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Tough jobs market for consultants wanting to jump ship to industry
Consultants seeking to escape the industry downturn are encountering strong competition for “transformation” and “strategy” roles at sought-after companies.
It is a bleak situation both for advisers wanting to leave the key firms and for those forced to look for new opportunities because they were cut as part of sector-wide cost reduction measures that have happened during the past year.
Ilan Leshetz and Asha Walsh, of Oaktree Talent Group, say lifestyle considerations are a factor in consultants wanting to exit their firms. Dominic Lorrimer
“Competition for industry/in-house consulting roles is high,” said Brook Coxon, co-founder and director of specialist recruitment business Lemon Talent.
“Many of the consultants who were made redundant from consulting firms are favouring a move into industry, either they are wanting to try something new or feel they have been ‘burnt’ from consulting.”
He said this group of job-seekers “coupled with the lack of roles within industry has meant competition is very high”.
Mr Coxon specialises in placing and sourcing management consultants for consulting firms and industry with salary ranges that span from analysts on $60,000 all the way through to directors earning $220,000-plus. He said that roles with “transformation” or “strategy” in the title were quickly attracting heavy interest on platforms such as LinkedIn.
A review of LinkedIn job ads with “strategy manager” and “transformation” in their title by The Australian Financial Review showed most had at least dozens of applicants, while those from well-known companies usually had more than 100 candidates seeking the position.
Making the situation more competitive, Mr Coxon said, was that industries known for poaching former consultants for in-house transformation teams, such as financial services and telcos, were themselves cutting staff.
He said this has led to companies hiring former consultants “on a fixed term/contracting basis, but day rates are a lot lower than expected”.
The major consulting firms have been hit by a pull-back in private and public sector demand. Government agencies in particular have scaled back work following the PwC tax leaks scandaland as Canberra seeks to rebuild skills within the federal bureaucracy.
Partners at the big four consulting firms have also been told to expect their profit shares to be down this financial year, by double-digit percentage points in many cases.
The firms themselves have also reined in hiring, as indicated by the total number of Australian-based job ads for the five major consultancies (Accenture, Deloitte, EY, KPMG and PwC) falling to about 700 in mid-June, from almost 1700 at the start of July last year. This measure does not account for use of other channels for recruitment, nor when one job ad refers to several open positions.
Mr Coxon said there are renewed hopes at major firms that there will be “an increase in demand for services early on in the new financial year, but it seems clients are still slow to make decisions and commit to projects”.
Mid-sized firms were benefiting from the shift away from the major firms as clients seek “more specialised advice rather than committing to larger implementation projects”, he said. In particular there has been an “increase in demand for procurement consultants, and the boutique firms in this space have been growing”.
Lifestyle change
Asha Walsh, of Oaktree Talent Group, said that lifestyle considerations were also a factor in consultants wanting to exit their firms.
“We are hearing from a number of consultants that they are overworked and can’t maintain the hours each week,” Ms Walsh, an associate partner at the firm, said.
“This is the first time in a while where we are seeing people leave without a job lined up so they can find the space to work out what they want to do next and the headspace to interview properly.”
Ms Walsh specialises in placing candidates, including consultants, into strategy and transformation roles with base pay ranging between $150,000 and $250,000,
She said that consultants typically leave after two to three years in the role “when they have gained the foundations and look to move into industry and start specialising or seeing the impact of their work” or at manager level “when they realise they don’t want to continue down the partner path”.
Strategy consultants feel ‘restless’
There has also been an increase in consultants from strategy firms such as McKinsey and Boston Consulting Group seeking to move into industry roles.
Ilan Leshetz, the co-founder of Oaktree Talent Group, said that he has seen an uptick in applications, inquiries and referrals during the past six months from senior advisers at strategy firms.
“In some instances, it’s driven by a lack of sufficient consulting work at the scale they’re used to, causing many to feel restless,” Mr Leshetz said.
“Also there has been a greater shift to more cost-out transformation and less growth strategy type work across the board.”
He said that others want to “reinvent themselves in a corporate setting” with “better work-life-balance and stability or certainty” in their daily working conditions.
Mr Leshetz said that most strategy firms were only hiring for specialist skills but are also “desperately trying to hold on to their best people even if it means losing money on them in the short term”.
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