Knowledge is power, as the saying goes. And in the age of information, any businesses, nonprofits, government agencies, or other organizations that do not have as much knowledge as possible of their individual lines of work are at a distinct disadvantage. They risk suffering financial losses, poorly performing workers and departments, and failing to meet their goals. Consultants are professionals who provide expertise to organizations to help them maximize their profitability or effectiveness and keep them running smoothly. Basically they are “problem-solvers for hire.”
The roots of modern consulting began in the late 19th and early 20th centuries, when the first consulting businesses established in the United States studied manufacturing in an attempt to improve workplace productivity. Many companies began hiring consulting firms to help improve worker and production efficiency. Since then, the need for services has grown with the population and the expansion of business on an international scale, while the types of services provided have evolved with the economy.
There are four major types of consulting:
- Management/strategy consulting firms help to improve an organization’s structure, management, efficiency, and profits, and plan strategies for short- and long-term development. According to the Institute of Management Consultants USA, common management consulting specialties include administration, financial planning and control, human resources management and labor relations, incentive compensation, information technology, manufacturing, organizational planning and development, physical distribution, research and development, sales and marketing, strategic and business planning, and wage and salary administration.
- Financial consulting firms provide advice on financial issues such as capital budgeting, project valuation, financial information integrity, profit-and-loss reporting, risk management and insurance engagements, global finance operations, ongoing financial control and compliance with laws, tax and treasury optimization, and corporate restructuring.
- Information technology (IT) consulting firms help clients design and implement IT systems or develop better IT practices; train staff members in IT areas such as hardware/software design setup, network setup and administration, computer security, and search engine marketing; provide strategic advice on social media and IT issues; and offer advice on cutting-edge technology such as blockchain technology, artificial intelligence, and advanced robotics.
- Human resources/staffing consulting firms help clients make the most of their investments in people (salaried, temporary, and contract workers). These firms manage compensation and benefits programs; advise firms on personnel policies; analyze staffing needs; recruit, hire, and train workers; provide advice on diversity issues; and develop leadership training programs.
Although there are many overlapping areas in the consulting industry, some firms specialize in one area while others have departments for a variety of fields. Additionally, some consulting firms offer expertise in a single industry, such as defense, insurance, retail, health care, education, environment, telecommunications, engineering, or publishing. Consultants who work for the government often specialize by type of agency (environmental, defense, criminal justice, etc.).
Consulting providers can be large firms (such as McKinsey & Company, Accenture, Mercer, and the Boston Consulting Group) that maintain offices throughout the world, small- to medium-sized businesses with local or regional presences, or firms operated by only a few people or even a single consultant.
Many people aspire to become consultants. This career often makes “best job” lists by industry publications. In 2017, CNNMoney ranked the career of management consultant as the 17th-best job in terms of “big growth, great pay, and satisfying work.” Consulting jobs are also very lucrative. In 2018, management analysts and consultants earned an average of $85,260, according to the U.S. Department of Labor, much higher than the national mean salary ($53,490) for all careers. Consultants at global consulting firms can earn $200,000 to $500,000 annually.
Consultants, analysts, and consulting managers are the key professionals in the consulting industry. Thirty percent of people in the management, scientific, and technical consulting sector work in business and financial-operations occupations (a U.S. Department of Labor category that includes consultants). Office and administrative support positions make up the next-largest employment group (22 percent of workers), followed by those in management occupations (11 percent), a category that includes consulting managers and top executives. There are also career paths in business development, administrative services and executive support, information technology support (non-consulting), sales and marketing, communications/public relations, human resources (non-consulting), continuing education, and other areas.
A bachelor’s degree is the minimum requirement for most consulting careers, but many consultants have a master’s degree in business administration. Others have advanced degrees in their specialty, such as engineering, human resources, or accounting. Attending an Ivy League school or a college with a top-rated MBA program increases your chances of landing a consulting job. A good education is only the first step for aspiring consultants. They need extensive field experience (at least six years at major consulting firms) before being assigned top-level work. Some consulting positions also require a graduate-level or professional degree.
Today, consulting is a massive, international industry with global revenues of $470 billion in 2016 (the latest year for which data is available), according to Plunkett Research, Ltd., up from $415 billion in 2013. This figure includes human resources, business advisory services, information technology, and operations management consulting, but not tax- and other accounting-related consulting. There were about 810,900 management consulting firms in the United States, according to IBISWorld, with combined annual revenue of approximately $248 billion. Consultants are key players in the business world, and their star will only rise in the future.
- Intellectually stimulating work. Consulting careers are well suited for intelligent people who like challenges and are eager to tackle their clients' biggest issues.
- Collegial work environment. Although the industry is very competitive, most consultants enjoy working with their colleagues—smart, motivated people who like to solve problems. Many colleagues become lifelong friends.
- Career diversity. There are many career paths for consultants—from management, to information technology, to human resources consulting to specializing in a particular industry such as health care, energy, engineering, or education. Most firms provide services to multiple industries. For example, Kearney offers management consulting services to 14 industries: Aerospace & Defense; Automotive; Chemicals; Communications, Media & Technology; Consumer & Retail; Energy; Financial Institutions; Health; Industrial Goods & Services; Infrastructure; Metals & Mining; Private Equity; Public Sector; and Transportation & Travel.
- Geographic freedom. Although many consultants call big cities such as New York, Chicago, and Boston home base, there are opportunities in cities throughout the United States and the world.
- Opportunity to travel. Consultants rack up the “frequent flier” miles. You will have a chance to travel throughout the United States and possibly the world.
- You can be your own boss. After gaining experience, many consultants start their own firms. In fact, the DOL reports that about 18 percent of management consultants are self employed. One example of a consultant turned entrepreneur is Jim Koch, the founder-brewmaster of the award-winning Boston Beer Company. He worked as a strategy consultant for The Boston Consulting Group before making the plunge into entrepreneurship.
- Good pay and bonuses. The average salary for management analysts and consultants was $95,560 as of May 2018, much higher than the national average ($53,490) for all careers. Top consultants can earn $200,000 or more annually. Big firms provide large bonuses ($20,000+) to top performers.
- Great perks. Large firms offer free cafeterias, paid maternity and paternity leave, and complete medical and dental benefits, among other benefits.
- Pride. It’s rewarding to provide advice that helps a client increase sales or improve its bottom line.
- Good jumping-off point. A career in consulting provides a great way to learn about lots of industries and functions. It’s excellent preparation for a career in management, as an entrepreneur, or even as a politician (think of 2012 presidential candidate, and current U.S. senator, Mitt Romney).
- Long hours. “If you’re looking for a 9 to 5 job, then this is not the right industry for you,” advises Booz Allen Hamilton at its Web site. New graduates should expect to work 60+ hours a week (including at night and on weekends). These time demands make it hard to have a personal life.
- Frequent travel. You will travel to where your clients are located—whether it’s across town, in another city, or in another country. Expect to live out of a suitcase for days, weeks, and even months at a time.
- Rejection. It can be frustrating when you provide great advice to clients, but they don’t take it.
- Long path to partnership. At large firms, it will take at least six years of hard work (often 60+ hours a week), plus an advanced degree (often an MBA), before making it to partner, and only a third of entry-level consultants eventually reach this lofty status.
- High pressure and stress. Long work hours, demanding bosses and clients, and constant deadlines and inquiries from clients can add up to high workplace stress.
- Continuing education. Constantly changing projects require that consultants stay up to date on industry trends, information technology, and other resources. To some, this continuing education can be a pain; to others, it can be exciting and rewarding.
- Conservative culture. The work environments of consulting firms typically mirror those of their corporate clients. Expect a lot of structure and formality, and be prepared to dress very conservatively on the job.
- Lack of diversity. The number of women in the consulting industry is increasing, but the number of minority consultants (of either gender) is still small.
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- Business Intelligence Analysts
- Corporate Climate Strategists
- Customer Success Managers
- Energy Consultants
- Environmental Consultants
- Financial Analysts
- Financial Consultants
- Financial Quantitative Analysts
- Fraud Examiners, Investigators, and Analysts
- Health Care Consultants
- Human Resources Consultants
- Information Security Analysts
- Information Technology Consultants
- Information Technology Security Consultants
- Internet Consultants
- Internet Marketing and Advertising Consultants
- Management Analysts and Consultants
- Market Research Analysts
- Marketing Consultants
- Press Secretaries and Political Consultants
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- Strategy Managers