Consultants outpaced by tech firms hiring top MBA graduates
MBA graduates from four leading business schools are still most likely to head for the consulting sector when starting their new careers, with the MBB firms seeing the largest influx of MBA talent in 2018. However, according to a new report, tech sector giants Google and Amazon are quickly becoming just as desirable to graduates in the sector.
The Master of Business Administration (MBA) degree originated in the United States in the early 20th century. As the country industrialised, many companies sought scientific approaches to management, creating demand for such a degree. Over the last century, the standard MBA has evolved to cover various areas of business such as accounting, applied statistics, business communication, business ethics, business law, finance, managerial economics, management, entrepreneurship, marketing and operations in a manner most relevant to management analysis and strategy.
As a result of the MBA’s continued importance in the business world, it is perhaps unsurprising that management consulting remains one of the most popular destinations for holders of the degree. A career in consulting is highly versatile – one day a professional may be working on market research, the next on competitor analysis, while developing a management dashboard or helping a client with a big change in management. Consultants also travel constantly to meet the demands of clients all over the world – making it the ideal place for an MBA graduate to put their skills to work quickly.
Interestingly, however, while the likes of McKinsey & Company, Bain & Company and Boston Consulting Group (BCG) still attract the highest number of MBA recruits, their intake from the demographic are either stagnating or declining. According to a new study from industry website efinancialcareers.com, the consulting sector is seeing its popularity among MBA graduates flag when compared to the booming intake of the technology sector.
Researchers from efinancialcareers.com compiled data from the world’s four top business schools – London Business School, Columbia Business School, University of Chicago’s Booth School of Business and Northwestern’s Kellogg School of Management – to get a better idea of which companies are trending in one direction or the other. According to the analysis of the single UK school and three US institutions, of the 11 companies which employed the largest number of their graduates, four were consulting firms.
McKinsey saw the highest number of MBA entrants in both 2015 and 2018, despite a 9% drop to 156 in the latest figures. MBB rivals BCG and Bain followed closely, with Bain being the only consultancy to see a small increase of intake of 3%. Of the four consulting firms in the study, Big Four professional services giant PwC brings in the fewest MBA hires – with this number having halved in the last three years to sit at a humble 21.
This may in part be due to the fact that UK consulting firms are beginning to look beyond elite universities for new recruits, amid a growing talent shortage in the UK. According to a recent study from the UK consulting industry’s representative body, the proportion of the sector’s intake consisting of Oxbridge graduates has seen a nine-point fall since 2011, and the Russell Group has seen a 19-point drop over the same period.
However, taking in data from both the UK and US, efinancialcareers.com’s study also shows that consulting’s fall in popularity has been accompanied by a rise of demand elsewhere. Tech giants Google and Amazon saw a 75% and 67% increase in the number of MBA recruits arriving at their firms, respectively. While the finance, consulting and professional services sectors have been looking to boost diversity in recent years, it seems Silicon Valley has little trouble with relying on elite educational facilities to staff its operations. Microsoft does constitute an exception to this, with its MBA intake having fallen by 7% in the last three years.
At the same time, large investment banks have recently fared poorly in attracting top MBAs. Not one investment bank with enough statistically significant data hired more MBAs in 2018 than they did in 2015, at least from the four schools in question. This is further in line with a recent report that found many junior banking professionals are considering shifting to the world’s largest strategy consultancies. According to a number of young professionals in both sectors, MBB firms are benefitting from a perception in banking that junior staff have limited future career prospects, and are over-burdened by under-stimulating and repetitive work.
