EDITION #5 • TUESDAY, 02 JANUARY 2024

Why students have accepted offers

from PwC, EY, Accenture Strategy, but
don't want to join them
Be prepared for pay cuts, longer promotion paths, and
unguaranteed returns, say people who have been there
and done that
by Akshaya Chandrasekaran

10 MIN READ

Happy New Year! And welcome to edition #5 of Day Zero.

Any measure that becomes a target ceases to be a good measure.

Good ol’ Goodhart’s Law is quite apparent in what’s happening with B-school
placements this season. Many years of dutifully over-indexing placement
numbers and optimising for them at all costs is why we are here, a founding
director of one of the newer Indian Institutes of Management (IIM) confided
to me recently.

For instance, a ballpark statistic that’s come up often in my conversations with

professors, students, and alumni alike is this: more than half of the graduating
batch—even from the best B-schools—leave the jobs they’re placed in within
the first year.

“So, what’s the point of publishing a placement report each year with such
high attrition rates?” the IIM director asked. Instead, what we should be
tracking is talent mobility after placements, they argued, because it could
provide more useful lessons for the future.

Well, this year’s statistics in this area could be particularly… enlightening.

Attrition will likely get worse; what with an increasing number of students
wanting to leave even before joining their new jobs. Here are a few things
students have said in Day Zero’s running survey:

“I took whatever job I got from college as a safety net. I will now focus on
off-campus placements.”—An ISB student

“My strategy this year is to seek out jobs on my own.”—An IIM Lucknow
student

“Complete mayhem. I am tapping into personal networks to find something

on my own.”—An IIM Ranchi student

The jobs students are choosing, and those they are shying away from, are also
changing. As are the payoffs they used to give.
We’ll get into the many creative ways students are trying to find jobs
off-campus in future editions, but this week, we’re going to look at a highly
sought-after segment where recruiters, pay-offs, and student preferences have
all changed drastically this year.

If our headline hadn’t already given it away, it’s consulting.

[Day Zero is a premium newsletter, but given the extremely challenging

placement season this year, we’ve made it free-to-read for anyone signing up
with an official college email ID. So do forward it to any students, faculty, or
alumni in your circle who may find it useful.]

Shying away

Jobs at the Big Three of consulting—Bain & Company, McKinsey & Company,
and Boston Consulting Group (BCG)—are usually hankered after by a large
number of graduating B-schoolers.

But call it an unlucky draw, all three firms have sharply moderated their
recruitment this year. None of them have visited any institutes other than the
flagship IIMs, according to students and faculty I spoke to. Even at IIM
Ahmedabad (IIM-A), where final placements are yet to begin, students tell me
they expect the shortlists to be shorter than ever for the Big Three. If you don’t
already have a pre-placement offer, or at least a pre-placement interview,
landing a job in one of them is likely “next to impossible,” said one IIM-A
student.

So if not the Big Three, then who?

You’d think the situation would be ripe for tier-2 consulting firms (there are a
lot of these) to swoop in and pick up top talent without much competition. But
things aren’t really playing out that way this year.
At the Indian School of Business (ISB), for instance, many students seem to be
shying away from taking up such offers. If not a Big Three consultant, students
said, then they’d rather work at a product-first startup. Or even opt for a job
off campus.

Considering the ramifications of not taking up an offer on campus—which

ranges from revoked alumni status to financial penalties—it’s worth
wondering why.

At ISB, where the average work experience of students is around three to five
years, tier-2 consulting firms don’t look like very attractive options. “I already
worked at a tier-2 consulting firm, it doesn’t make sense to join Ernst & Young
or PricewaterhouseCoopers after having done an MBA,” said one final-year
student who is going to have to make this decision very soon.

Others I spoke to echo this sentiment—the reason they wanted to do an MBA

in the first place was to get access to the top consulting firms.

“The only reason I came to ISB is because I wanted to get into MBBs
(Mckinsey, Bain, and BCG).”

There are usually four to five hierarchies at consulting firms: Analyst—>

Consultant—> Manager—> Senior Manager—> Partner.

For those who have already worked as analysts or consultants, MBAs at

premium B-schools are seen as a way to land an upgraded role at a tier-1
consulting firm. That simply hasn’t happened this year.
“I have six months in my hand. I am applying to as many startups as possible
for product and strategy roles. I am hoping to convert one of these. It simply
doesn’t make sense for me to join a tier-2 consulting firm, and several years
down the line make my way into a tier-1 firm. Only to leave that in a year and
look for something else. It’s a very long, drawn-out process to get somewhere.
I’m not even sure if I want to do consulting that badly.”

An ISB student

In fact, one final-year ISB student I spoke to is juggling three offers from tier-2
consulting firms. And to my surprise, they said they may not pick any of them.
Besides it being a downgrade from their expectations, many students seem to
find product roles at startups and e-commerce companies more exciting.

The kind of roles on offer at tier-2 consulting firms are also a factor. For
instance, consulting firm Accenture Strategy, an ISB student said, “did not
hire for the Indian Market Unit.” This likely meant recruits would be working
with global clients, which students fear just means back-office work. The
student shared similar concerns about consulting firm Arthur D. Little—“they
are very new in the market, and it’ll be very difficult to gain a good market
share or get projects. Their India pipeline is dry right now.”

An IIM-Lucknow alumnus who shifted from Accenture Strategy to Bain also

told me that at tier-2 firms, you are often stuck with projects in the same
sector. “I worked in financial services for ten months at Accenture Strategy.
But at Bain, I experienced five different sectors in 12 months. From
healthcare, real estate, consumer retail, to pharmaceutical industry.”

A leap too far?

What’s happening at the IIMs is a bit different. Unlike ISB, students at IIMs
are predominantly freshers, without much former work experience. So, many
of them aren’t as concerned about joining a tier-2 consulting firm.

“I am hoping to get into one of the tier-2 consulting firms and a year or two
down the line, I’ll apply to MBB,” an IIM Calcutta student told me.

This has, in fact, been the common perception about tier-2 consulting firms
for a while now—that they are a ticket into the Big Three. And in previous
years, things did somewhat work that way. There is a pipeline between tier-2
and tier-1 consulting firms that is pretty much active throughout the year,
acknowledged an IIM-A alumnus who had joined Bain as a fresher.

But, they were quick to caveat, “it depends on market conditions”. And market
conditions this year are going to make any such jump very tough to pull off.

To quote one senior executive at McKinsey who wished to remain anonymous:

“If they haven’t hired from B-schools, then they are definitely not going to hire
laterally. It seems impossible in the next two to three years. And even if they
resume hiring, they would likely go back to hiring fresh graduates from IIMs
instead of ramping up lateral hiring.”

So unless the role in question is very specialised, with a need to find someone
with very specific skill sets, tapping into the tier-2 consulting pipeline is
unlikely to be as common as earlier.

And even in such special circumstances, candidates making the jump may
have to take a level cut and a pay cut. “Though it is a pretty common pipeline,
MBBs have created a halo around them which they don’t substantiate with
compensation while hiring—they make you repeat one year in your career
progression,” pointed out a graduate from Faculty of Management Studies
(FMS) who had made a similar jump from Accenture Strategy to Bain.

And that’s not even the end of the challenges. You may not get the same
opportunities as colleagues who are “home-grown”, they said, because you
know fewer partners and it may take a while to get to the best projects.
Pressure on lateral hires is also higher than on on-campus recruits, according
to an IIM Lucknow alumnus who was a lateral hire at McKinsey.
“It takes longer to get to manager, and then, partner, and you have to work
your way up.”

If management consulting is considered a stepping stone, then there aren’t

many exit opportunities coming out of a tier-2 firm, according to an IIM
Lucknow student who tapped out of Accenture Strategy within ten months of
joining.

If anything, the IIM-A alumnus admitted, taking up a tier-2 consulting job

hoping to crack the Big Three is a risk. Only to be attempted if one is
committed to staying in the field of management consulting.

Otherwise, “it may be more rewarding to explore other opportunities”.

Especially this year.

That’s a wrap for edition #5. A big thank you to everyone who has taken our
surveys each week and shared insights and tips for us to follow. Is there
anything else you would like me to cover in the upcoming editions? Who else
would you like to hear from? And how are you dealing with things now, at this
stage of the placement process? Nothing is off-limits, take the survey, or write
to akshaya@the-ken.com.
Until next Tuesday,

Akshaya Chandrasekaran

Akshaya Chandrasekeran is a reporter and podcast host covering careers and workplaces
for The Ken. She began tracking the careers space at The Hindu businessline in 2020, a
crucial moment in the jobs market.