Consulting firms backing away from job offers
Associated Press
BOSTON — A Columbia University MBA in her pocket, Andrea Forgacs was looking forward to starting her career as a management consultant at Cambridge-based Sapient Corp. last month.
Associated Press
Then she got the phone call, the type of call that's become painfully common for recent college and business school grads going into the field: The job was on hold, the company told her, at least until February.
Andrea Forgacs faces a predicament unimaginable even a year ago: The recent graduate was told that the consultant job she expected to start last month is on hold, at least until February.
"It's demoralizing," she said. "We went from being wined and dined and treated as though we were kings to nobody wants us."
The predicament faced by Forgacs and thousands of other recent grads hoping to become consultants would have been unimaginable even a year ago.
During the 1990s, consulting firms descended on prestigious campuses, using fat recruiting budgets to woo ambitious students.
The consulting field was a popular choice for the best and the brightest because little experience was required: college grads could make $50,000 or more a year, MBAs more than $100,000. They also would be exposed to a variety of industries, and after a couple of years as consultants could latch onto even more lucrative jobs with former clients.
Then, suddenly, the bottom fell out of business spending, and the consulting business dried up.
"Consulting firms used to go on campus, target the MBA schools, back up the truck and load 'em up," said Tom Rodenhauser, founder of Consulting Information Services, which tracks the industry. "This year they're not even pulling the truck in."
Hiring slowdowns are nothing new. But this slump came so fast that companies found themselves laying off existing workers just after signing another new crop of graduates.
Now they are postponing offers they've already made.
"I've been in the business for over 15 years and I've never seen start dates deferred," said Jackie Wilbur, director of the career development office at the Sloan School of Management at the Massachusetts Institute of Technology. She said she knows of at least 25 graduates facing deferrals.
Among the companies deferring offers are PriceWaterhouseCoopers' consulting division, which has told all 650 members of its hiring class the company will be back in touch next April about a new starting date. Mercer Management Consulting announced this month it would defer the start dates for all new non-partner staff.
Consulting has been particularly hard hit, though a number of investment banks and high-tech companies also have been affected. Credit Suisse First Boston has solicited voluntary deferrals, while Cisco has deferred some offers, though it says less than 10 percent.
A few consulting firms, including McKinsey, and Boston-based firms Bain and Boston Consulting Group have avoided deferrals. But almost every company has slowed hiring.
Forgacs said that among those at a recent gathering of six Columbia classmates who all expected to be consultants by now, only one was employed, and she as a free-lancer.
"All of the people who took jobs with consulting firms except McKinsey, Bain and BCG are all in my shoes," she said.
Christina Barber, a spokeswoman for Sapient, where Forgacs had hoped to work, said the company would have no comment.
At Northwestern's Kellogg School of Management, the dean recently sent out a plea to alumni, seeking short-term jobs for recent grads whose offers were postponed or canceled.
Some companies are spinning the deferrals in a positive light.
"We basically offered the incoming class this year the opportunity to apply for a one-year deferral of their start date to go pursue an extracurricular interest, whether it be travel, language or study," said CSFB spokeswoman Christina von Bargen of the investment bank's voluntary program.
That's fine for those who can afford it, but many cannot, with loans coming due.
Forgacs said Columbia has told students it will be flexible about collecting loan repayments until the market improves.
Sympathy for aspiring consultants may be limited in some quarters.
True distress seems unlikely: assuming they do eventually land a job at $100,000 per year, they would need to work just one month to earn an annual salary that surpasses the federal poverty level, and only about three months to earn the U.S. per capita income.
But Forgacs says unemployment, even if temporary, has produced real angst about whether the $80,000 she spent on an MBA was worth it.
"In the long run, I'm optimistic," she said. "But a lot of what we learn is stuff they try to make timely. What I'm afraid of is if I'm out of the work force for a year, is my MBA going to be as valuable?"
