firms Expand

The big four professional services firms are expanding beyond their audit roots and hiring more, as the consultancy market experiences robust growth.

Tue Mar 10 2015

BusinessBecause
When it comes to consulting careers, strategy houses like Accenture and Bain & Co have been the most prized assets among business school graduates. But the consulting wings of the big four professional services firms are buoyant.

Those wings are now growing faster than traditional management consultancies, according to research, illustrating the power commanded by Deloitte, EY, KPMG and PwC as they move further into the consulting market.

All sectors are registering strong demand for consultants in the UK, the region now one of the most attractive in the world for advisory work, according to Source Information Services, which writes specialist reports on the consulting market, boosting job growth.

Professional services firms have traditionally relied on audit work for a bulk of their revenues, but gradually the balance power is shifting and consulting is becoming a larger part of their businesses.

The UK is a prosperous market but further afield recruitment demand for consultants is intensifying.

As the management consulting pie continues to increase in size, this translates into increased job opportunity for graduates of top-ranked MBA programs at traditional auditing groups.

Stephen Pidgeon, associate director of career development at the US’ Tuck School of Business, says: “As they rebuild and expand their strategy practices, they are increasingly looking to top tier business schools for their staffing needs.”

The standout consulting industries for the big four are retail and pharma, but new disruptive technologies are boosting digital practices across the board, particularly in Britain.  

Harry Gaskell, EY’s managing partner of advisory, says: “The UK economy is emerging from a five year hibernation, and it’s being bolstered by a pent-up demand to invest in and leverage the potential of new technology.” 

Fiona Czerniawska, director and founder of Source Information Services, adds that the growth of digital is increasing demand for consulting across industries. “Clients realise the possibilities for wide-ranging change, major transformation, and the rethinking of business models,” she says.

Source forecasts that the UK consultancy market will grow by 6% in 2015, and says 60% of its clients say their consulting spend will increase over the next 18 months.

Growth areas for consulting include in financial services and the public sector – the two largest sectors in UK consulting – both growing by about 6% compared with last year.

The financial industry’s appetite for advisors is being driven by increasing amounts of regulation, the volume of requirements from regulators showing no sign of abating.

Aidan Brennan, global head of management at KPMG, says: “Financial services clients want to draw breath but probably won't be able to do that for long – the need for real change in banking and insurance is huge.”

The biggest growth rates for consultancy services across industries were in technology, up 7.7% to £2.23 billion, strategy, which is up 7% to £1.39 billion, and financial management and risk, up by 7.1% on last year.

Strategy services were boosted by healthy M&A activity and clients grappling with disruption. “We’ve noticed from campus presentations that these firms are talking about M&A work,” says Tony Somers, Career Management Centre director at HEC Paris.

Business schools have also noted an increased appetite for dealmakers at bulge-bracket banks.

The retail sector is being radically altered by technology and the emergence of e-commerce companies like Amazon. This has spurred retailers to hire more consultants, pushing up the UK market by 9.7% overall.

Demand for operational improvement services remained robust at 5.1% growth – clients are still keen to increase productivity and cut costs.

And HR and change management consulting has experienced a revival, up 4.8% on last year.

The consultancy market has been bright for all advisory companies, but it’s the march of the professional services firms that stands out, says Source’s Fiona: “The performance of the big four firms could hardly have been better during the last two years.”

Yet management consultancy firms’ recruitment remains buoyant. About 30% of students at the highest-ranked business schools will now work in consulting firms such as McKinsey & Co, Accenture or Strategy&, formerly Booz & Company.

Julie Coffman, chair of Bain’s Global Women’s leadership Council, said last month that the management consultancy firm would hire at least 400 MBAs in 2015. “We’ve got to hire talent to keep up with our growth, and so we expect to a have a gangbuster recruiting year,” she said.

However, Tony at HEC Paris says: “I expect the EYs and KPMGs of the world to be the recruiters of choice very soon.”

The big four’s position in consulting has been strengthened by a period of robust M&A activity, with Deloitte having bought management consulting boutique Monitor Group, and PwC agreeing to buy Booz and Company. And EY last year agreed to merge with management consultancy firm Parthenon Group.

This is being driven by changes to the auditing market, such as new UK and EU rules that force listed companies and banks to change auditors after 10 years, which have shaken up the accountancy profession.

“It’s the single biggest issue facing the big four as they are forced to walk away from what is in some cases a substantial chunk of their client base,” says Fiona. “They will hope to make the revenue up elsewhere.” 

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