Why Would Anyone Go Into Consulting?
Mod Note (Andy): I put this on the frontpage because of the high quality of responses inside the post, take a look...
After going through the recent recruiting season as a junior and coming out with an MBB offer and a few in banking, I have to ask: why would you go into consulting?
- As a junior, you get paid way less and travel an arcane amount
- The hours at the office I received an offer at is also known to be extremely harsh and upwards of 80 hours a week
- The skillset acquired seems very limited. I went through a few case interviews but still have no idea what consultants actually do
- How do you pursue exit opps when everything on your resume is confidential? You have nothing tangible to your name vs. "worked on $xxbn deal"
- Senior members of the team tried very hard to push me on the fantastic 'culture' and how everyone is a family, which seemed a little awkward to me
- Everyone I met in consulting seemed extremely risk averse. The guys in banking though seemed much more like heavy hitters that were more ambitious and gung-ho about everything they do3
As a junior in college, is there anything I'm missing? What does Bain offer that Blackstone doesn't?
Consulting vs. Banking Analyst Experience
In the OP, the user questions if consulting or banking is a better place to start your career. The user touches on a few points - hours, pay, skillset, exits, and culture. Our users touched on each point below.
Lifestyle Differences Between IB and Consulting
The OP highlighted that consulting averages 80 hours a week with a great deal of travel. However, our users highlighted that while there is limited travel at the junior level for banking, hours will be closer to 80 - 110 hours a week (during hectic periods).
Junior analysts in consulting will be tasked with a great deal of travel if they don't live in the city that their clients are in while banking analysts will be tied to their desks in almost every situation.
From a culture standpoint, both bankers and consultants may claim to have a better culture as it will all be determined by the group that you work with and if you vibe well with them. That being said, consulting has a better argument to make for winning the culture wars as the hours are somewhat less and the work is thought of as more enriching than the work done by bankers.
You can check out a perspective from a former management consultant.
Skill Development and Exit Opportunities Between IBanking and Consulting
When considering future career path options, it is important to compare the skills gained between the banking and consulting. In banking, you will develop modeling and financial analysis skills and get exposure to how the buyside works by making the CIMs that PE funds analyze and that corporate development offices of major companies receive. Analysts get experience making slide decks and listening to CEOs talk about their businesses on conference calls.
For consulting, analysts develop qualitative and decision making skills. They will work directly with company management to attempt to help businesses create strategy or make meaningful improvements to existing strategies.
From an exit opportunity stand point, consultants exit well into top tier business schools and to fortune 500 companies. Bankers will have a clear pathway into private equity firms, hedge funds, corporate development arms, and top business schools.
Read More About Consulting on WSO
- Management Consulting Salary & Compensation, Average Bonus In Consulting
- Choosing between Mckinsey, Bain, and BCG?
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ROFL incorrectly using the word arcane...
If you do not like travel then it is not for you.
If you think 80 hours is a lot, then it is not for you. In that case, banking is much worse for you with it's 90-100 hours weeks!
The exit opps work. Getting into MBA is easy afterwards. Getting into an excellent position at a F500 company after MBA is easy also. (ex: Some classmates at my MBA program who were MBB are now going into some very good positions with Apple and Google)
If you already know right now that you want to go to Apple or Google and can get in, then consulting is not for you.
If you want to do the same thing for an extended period of time (1-2 year horizon vs 2-6 month horizon) then consulting is not for you.
Is being risk averse/high risk your definition of negative/positive traits? In that case ,maybe you should look at making professional base jumping or gear-less free-climbing a career. Otherwise you should consider the type of people you're running into and thinking, are these the people I want to hang out with during/after work? If that's the bankers (if you get off of work) then sure.
What does Blackstone have to offer that Bain doesn't? What does being a doctor offer that being a lawyer doesn't? What does computer programming have to offer that being a teacher doesn't? Why is your last question so ridiculous?
Are you trolling?
lol @ 90-100 hrs workweek avg for banking - could be less, could be more dependent on group
lol @ getting into MBA easily - getting into an MBA is difficult no matter where you go, unless it's like Devry
lol @ time horizon - u can leave anytime, no one is stopping u
lol @ after-work activities - i guarantee u no one wants to hang out after a 14 hour stint
lol @ your last sentence - seems like you're having trouble even answering your own rhetorical questions
overall 3/10 attempt, nice try
You seem to be taking all his statements out of context: as individual stand-alone statements, as oppose to a response to OP's comments.
1) All he was stating that hours in consulting are generally lower than banking. Boviosuly lie you said, it will depend on the group you're in banking, and also the project you're assigned to in Consulting. Regardless, GENERALLY, consulting will have less hours.
2) I agree that stating "getting an MBA is easy" may be a stretch. Its difficult regardless. However, consulting would provide a foundation for the app. I wont get into which is better (IB vs Consulting), since idk, but both these professions will increase ur chances to getting into a top MBA, it wont be easy, but will increase ur chances. This is all he was stating, which is in reference to exit ops that OP was asking about.
3) Time Horizon: he was just stating the purpose of consulting is short-term projects and work constantly changes. Obviously everyone has the ability to quit at anytime. He was simply stating that a big aspect of the consulting profession is that, generally, projects are short and varied. So if you are a person that prefers/excels at doing the same thing for an extended period of time, then consulting is not for you.
4) I agree with you on this point, I wouldnt want to see my team after 14 hrs, but then again, everyone is different. Generally speaking though, that's the whole idea of "fit" concept, finding people that you will be willing to hang out with post a 14-hr work day, since you'll all be traveling together.
5) They lost me on this part.... so no comment.
Here are some reasons (laid out as they relate to your points):
This is heavily dependent on the person, but travel isn't necessarily bad, especially when you're straight out of college. Yes, it's tiring and gets old, but it's still a chance to live on an expense account four days a week and see a few new cities/countries. As an added bonus, you'll rack up a ton of miles and hotel points so your vacations will be close to free. With alt/flex travel, it also makes it easy (and nearly free) for you to visit friends on the weekend who live in a different city than you.
The overall hours might not be all that different between consulting and banking, but in consulting you almost always get your weekends to yourself. Besides, when you're on the road M-Th, there's not much else to do besides work; it's not like you could go back to your home or hang out with your friends if you weren't working.
There's a lot of good info. about this on WSO, but the general consensus seems to be that the skillset acquired in consulting is a bit more broad and transferrable to different industries than banking (where the skillset is quite limited).
Your resume doesn't need to list client names to have weight behind it. You're still able to demonstrate what you did, what your impact was, etc. without naming who the project(s) was for. You can use generic descriptors (i.e. top 5 pharma company, etc.). Besides, if you're at MBB, headhunters will be coming to you (especially at the post-undergrad level) more often than not.
Okay. This is firm specific and has nothing to do with consulting. Maybe you aren't a good cultural fit with whatever consulting firm extended you an offer.
This point of yours isn't really addressable. Being risk-averse isn't necessarily bad, and you can't really draw a conclusion about the entire consulting industry based on your limited interactions with a few consultants (the same goes for your conclusion about bankers being more risk-tolerant).
In the end, banking and management consulting are two entirely different industries (who often get lumped together because they're "prestigious") and you need to join whatever industry you believe best aligns with your long-term goals. Given that you were able to secure offers from several banks and an MBB, you should be more then capable of doing adequate research to make an informed decision. And just in case that decision turns out to be the wrong one, you can always re-recruit in the fall for full-time and switch industries. Good luck!
LOL heavy hitters huh. You interviewing or dating bro?
I worked in MBB for a summer internship and turned down my full-time offer to work at an investment bank that went bankrupt about two months after I started. Best decision I've ever made though. MBB is not for everyone, but they market themselves really well into seeming like a great fit for the best/brightest when really you need to have a certain personality type so you don't despise the work-life balance. The things I didn't like ranged from the obvious travel/social isolation to the less obvious things such as work flow that was extremely boring/unnecessary..and the fact that (at least in my year and my MBB) some of the other interns were literally the biggest tools I have ever met - people I would have never hung out with in college, and people who just remind me of the proto-typical toolish student that sits in the front of a class and always raises their hand to make themselves heard.
You don't really get the work hard play hard finance mentality with MBB in my opinion, the testosterone level is significant lower which isn't a bad thing, except that I could actually feel my personality eroding at certain ponts. I also gained like 20lbs in 12 weeks because I didn't have consistent access to a weight room and very consistent access to a $100 food per diem.
Of course, a lot of the senior colleagues and the post-MBA guys were really awesome, and a few of the other kids I interned with are still my close friends (and a lot have since moved to NYC). I also probably wouldn't have gotten to where I am now without MBB on my resume. When I was rotating through desks, my specific MBB study from the prior summer was what clinched my spot on my team, so that was pretty clutch.
One data point: out of the class of ~50 interns I worked with, of those who accepted FT offers (about 75%) about 75% of them who worked full-time were done with consulting after just two years - either for MBA, operational work at a PE, or most commonly working at a corporate before eventual MBA.
Another data point: Almost all of them complained about their jobs every time I talked to them, looked gaunt, and fell out of touch with most others. Also, the percentage of their photos on social media that was with their coworkers was way higher than what is appropriate for someone in their 20s that should have a life.
A third data point: Having friends who are consultants is awesome because they can expense meals when they visit you in NYC (as long as they don't live in NYC so they can use a travel budget). So always meet up with your friends when they visit NY if they are coming from out of town. And have them use that corporate card.
Current MBB'ER chiming in.
Traveling for work can get tiring, so I'll give you that. But boring and unnecessary work comes up in every job, especially in client services. I have plenty of banker friends who find their jobs incredibly mechanical and mundane. At the end of the day, what keeps people going in both consulting and banking is the feeling that you are doing something interesting, exciting, and/or meaningful. I never felt that way about the work bankers do, and you didn't about the work consultants do. It all comes down to what you want out of your job. But let's not categorically dismiss an entire field.
And, to be honest, I felt that way about the people I met in banking. Many of the bankers I met seemed entirely to be driven by money or prestige, and I couldn't imagine working with them on a daily basis. I suppose this also comes down to your personality as you pointed out.
The weight thing depends entirely on your self control. Yes, you have access to a nice per diem, but that doesn't mean you have to take advantage of it every night and eat unhealthy food. With time, you learn to eat more healthily even on the road. I also found having a gym in the hotel very convenient. Hotel gyms may not be as well-equipped as my home gym, but a lot of them are good enough for me to get a good workout in 2-3 times a week. You just need to allocate that time and stick to it.
Not sure what you're trying to say here. Consulting firms are very clear about the fact that it's not a long-term career for most people. One of the biggest benefit you get from consulting is the breadth of career options you get. So I'd say this is a good thing. If you like the job and perform well, you can stay. If for whatever reason you no longer wish to say, you have a ton of choices you can choose from.
People complain about their jobs to their friends--this is not limited to consulting. I have both banker friends and consultant friends, and they all share complaints about their jobs with me. But, in my opinion, my consultant friends and I are much happier than my banker friends because we actually get to have a life outside of work and do things that we like doing. (Most people work 60-70 hours a week at most MBBs.) We get most weekends off and sometimes have a good amount of beach time in between projects. We also agree that, while things get can get tough/frustrating, our firms look out for their people to make sure that they are constantly learning and are satisfied with their jobs.
And I don't know why the second thing keeps appearing as a negative. I genuinely enjoy the time I spend with my colleagues, as do my college friends at other MBB firms. The difference between bankers and consultants is that consultants actually have a good amount of time to go do social things outside of the office together. We grab drinks, go to concerts, go out, and even take weekend trips together. We consider ourselves more than coworkers but friends. It's one thing that you didn't like the people at your MBB. But don't know how coworkers enjoying having out together and actually becoming friends can be viewed as a negative in general. In my opinion, the friendship I have built with my classmates makes my firm a much better place to work.
Sadly, among friends I've observed that decisions between banking and consulting are still primarily prestige (and more practically, exit opportunity, which is highly correlated with prestige) driven. It's not unheard of for people to turn down a second tier BB offer for McKinsey, and then turn that down for BX. They don't care whether they're working as a consultant or a banker as long as they get where they want to be, which is PE or HBS.
The balance of power at higher levels is with people who control capital. PE/HF and the bankers who serve them are closer to the capital. MBB receive a fee to provide them advice (as do bankers, but bankers work with the pre-deal while MBB is optimizing the deal).
People who were head of individual practices at my MBB would fly in for meetings with senior VP (mid30s) level people in PE (I worked in the PE practice at the MBB I was at). The members of my team would talk about how awesome the PE people were in terms of success. And I think there was a chip on some of their shoulders as well, because my MBB team knew way more about the operational aspects of the industry, yet were simply advising and optimizing the investment someone else made - I was actually taken aback by how much 'boots on the ground' work was outsourced to consultants,m and I can see why it would have been irritating to be focusing on low-level work where the PE firm we were advising benefited from the high level story and upside.
If we are comparing MBB -> MBA -> unlimited opportunities, then I certainly think it can be a great choice. But if you look at the more set path of IB -> PE - > MBA - > PE, or IB -> PE -> senior level at PE, that is a superior choice to being MBB -> MBA -> senior MBB in my opinion, because the latter you are advising, the former you are the one making the decisions. So comparing IB to MBB is hard, because no one actually wants to stay in IB or MBB, but the path towards perceived success is easier from a top IB group than a top consulting group if your goal is to control a company.
A lot of my views on MBB and why I think finance is superior in so many ways is because of my personal experience at MBB (which as a positive experience but eye-opening) and subsequent experience on Wall Street, first at an IB and then in Mega-PE. In my current role I talk to people at MBB for advice too. They are extremely smart and talented, and I doubt they have a hard time getting gigs in capital-controlling roles too. However, I still think if your personality suits both and your goal is to become as important as possible at an early age, with as little risk as possible, IB->PE->senior PE (or HF) outweighs MBB.
I'm sure MBB has way more CEOs of startups and stuff too - its really a risk/return issue.
Really great post big unit - thank you for your insight. I think your balance of power framework is apt, but your focus on finance is limiting. There are other ways to be successful and add value outside of high finance, like owning equity in startups, being an executive in the corporate world, or being successful/powerful in a completely different career, like non-profits, politics, social entrepreneurship, policy activism.
The first problem with IB, from a purely exit opps perspective, is that the opps are mostly in finance, not the other sectors above. The plus side is that PE and HF are generally easier to attain than for consultants, but the downside is that every other sector I mentioned is harder to break into on balance. If you want to exit into the F500 you get placed into back office corp fin roles instead of product management and marketing roles. You get typecasted as a finance guy everywhere else, too.
The second problem with IB from an exit opps perspective is that the high finance industries it places into are both hyper-competitive and non-growth. PE is not growing and HF returns are down again in the biggest year for returns in the last decade. Good for you that it worked out, but these forums are filled with stories of kids from BBs who couldn't get a pre-MBA PE role, and even more disconcerting, stories of kids with BB and pre-MBA PE roles who fail to find a post-MBA partner-track role during MBA recruiting. It's a serious gamble these days to presume that if you get an IB offer you will be able to leave for a glamorous buy-side role soon after. Especially if your offer is from any bank that isn't Goldman, MS, JPM, and a handful of elite boutiques.
Then there's the elephant in the room, which is why would you ever work in IB if you're not genuinely interested in finance? This seems to be the most important question for anyone choosing between IB and MBB, and it makes the choice pretty easy. Unlike for IB, you see ex mgmt consultants in a wide variety of fields outside of finance and even business. You see them in the White House, leading some of the hottest social entrepreneurship companies, running VC-backed startups, in the corporate C-suite, and leading major policy reforms. For a random example, David Coleman, president of the College Board and the man who wrote and championed the Common Core State Standards Initiative, which is probably the most important change to education policy in America in the last decade, is ex-McKinsey.
You don't see this nearly as much in IB, despite the fact that it hires more students every year than consulting and that it has had a pipeline to the top student talent (which you might argue could do anything in their careers regardless of whether they started in IB or MBB) for at least a decade longer than consulting. You could argue that this started as a temperament and self-selection thing, but eventually it has become institutionally reinforced, to the extent that the network of ex-MBB guys will tend to hire other ex-MBB guys until stereotypes become reinforced.
This point has been made, but I'll re-iterate. The answer, if there is one, to this question of banking vs. consulting is highly dependent on who you are, your life situation and what your future goals are.
For background, I interned in IB and decided that consulting was more up my alley. I couldn't be happier and love my job - the travel, the work and my teammates. Not everything is rosy, but no entry-level job (or senior job for that matter) is.
I have a good buddy who joined IB FT out of school. Makes boatloads more than me. Yet, when we do find time to catch up, he is always raving about how I'm flying somewhere on weekends for alt-travel, pursuing my hobbies and spending time with friends. When we do go out, he buys bottles. I spend maybe $100 on a night out, he spends $700. Is he happier with his night? Maybe, maybe not. But I don't think I've had a bad night yet because I didn't spend as much.
He can do things I can't and vice versa. He can blow $2000 on a watch or suit and not bat an eye. I can fly my girl out somewhere for a weekend getaway. He can afford to do so, but he doesn't have the time. He wants to work in PE one day. I want to move up in a F500 and move into management for a tech/manufacturing/aerospace company.
At the end of the day, you have to decide who you are and who you want to be in the future. It's a fun rivalry, but let's not over-analyze this to death. These are, outside of truly unique opportunities, the best jobs for young people out of undergrad if you are pursuing a career in business. If you work in either, be thankful.
Passionate about business and wanted a broad perspective. Little idea of what I wanted to do in the future. Wanted a fast learning curve with smart colleagues and after a stint in IB realized pretty quick that was absolutely not where I wanted to be.
I think you have to evaluate your career direction with 3 main factors: 1. The kind of people you get to work with 2. The kind of work you do on a daily basis 3. The skills you build/the exit opportunities for that final career destination. Realize that most people in both IB and consulting will end up leaving the industry within 2 years. I think that kids are often way too focused on their careers immediately after college and forget to consider how that early career leads them to their final goal. Network with consultants and figure out if they're people you would want to work with (I noticed from my personal networking that consultants and IB'ers were generally different people even though they may have had similar values/interests). Through networking, you also get to understand what you do day-to-day as an analyst in a BB vs MBB for example. The kind of issues you tackle as a consultant are not the kind of issues you tackle as an investment banker. Lastly, take a look at the traditional exit opportunities/skills you build. As a consultant, you generally build a general manager toolkit (leading a business).