Management Consulting: Human Capital
US management consulting firms have demonstrated a mixed approach to managing human capital amid the coronavirus outbreak, with some firms initially committing resources to provide additional employee benefits and job security during the pandemic, while others have sought financial stability through layoffs, hiring freezes, hiring delays and other personnel actions.
1) The Wall Street Journal
- On May 17, 2020, The Wall Street Journal published the article "Big Consulting Firms Push Back Start Dates for New Hires," which discussed how the top American management consulting firms are delaying the start dates of new hires to manage business demand uncertainty and minimize costs amid the pandemic.
- Notably, this is one of the few publicly available, credible sources that documents the personnel actions of top-tier management consultancies such as McKinsey & Co., which have largely avoided the public disclosure of their human capital actions during the coronavirus outbreak.
- In particular, The Wall Street Journal detailed how firms including McKinsey & Co., Boston Consulting Group, Accenture, PricewaterhouseCoopers and KMPG are delaying the start dates of management consultant new hires between one to four months or more, with some firms paying anticipated new hires a stipend until their new start dates.
- Approximately a month and a half earlier, on April 2, 2020, Forbes released the article "Booz Allen Pledges $100 Million To Employees And Job Security Through July 1," which detailed the management consultancy's unique personnel response to the pandemic.
- Specifically, Booz Allen Hamilton diverged from many of its management consultant competitors in guaranteeing the job security of all of its employees through at least July 1, 2020.
- In addition, the firm took the step of allocating $100 million to "enhance its benefits program" with additional hardship funds to assist with "healthcare, childcare, and other COVID-related issues" as well as to support employees who need to take extended time off due to COVID-19.
- Similarly, on April 24, 2020, WorldatWork published the article "Inside Marsh & McLennan’s Quick “No Layoffs” Response," which detailed Marsh & McLennan's similar commitment to job security for consulting staff.
- Notably, Marsh & McLennan President and CEO Dan Glaser was one of the first executives to publicly state that there would be no layoffs at his consultancy.
- In addition, Mr. Glaser committed that there would be "no counting of sick days or vacation days" at the company, as employees navigated the challenges posed by the pandemic in their personal and professional lives.
4) Business Insider
- More recently on June 22, 2020, Business Insider provided an overview of US management consulting firms that are currently hiring despite pandemic concerns within the article "11 recession-proof consulting firms hiring for 6-figure jobs right now
- McKinsey & Co, Bain Consulting and Boston Consulting Group are among the highlighted management consultancies that are hiring in the US for specific skill sets, particularly within booming industries such as pharmaceuticals and healthcare.
- However, many of the other discussed firms (e.g., Accenture) have also announced the layoff or furlough of staff.
5) Australian Financial Review
- At the beginning of COVID-19 shutdowns in the US, on March 11, 2020, the Australian Financial Review published the article "Inside Boston Consulting's COVID-19 response," which detailed how management consultancies began addressing concerns about global travel at the onset of the pandemic in the US.
- By this point in time, management consultancies including Boston Consulting Group, Accenture, Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers had all implemented "similar overall rules around travel during the outbreak" by banning all non-essential travel and otherwise seeking to "limit travel where possible."
- In lieu of stay-in-place orders, firms including Accenture also instituted policies that allowed consultants to "make their own choices" and "determine the options best for them" in regard to working from home, despite the normal importance of traveling to client locations.
6) Business Insider
- More recently on June 25, 2020, Business Insider reported the details of Accenture's employee layoffs due to COVID-19 within the article "Accenture is cutting US staff, and top execs just warned of more pain to come as the consulting giant promotes fewer people and looks to control costs
- Although specific details regarding the number of employee layoffs were not publicly disclosed, Accenture completed a range of personnel reduction actions in May 2020 including the termination of employees who were "lagging personal targets," the promotion of fewer individuals and a reduction in overall hiring.
- In parallel, Accenture CEO Julie Sweet stated as part of the company's earnings call that firing additional low performers would be "another lever we can pull as we look forward."
- Similarly, on June 3, 2020, Consultancy.us reported that Deloitte would layoff a meaningful portion of its management consulting staff in the US within the article "Deloitte cuts 5,000 jobs in US, consulting takes largest hit
- Specifically, Deloitte announced plans in early June to fire 5% of its US workforce or approximately 5,000 employees.
- In particular, Consultancy.us highlighted that Deloitte's advisory and consulting practice in the country would "take a bigger hit in terms of layoffs," given projections that the firm's consultancy practice would see a 16% decrease in revenue in fiscal year 2021.
8) Big 4 Accounting Firms
- As of July 2, 2020, Big 4 Accounting Firms also reported KPMG as among the US consulting practices that were laying off staff within the piece "Big 4 Layoffs & Pay Cut Tracker 2020
- In addition to previous pay cuts among the firm's partners to preserve KPMG's financial health, KPMG reportedly reversed its promise to avoid employee layoffs and fired staff in the US, Canada, UK, Australia and other countries.
- Moreover, the firm announced that existing US staff would not receive bonuses in 2020.
- In contrast, HRKatha reported on April 9, 2020 that Capgemini revised its leave policy to restrict near-term vacations through the end of June within the piece "Capgemini revises leave policy, caps all leaves till June end."
- In parallel, however, management consultants who were not assigned to an active project were forced to take 15 days of immediate leave, while some of the company's planned promotions were delayed.
10) HR Dive
- Meanwhile, HR Dive featured Crowe's unique stand for diversity amid the pandemic within the April 21, 2020 article "Why one employer won't let COVID-19 derail 'critical' diversity efforts
- Specifically, Crowe Chief People Officer Julie Wood announced the firm's commitment to "take the step and make this investment" in diversity and inclusion, despite the uncertainty and cost pressures resulting from the coronavirus outbreak.
- These steps included the April 9 appointment of the consultancy's first Chief Diversity Officer of Chris Mitchell.