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by Vault Consulting Editors | February 23, 2010


For various reasons, consulting has a high turnover rate: stress, travel, the sometimes brash personalties of players involved and, of course, economic factors (although turnover is largely involuntary). But the past of couple years, due to the state of the economy, have seen many consultants staying put, where shelter was nice and health care premiums were paid. Almost every intern took the offer—a huge departure from my internship at a Big 4 accounting firm, where only a few of the entire class accepted, and many people (including myself) receiving four or more offers.

It's not so bad to weather an economic fallout within the sturdy walls of a Westin with room service. This suppressed turnover will eventually give as the economy slowly recovers, and I'm already hearing reports from peers that this is the case. Whereas last year the only people who left did so involuntarily, this year I've heard that the opposite is the case. A little momentum in the economy has opened up enough opportunities that if consultants aren't happy, they are released from their survival instinct to stay. The blogosphere is buzzing with the same sentiment.

But those consultants who were cut, largely due to low utilization rates, have left a large gap in their company between university-level consultants and experts. This is a point that seems to have been overlooked by many companies. Instead of investing in their own employees to build experts during the recession, many let go of promising young talent with low utilization rates, including some of my talented and intelligent colleagues. A fresh consultant's utilization is almost entirely a factor of his typically arbitrarily assigned industry group and its ability to sell work. During the downturn, many firms missed the opportunity to train these individuals in the future work that will be sold.

To fill their place, there is and will be a mad rush to fill the knowledge gap, which will likely make experienced hires a higher percentage of subcontractors, lowering project profitability. Peter Drucker in Managing in the Next Society, says, "In a few years the people who are not employees of the organization for which they work ... will greatly exceed the number who are"—for better or for worse. However, to become that knowledgeable subcontractor, you will have to become an expert. But how?

Perhaps this pressure will shift the labor market for consultants a bit more favorably towards the employee. Bring back the foosball tables?

--Taylor O'Neal is a supply chain consultant for a major consulting firm. He graduated from Miami University School of Business in 2005 and Indiana University's Kelley Masters of Information Systems program in 2006.


Filed Under: Consulting

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