Freshly minted grads face rocky start as consulting firms delay hiring

BY Xinyuan Cao

Tanvi Gupta was spending time with her family in India when she learned that the starting date of her first job would be pushed from August to October.

She panicked. As an international student who just graduated from Columbia University, she had already applied for Optional Practical Training, a temporary working period that comes with the F-1 student visa. She was to start Aug. 21, and was only eligible for 90 days of unemployment before her legal U.S. working status would be annulled.

Gupta soon expressed her concern to the New York office of Wavestone, the French consulting firm she was joining. The company told her not to worry; she would be onboarded during the required window.

Then, in the last week of August, Wavestone told Gupta they were pushing her starting date to February 2024.

“I was like, okay, I don’t think I’m actually really going to be starting with them,” said Gupta. “Because effectively, it’s a way for them to tell me that, ‘We can’t hire you anymore.’”

Gupta is not alone. Numerous consulting firms have recently delayed start dates for their thousands of new hires until 2024. That leaves recent grads, especially international ones, struggling to cope.

Federal Reserve Economic Data shows an exponential increase in the cost of delivering management consulting in 2021, as firms hired aggressively to meet the demand for restructuring companies in the aftermath of the COVID-19 pandemic. Facing the consequences of overhiring, firms are delaying new hires to cut costs. The companies have also announced layoffs, according to the Wall Street Journal.

Some leading firms, like Accenture Plc, are offering a $25,000 stipend to help recent graduates with living expenses, but incoming employees of smaller consulting firms are facing a long gap without pay.

Another student affected is a 2023 MBA graduate from New York University’s Stern School of Business. The student, who asked for anonymity to avoid losing his offer, signed with IBM Strategy back in October 2022. He was told he would be onboarded in July.

But in early May, IBM told him he wouldn’t be starting before September. He followed up several times, he said, but “I don’t even have a confirmed starting date yet.”

IBM didn’t offer any interim financial support. “That makes me pretty upset,” the grad said, adding that his peer received a $30,000 stipend from Bain. “But I don’t have any negotiation power, so I just have to take it.”

He has been looking for jobs offering packages similar to IBM’s, but so far he hasn’t found one.

“I reached out to the school, and they said the market situation for consulting now is almost like the finance industry in 2008,” he said. “There’s not much I can do.”

According to Dun & Bradstreet, U.S. corporate profits, an indicator of corporate demand for consulting services, dropped 2.8% in the first quarter of 2023 from a year earlier. It’s a signal of economic pressure on the industry.

Another recent international MBA graduate who signed on to work for Wavestone said she was notified in June—a month before her initial start date—that she wouldn’t begin until February 2024. The student spoke on condition of anonymity for fear of losing her offer.

“At this point, they’re saying they overhired,” she said, adding that the company told her they hope their payroll will shrink by February.

According to Statista, the number of employees at Accenture jumped 23.3% in 2021, compared with an average annual increase of 7.2% in the previous five years. Deloitte recorded a 19.3% increase in 2022, up from an average 7.2% yearly increase since 2016.

Wavestone declined to comment. Accenture, Deloitte, IBM, and Bain didn’t respond to the interview inquiry.

The MBA student said she is relying solely on her own savings to get by, which has been a struggle.

“How I’m spending is very mindful,” she said, explaining that she no longer orders drinks when out with friends because “it’s an unnecessary expense.”

The student estimated that around 20% of her classmates are facing consulting deferrals. She said some of her peers hired by Bain and Accenture, and everyone involved with Deloitte, have faced starting delays.

Consulting’s highly lucrative offers of up to $192,000 in base salary have made them the main targets of top-tier business school talent. According to Bloomberg, the consulting industry recruited 31.3% of business school students in 2022, the largest share of hires of any industry.

“Many of my classmates did not live up to the expectations they had when they came to MBA,” said the Stern graduate. “They have to get some part-time jobs. These are really last-resort options.”

This entry was posted on Monday, October 23rd, 2023 at 5:40 pm. It is filed under Business, Featured, Uncategorized and tagged with Accenture, Bain, Deloitte, F-1 Visa, Optional Practical Training, Wavestone. You can follow any responses to this entry through the RSS 2.0 feed.