Many management consultants hardly complete two or three years in their jobs before they realize that there’s more to life than consulting. Consultancies have an “up or out” culture, meaning that many of those who feel they can’t make it to partner level, change jobs. Little wonder then that consultancies have a turnover rate of 15 to 20 percent.
Leave alone the long-term career prospects, not being able to the next level also makes many consultants quit their jobs. Some consultants leave consulting because they have found a better career path or a better package for the same job.
Frequent travel, which is part of a consultant’s life, wears down many consultants after a few years in the job. But some quit for professional reasons, too. Consultants are called upon to do problem-solving on behalf of their clients, but they are forced to move on and find solutions to the next client’s difficulties before being able to see what impact their solutions had on the previous client’s business.
Therefore, consultants shift to the industry and join the client’s side (corporates) so that they can not only offer solutions but also see the impact of their solutions and tweak their own solutions where necessary.
Some consultants leave for personal reasons, because they want to start a family or spend more time with their loved ones. They feel cut-off from their friends and families and fail to maintain work-life balance.
There are also other reasons such as not being able to choose projects or teams (see our post – The dark side of management consulting). The nature of the job and competition tell heavily on some consultants and some of them just quit.
Burn-out is a serious problem for management consultants. Consultancies try to get the maximum out of their consultants, and some somehow manage the pressure and some don’t. This is why some shift to industry or launch start-ups.
Their intense years in the consulting world equip strategy consultants with functional expertise and a wide network of top business leaders. Their knowledge and skills are in demand not just in consulting but also in other areas such as the corporate sector.
Many large companies employ ex-strategy consultants and have internal consulting groups that are headed by former consultants. Consultants are sought after for these corporate roles for their capabilities in research, project coordination, analytics, and staff management.
The pace of work is generally slower and the hours are shorter in the corporate sector. Besides, former consultants get an opportunity to develop an operating skillset. On the negative side, the pay is less and the freedom to choose projects or team members is limited.
A career in finance is another option for a strategy consultant. Although former investment bankers are seen as better for finance roles, corporations that need some operational experience would prefer an ex-strategy consultant over an investment banker.
Among finance roles, private equity is ideally suited for ex-strategy consultants. Ex-consultants can demand a good salary package and benefits and participate in projects that have a bearing on the industry.
Some opportunities are available in hedge funds, too. The job search should target funds that employ ex-consultants, such as macroeconomic funds that place emphasis on market research. Hedge funds also offer a good pay packet. Specialized funds may not provide ex-consultants many opportunities.
Asset management and equity research are tailor-made for ex-consultants. Top firms and firms that take up modeling-heavy projects are the ones ex-consultants should focus on for a job.
How about entrepreneurship? Given their exposure to a cross-section of industries and complex business problems, and their large network of top businesspersons, ex-consultants are in good position to launch their own consulting business. They can also join a start-up or launch one themselves.
Ex-consultants can also follow the path of Bobby Jindal (ex-McKinsey) or Mitt Romney (ex-Bain) and take up government roles. However, it is the least preferred option among ex-consultants. The benefit is government positions; the negatives are low pay, longer working hours, and a hazy career path.
Another good option is to join a top ranking business school. A couple of years in consulting could make one an ideal candidate for an MBA. Apart from gaining from the MBA experience, ex-consultants can also use the time to figure out their next career move and get away from consulting stress for some time. Joining a law school or another master’s or PhD program is also a great idea.
It is said that an operations consulting firm is a hybrid between management consulting and more typical consulting companies. Consultants tend to be around for longer here than in other areas of the consulting business.
Former operations consultants move into financial operations or corporate finance at companies. They can also move into strategy positions at Global 500 companies. As operating consulting firms do not focus on transactions and financial analysis much, not many ex-operating consultants shift to private equity firms or hedge funds.
Another area where ex-operation consultants could break into is investment funds that focus on operational transformation and turnaround.
Salary is not the biggest motivation for a shift from consulting to industry, though it is one of the motivations, along with four other categories—work hours, travel demands, personal situation, and professional challenges.
In fact, it is the weakest motivation among the categories, after work hours. This may be because consultants are aware that companies hiring them would not try to hire them cheaply.
Moreover, consultants switching sides to industry are willing to trade the opportunity of making a little more money for higher professional challenges. For example, they may want to take full responsibility of a functional area or P&L, which they may not get in consulting.
Changing personal circumstances such as bigger family responsibilities are a strong motivation. Experienced consultants, for example, may not want to travel much and may want to spend more time with their families. A shift to industry would suit them well.
Professional challenges such as higher leadership roles may also persuade consultants to shift to industry.
Strategy consultants may be the choosiest among the lot when it comes to moving to industry. They usually just don’t want just any role, but a role that would offer them growth and opportunity to develop their knowledge and skills in a new work environment.
Consultants moving to industry need to fit in. They need to create relationships in their corporations and build trust to be successful. Those moving to companies they had been consulting earlier should make clear to team members that they are now part of the company team and not an outsider.
Big corporations require ex-consultants and hire them for higher posts than job candidates without consulting experience. The most important area where consultants are employed is strategy, but ex-consultants are also hired for operations management and product management.
Many consultancy firms have launched placement services for consultants who want to enter the industry. These consultants can enter the industry without breaking ties with their company. The advantage for consultancies is that they are able to place former consultants in the industry who already know how consultancies work.
Ex-consultants’ skills in finance are much sought after by financial services companies including private equity and venture capital firms. These firms value ex-consultants for their strategy perspective and consulting tools.
Ex-consultants acquire experience in project management, data analysis, and problem-solving, and this makes them excellent candidates for management positions in start-ups. They are also ideal resource-persons for the launch of start-ups.
Finally, there is always the option of freelancing for ex-consultants after their tough grind over a few years. They can start their own boutique firms or choose freelancing.
As in some other sectors, consulting firms are increasingly finding it difficult to retain women consultants. There may be many women consultants at junior levels, but only very few of them stay on to become partner.
Initiatives launched by consultancies to retain women consultants have not achieved good results. However, these consultancies are continuing their effort to resolve the problems of women consultants who plan to leave their jobs, because from a business point of view, they would like to offer diverse consulting teams to their clients.
The reasons why women consultants quit their job are not very different from the reasons why young male consultants look for other career paths. Millennials place more emphasis on their work-life balance than previous generations. They don’t want to give up most of their waking hours to their paymasters.
References: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15