The "Great Resignation" is a term used by Professor Anthony Klotz, of Texas A&M University. It describes the mass resignation of employees, initiated during the pandemic crisis in the USA, in search of a better quality of life. According to McKinsey, in a study published in September 2021, no less than 40% of employees have considered quitting their jobs within 3 to 6 months. Strategy consultants, with their flexible working hours and whose social life, which provided them with a welcome break, has been partly interrupted by the pandemic, have been particularly affected. To counter this phenomenon, strategy consulting firms have tried to adapt by, among other things, increasing salaries. And yet, more than ever, the expectations of generations Y and Z cannot stop at the financial aspect alone. These generations are demanding better working conditions and a greater sense of purpose.
Find out in this article how firms have tried to adapt to the big resignation by putting the expectations of generations Y and Z at the heart of their development strategy.
A historically demanding work model that generates turnover with deleterious effects
The release of covid-19 caused a significant work overload
The pandemic crisis, a source of uncertainty, has frozen much of the activity of strategy consulting firms. In 2020, according to a study by Syntec Conseil, strategy consulting activity fell by 7.2% to 10% for the smallest firms. Companies have considerably reduced their spending, while repeated lock-ins have disrupted the organization of assignments. Against this backdrop, strategy consulting firms sharply cut back on recruitment, with some halving or even freezing recruitment altogether. Subsequently, the strong recovery of 2021 (+11%, Syntec Conseil) put teams under considerable strain, and encouraged a resumption of recruitment. An article in Consultor that same year reported on some 70-hour weeks for overworked consultants. The staffing rate even reached 100% for some firms, compared with 70% in normal times. The good news of the recovery should not be allowed to overshadow the ongoing problems of strategy consulting firms, exacerbated by the covid-19 crisis. The situation, with under-staffed firms, social events on hold and the search for a more balanced working environment, has demonstrated the deleterious effects of a turnover that could become excessive. In the short term, it upsets the balance of assignment staffing. In the medium to long term, it also has very tangible structural effects, with a negative impact on the feminization of the hierarchy from the middle of the pyramid upwards.
See also: What is strategy consulting?
Changes in work organization with Covid-19
Consultants attach great importance to the human aspect of their profession, which translates into relationships between teams and with customers. The new work organization that emerged in the wake of covid-19 has undermined the value proposition of becoming a consultant: the human aspect. Gone are the days of travel on assignments, seminars and firm social events, replaced by videoconferencing and remote working. A little exaggerated, admittedly, but many consultants have seen the impact of the crisis on their organization and working conditions in this way. Telecommuting enables firms to be more flexible in their organization, but on the other hand it reduces human contact. Working hours are as important as ever, if not more so, with telecommuting and the resumption of business. This has an impact on the social life of the firm, which used to be a considerable asset because it enabled consultants to forge links with one another. Some are no longer happy with it.
Lack of meaning: a different relationship to work for generations Y and Z
The lack of meaning in strategy consulting firms particularly affects generations Y and Z, who have different expectations from other generations, including :
- Alignment of values: Generations Y and Z are more sensitive to the notion of meaning and social impact of their work. They want to work for a firm that shares their values and has a positive impact on society. Particularly when it comes to social and environmental issues.
- Direct impact: Generations Y and Z want to have a direct impact on their work and be recognized for their skills and contributions. They value the human connection just as much, but don't want to conform to others, and avoid all that is "bullshit".
- Work-life balance: Generations Y and Z attach great importance to well-being, and are no longer willing to sacrifice their private lives for their professional lives.
Strategy consultants sometimes feel like doers rather than creators, and may feel that their work has no real impact. There is a real questioning of the meaning of work and missions after covid-19. This feeling of a lack of meaning can lead to a high turnover rate among Generation Y and Z consultants, averaging 25% each year, and even more for these generations after covid-19.
To meet this challenge, strategy consulting firms need to rethink their approach to work. They need to place greater emphasis on meaning and impact, in addition to salary compensation.
Read also: Everything you need to know about strategy consultants: assignments, careers, salaries
Beyond raising salaries, a major need to transform firms from within
Raising strategy consultants' salaries in the face of overload
To compensate for work overload, firms have turned to the traditional lever of remuneration. Indeed, this is the simplest and quickest lever to implement. Following in the footsteps of investment banks, traditional competitors in the recruitment of juniors, MBBs have increased their base salaries by 10-15% in the USA, setting off a general trend towards France and other firms. Today, a junior consultant can expect an average package of €60,000/year at the best firms in Paris. For some firms, notably the MBBs, the package can rise to 70K€/year. In an article in Consultor, Olivier Vitoux, partner at CVA in Paris, testifies that the entry-level package was raised to around €65K at the beginning of January 2022 to match that of the MBBs. After a few years, salaries are also on the rise, with an increase of 10-15% each year, and a consequent revaluation at each promotion. In the same Consultor article, the Partner of an MBB even mentions a 25% pay rise in 2022 at manager grade. This is the most at-risk grade, with the highest turnover, since after an average of 3 to 4 years, consultants start to leave the firm. The packages advertised include both the fixed and variable parts of the salary, and it is not uncommon to see firms revise bonuses upwards to inflate these packages. Last but not least, firms try to offer other financial benefits in addition to salary.
See also: The salary of a strategy consultant: package, reasons and grid by firm
Improving organization and working conditions to ensure a balance among consultants
Strategy consulting firms are also seeking to offer a daily living environment that is more respectful of life-life balance, both by restructuring work organization and by changing working conditions.
In terms of work organization, the covid-19 crisis has had a major impact on the profession of strategy consultant. Henceforth, consultant travel has been reduced, and telecommuting has become the norm. For some, as mentioned above, the changes in work organization have removed the bond between teams, somewhat erasing the human aspect of the consulting profession. But the truth is, firms have also managed to adapt by offering greater flexibility. It's still possible to come into the office, and there's still time to travel to the customer's premises. Conversely, telecommuting allows consultants to spend more time at home and with their loved ones, improving their working conditions in the process.
Working conditions can be defined in terms of the variables that influence the work-life balance. There are several factors to consider when talking about working conditions. First of all, there are long working hours and mission-related overload. Strategy consulting firms are making efforts in this area. For example, Bain has set up a night-off system, which guarantees each consultant one day a week when he or she will not leave the office after 7pm. EY-Parthenon, for its part, has a weekly time tracking system where every week, consultants fill in a time file with a color code associated with the imposed rhythm. The colors range from green to red, and if there are too many reds, an alert is sent up to the Partners level to adapt the rest of the assignment. In most firms, after each intense assignment with long, repetitive working hours, there is also the possibility of being "on the beach". In this case, for a short period of time, the consultant is not working on an assignment for a customer, but directly for the firm. This may involve working on sales proposals or research, for example. Other very important elements are also put in place by the firms throughout the consultants' lives, particularly when they become parents. For example, Bain, Roland Berger and McKinsey have decided to extend the statutory period of paternity leave from 28 days to 56 days. PMP Strategy, for its part, has introduced a 4-day week with no loss of salary for young parents. What's more, some firms offer employees the chance to take a few months' break to carry out a personal project. If your project is accepted, you are guaranteed your job back at the end of it, with the same responsibilities and salary conditions.
Add meaning to missions and to the firm's development to make an impact
For some years now, generations Y and Z have been looking for meaning in their work, and for strategy consulting firms whose values are aligned with their own. Covid-19 has been a catalyst for these issues, boosting the quest for meaning in firms that have to meet both the expectations of their clients and those of a new generation of young consultants who want to emancipate themselves in their work. Several areas are concerned, the main ones being environmental impact and social impact.
As far as environmental impact is concerned, strategy consulting firms are beginning to develop increasingly advanced in-house initiatives, usually led by younger consultants. At McKinsey, for example, each office has a Green Team to develop environmental issues within the firm. At Bain, sustainable development issues have become increasingly important in recent years, in particular as a result of growing demand from private equity investors. BCG has taken the lead on environmental issues, as BCG's new CEO, Christoph Schweizer, called on "climate activists" to join the consulting world in an interview with the Financial Times. Nowadays, all consulting firms are able to intervene on environmental issues, whether it's for an assignment with an environmental focus or, on the contrary, by integrating environmental issues into all assignments, whatever the issue. At a time when we need to drastically reduce global warming in order to mitigate climate change, strategy consulting firms have more than a central role to play.
Meaning for consultants also means social impact. It's clear that more and more strategy consultants are asking the question of social impact. Firms have taken the subject to heart, and have stepped up the pace since covid-19 came out. The social impact of strategy consulting is largely achieved through pro-bono missions, skills sponsorship and volunteer work. The firms' pro-bono missions enable organizations without the means to benefit from the skills and expertise of strategy consultants on a specific subject. For the consultants, it's a way of giving meaning back to their profession and making a real contribution to society. For example, Oliver Wyman carried out a pro-bono mission in 2020 by conducting a study on the realities of homophobia in the world of rugby, in collaboration with Têtu magazine. The firm also supports this LGBT magazine on other subjects as part of pro-bono missions carried out by the GLOW working group. For over 25 years, BCG has been carrying out pro-bono missions for the Hermione-Lafayette association, which built a replica of the Hermione, the frigate that took Lafayette to America in 1780. Sponsorship of skills has also increased in recent years, enabling consultants to be made available on an ad hoc basis to work on projects for non-profit organizations. Other consultants are involved in volunteer work, which takes a more traditional form of social impact action, such as mentoring pupils in difficulty or students in precarious situations who are seeking to define their professional project. This is notably the case for projects run by Arthur D. Little consultants. Little consultants.
Last but not least, the firms' impact is also felt through in-house associations, with networks of consultants created to promote the inclusion of all and fight discrimination. McKinsey and Bain have networks of associations for women: Next Generation Women Leaders at McKinsey and Women at Bain. McKinsey also has a Black Leaders on the move network. At Oliver Wyman, as mentioned earlier, there is a commitment to the LGBT community with the GLOW working group for Gay, Lesbian, Bisexual, Trans and Allies at Oliver Wyman. Things are moving forward on these issues, and inclusion has been improving for some years now, as evidenced by this article from Consultor in 2022.
Read also : Top 5 reasons to join a strategy consulting firm
The big resignation has been a driving force behind changes and transformations in firms.
During the great resignation and after Covid-19, many consultants left and the ranks of strategy consulting, even from the best firms. And others followed and will continue to leave after just a few years. The most important thing behind this is that the big resignation and Covid-19 have had a significant impact on transforming firms in the way they work and offer meaning to generations Y and Z. From now on, the challenge for firms will be to stay the course and do even more, so that in future, talent will no longer leave firms because of work overload, a life balance too difficult to follow or a lack of meaning.
Want to join a strategy consulting firm?
Then join us and be part of the 90% of our candidates who integrate a TOP 6 every year. PrepaStrat is the first interview preparation program for strategy consulting firms, with :
- 7 years of expertise, we're the oldest player in strategy consulting interview preparation
- 6 bootcamps per year, comprising 35 hours of training over 5 days
- 1 referent coach from an MBB for each supported candidate
- 100% of our coaches are Senior Consultants and Managers from McKinsey, BCG and Bain
- 10 hours of online training to prepare you for interviews and understand what strategy consulting is all about
- 50+ corrected case studies that have already fallen into the hands of top strategy consulting firms
- Aim for excellence and join the top strategy consulting firms with Prépa Strat
Discover our bootcampour real-life interviews and our e-learning platform !