By Jess Scheer
Given the lack of hiring the last few years, campus recruiting was clearly a buyer's market. But not anymore. That's the biggest take-away from this year's recruiting season, based on a Consulting survey of more than 60 MBAs attending the country's leading business schools, as well as in-depth interviews with senior recruiters across the profession.
Consulting firms are hiring in bigger numbers than they have in past years. For example, The Boston Consulting Group's U.S. MBA Class of 2010, and its summer's internship class, will be the largest in the firm's history. Bain & Company's class of 2010 will be among its biggest ever and next year's class is on pace to easily be its largest ever.
"Campus recruiting is now incredibly competitive. When you find great candidates, they all have multiple offers. This was not the case a year ago," says Kristen Clemmer, Booz & Company's director of North American campus recruiting. And by all reports, next year is going to be even more competitive. "We aren't going to double our recruiting class, but it will be a significant increase [in size over the class of 2010]."
"We're now seeing consulting firms return, and in far bigger numbers than we saw a year ago. Momentum is continuing to increase, particularly among firms that are looking for first-year summer internship talent," says Mel Wolfgang, head of Americas recruiting for BCG.
Fear of not landing a job upon graduation is leading first year MBAs to take the summer internship process far more seriously, which, in turn, is causing consulting firms to refocus their recruiting efforts earlier in the process.
"First year MBA students appear to be placing far greater importance on internships than we saw in prior years. They seem to want to have a job offer in their pocket before entering the fall recruiting process," says Lori Cox, Kurt Salmon Associates' director of talent acquisition and management for North America.
Misty Rallis, A.T. Kearney's recruiting manger for North America, is seeing a similar trend. "What's been happening is that the classes of 2009 and 2010 realize that the number of students with full-time jobs is down so much from historical levels. As a result, students are looking further ahead. They worry that there may not be as many opportunities come fall.
So, they want to go into this summer knowing that they've got full-time jobs locked in. They are really contemplating where they want to go," she says. "Students' decision making process is changing as a result. They're thinking, 'Well, this other firm made a higher percentage of offers to their interns, so the chances of getting an offer at the end is greater [if I go with that internship],' " Rallis says.
And among strategy consultants, who have long prized the value of summer internships, the same trend is also holding true. "The summer associate job search is much more serious than it was two to four years ago," says Mark Howorth, Bain's senior director of recruiting. "It used to be that an MBA's summer job was more about where, geographically, they wanted to spend their summer. Now, they're thinking about it in the context of their career goals. They're thinking about where they want to end up working. And it's leading to a much more aggressive job search environment."
The share of summer interns accepting full-time offers upon graduation is on the rise. For example, in 2009, 80 percent of A.T. Kearney's summer interns accepted full-time jobs with the firm the following fall. "In past years, our hit rate for summer interns was about 55 percent. I was expecting it to be higher, maybe 65 percent to 70 percent. We're expecting competition to be fierce next year. I'm only assuming we're going to be able to convert 65 percent of this summer's interns," Rallis says.
But there is a natural cap to how many summer interns a firm can hire. According to BCG's Wolfgang: "The tension we go through is that while we are absolutely committed to summer classes, we are also constrained by the number of great experiences we can create. It is going to be pretty good to be a second year MBA in the class of 2011. It is going to be a seller's market."
Consulting firms aren't just competing against each other for top talent. "This past fall we started to see the investment banks slowly re-emerge. Last year, we saw almost no investment banks or private equity houses. There were a few on campuses in the summer of 2009. But in the fall of 2009, they started to return, and they are back in full force right now," BCG's Wolfgang says.
A.T. Kearney's Rallis agrees. "The banks are back. They got in early and started taking people out of the process. We're all going after the same top talent."
Firm culture, job satisfaction, and work/life balance are key considerations. But so is cash compensation. Consulting found that most leading firms offer very comparable compensation packages. For the Class of 2010, base salaries averaged about $120,000 plus signing bonuses of $20,000 and an expectation of annual performance bonuses of between 13 percent and 16 percent. (In some cases, individuals also negotiated for tuition remission and retirement benefits.)
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Every fall, consulting firms face the same timing challenge: the onboarding of newly minted MBA talent doesn't necessarily coincide with a parallel surge in new demand.
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