Talent trends in the UK strategy consulting sector
The InX Research Department regularly studies the talent trends in each of the markets we operate in, so that we are best placed to advise our Consulting, Corporate and Private Equity clients on their hiring plans. The data enables us to identify the best source of candidates, understand the motivations of candidates at different stages of their career, and advise our consulting clients on the type of talent they could and should attract as they build new practices.
A recent study we completed into talent attrition at the strategy consulting firms has helped us to better understand the movement of talent out of the consultancies. The strategy departments in many of the large corporates, and the PE industry often source talent from the strategy consultancies at various levels, respecting their analytical rigour, problem-solving expertise and strategic mindset.
The research has unearthed several key insights which will enable us to advise our clients as they plan for hiring in 2025:
Strategy consultants who joined their employer from graduation, remain in that firm for an average of 4.9 years, typically leaving at Manager / Project Leader level.
Only 10% remained with the firm until at least Associate Partner level before leaving. 42% exited the firm at Manager level, 46% left before reaching Manager level.
13% of people leaving their first strategy consulting employer move to another consultancy immediately, 54% take a role in industry, and 30% switch to the Private Equity sector.
Only 12% of people joining a strategy consulting firm from graduation of their MBA business school, remain on in consulting to become equity Partners in their firm.
Of the current Partners in consulting firms, 40% have been with their firm since entry level.
The long-term (20 year) destination for strategy consultants is varied, with 29% remaining in consulting, 10% moving in Private Equity/Venture Capital and the remaining 61% are in Industry operational roles.
From an academic perspective, 42% of Partners hold a Bachelor’s degree as their highest education level, 53% have a Master’s degree - nearly half of whom have earned an MBA - and 5% possess a PhD; showcasing a strong emphasis on higher education within this sector.
Our study was based on the United Kingdom market and included consultants from the larger strategy consulting firms: McKinsey, BCG, Bain, Oliver Wyman, EY-Parthenon, and Strategy&.
Private Equity Value Creation Consulting – Partner Hiring Trends
We also carried out a narrower study within these firms and the restructuring and turnaround consultancies AlixPartners, Alvarez & Marsal, and FTI Consulting, specific to the Private Equity Value Creation consulting practices, which are some of the fastest growing practices within the strategy consultancies. This study was to understand the flow of talent at Partner level over the past three years.
Our research revealed that the main hiring source for Partner-level candidates is other consultancies. From the Partner-level profiles we reviewed, 55% of Partner-level candidates who have been lateral hires were sourced from other consultancies, while 45% were hired directly from Industry including Corporate and Private Equity firms.
Alvarez & Marsal have been the most prolific lateral hirers at this level and have sourced the majority of their Managing Directors and Senior Directors from Industry rather than other Consultancies. The pattern with other firms is that few people are hired from industry, whilst the majority from Consulting. Deloitte, as the second most prolific hirer, has brought 14 Partners from their competitors and hired 3 from industry.
When combined with statistics below, showing that the average Partner has spent 13.7 years in Consulting combined with 7.6 years in industry, it’s clear that consultancies such as FTI Consulting and Alvarez & Marsal have started to consider lateral hires direct from Industry as an option. This is in contrast to other consulting practice areas where the majority of hires are made from direct consulting competitors.
Partners within these practices have an average of 15 years consulting experience plus 6 years industry experience. This additional industry experience is clearly of value to the consultancies clients, typically Private Equity firms, who need experienced operational leaders to advise on value creation, transformation and post transaction planning for their portfolio companies.
The mix of industry versus consulting experience varies between hiring firms. Notably the restructuring consultancies such as FTI and Alvarez & Marsal tend to hire Partners with more Industry experience, likely due to the nature of their projects and utilisation; whereas the Big 4 and Strategy consultancies have Partners with more years’ tenure within consulting, some having spent their entire careers as consultants.
Interestingly, the average Partner-level candidate within these consulting practices has spent 27% of their career in Industry, and 73% in consulting. They have 24 years’ experience, 5.7 years of which has been spent as a Partner within Consulting, and was hired at Partner-level directly from a competitor.
Bespoke Research
During 2024, the InX Strategy & Consulting Research team has delivered bespoke research for several clients including in-depth market mapping, identification of boutique consultancy M&A targets, competitor career level and remuneration mapping, and sector-specific studies for clients considering new market entry.
Feel free to contact us to discuss your growth plans, so we can tailor a research solution to supplement and direct the executive search element of your talent acquisition plan.