Thinking of a summer internship at prestigious consulting firm Mercer Management Consulting? Think again. Mercer, so far alone among top consultancies, has decided not to hire any interns for the summer of 2001.
As Mercer Management Consulting continues to defend its decision to abandon recruiting for summer consulting interns, no other consulting firms have stepped forward to say they’re considering doing the same, even though several admitted that the impending recession has forced them to confront new realities. Meanwhile, several students and business school administrators say Mercer’s surprise move had affected their view of the firm’s reputation.
“All the firms are looking at similar activities,” said Howard Bailen, a Mercer spokesman. “Some are making moves, some are not.”
Mercer officials say an unexpectedly large number of people accepted Mercer job offers last year, a result of declining fortunes in the dot-com industry. That, combined with lower-than expected attrition rates, has left the firm replete with consultants. And with corporate America white-knuckling its safety bar as it plunges into a recessionary dip, too many consultants and not enough work could mean layoffs.
If, however, Mercer’s decision not to recruit this summer proves overly conservative, the firm could be left understaffed. Even worse, Mercer’s long-term prospects for talent could be hurt, as spurned students pass word about the firm’s no-show from one class to another.
“I certainly will say that we stress to any company that recruits here that maintaining a longer term relationship is important,” said Gary Fraser, the assistant dean in charge of the career development office at New York University’s Stern School of Business. “Students are just here for two years, but we have a strong alumni network and one year passes down information to another year. So the relationship, I think, is important to maintain.”
But even as Mercer deals with its dilemma, first made public in a New York Times article earlier this month, other consulting firms say they haven’t altering their recruiting plans, even if they are feeling similar pressures to do so.
“We have not changed campus recruiting activities or plans in response to shifts in the economy,” said Andrew Giangola, a spokesman for McKinsey & Co.. “Some offices have scaled back their recruiting targets, but on a worldwide basis, when you consider all McKinsey offices and the firm as a whole, we continue to grow the number of hires at roughly historic rates. In fact, in many geographies and many practices, we are hoping to exceed historical rates this year,”
Giangola declined to say which offices have scaled back recruiting targets. But he added that in slow periods, when fewer consultants are actually working on client projects, the firm concentrates on training for consultants or pro bono work. As such, McKinsey hasn’t had a layoff in decades.
And while neither pro bono work nor “knowledge development” pays the bills, the firm’s sterling reputation means business never dries up, even during the most dire days. In fat times, McKinsey focuses on pushing out quarterly profits by increasing efficiency; in lean times, focus shifts to new product introduction, increasing marginal growth – or corporate restructuring.
“Our work has historically been recession proof because the business leaders we work with don’t run out of problems and challenges,” Giangola said.
A spokeswoman for a competing consulting firm, Bain and Co.,
admitted that her firm faced the same overstaffing problem as Mercer, but added that no recruiting changes would result.
“As far as we know at this point, we have not decided to decrease our hiring at all,” said Cris Pontes, the Bain & Co. spokeswoman. “We have seen a great increase in our yield and ended up with more people than we expected. But we plan on doing our normal summer recruiting and our normal fall recruiting.”
At Columbia University’s Graduate School of Business, one place where Mercer’s absence was keenly noted, students wondered why Mercer, alone among the large strategy consulting firms, decided not to show up. Just this year, students noted, both Monitor and CS Associates increasing their recruiting presence.
“It is disappointing that any company we have a relationship with would make that decision, but there are other opportunities,” said Michael Preis, a second-year business student and the school’s student body vice president.
Others wondered why Mercer had been so forthcoming in its decision not to recruit summer interns.
“Consulting companies, they come to Columbia just to maintain a relationship,” said Prithvi Prabhu, a first year Columbia business student who is himself looking for a summer internship with a consulting firm. “So in that sense, I don’t see what harm it would have been for them just to come to campus.”
But NYU’s Fraser said recruiting visits that don’t lead to job offers can hurt a firm’s standing with a school just as much as if it didn’t come at all.
“I don’t know necessarily if that’s the best policy because students are savvy enough to know what hiring needs a company has, and if they are making offers and if they’re following up on them,” Fraser said. “I think with students, we have a good relationship with them, and we’re talking to them all the time. They know who’s doing what and who’s going into what company, so I think the network would get us that information.”