McK's back office practice has really grown over the past decade with (imo) little to show for it. Their whole QuantumBlack offering is utter bullshit, and they had a couple other back office boondoggles.
Also, doesn't help that companies don't hire Management Consultants as much anymore AND implementation firms like Accenture, WITCH, Deloitte, and EY have climbed up the value chain to offer bundled Management Consulting and Implementation, which McK only really started offering like 5-6 years ago.
On the other hand, f** Partners, having too make do with $700k instead of $1.4m:
"Under a plan dubbed Project Magnolia, the management team is hoping the move will help preserve the compensation pool for its partners, the people said, asking not to be identified discussing non-public information."
I don't work in the space anymore, but I work in an adjacent sector so I still interact with EMs and Partners.
BCG Gamma is similar to QuantumBlack, but BCG's Lighthouse is much more comparable to QuantumBlack.
That said, in general BCG hasn't seen the same level of scope creep as McK has. BCG has also had a strong Life Sciences, VC, and Tech Due Dilligence practice because of VCs origins in Boston (YC was originally in Boston for example).
That said, I do think BCG and Bain will also do some back office culling now that McK has opened the door.
Honestly I'm now wondering how much of these "startegy/management consultants" jobs could be automated with AI. I mean from my understanding their primary work product is a slide deck.
I get the sense that the price you pay for the advice and the perceived work that goes into it has a direct relationship with how you take and act on that advice, at least for the people and orgs that consume these consulting services. Having an AI spit out slides would cheapen the effect, to the point where you might as well listen to the other people in the room with you instead of their AI.
Consultants make leadership feel good or look good, reduce cognitive load, provide cover for decisions, many other things along those lines, none of which are about a deck, which is incidental. They have to, as a firm, have the appearance of being vaunted and smart, otherwise it doesn't work, so the institutional credibility, regardless of whether one believes objectively in its merit, is important.
I'm not saying it's good or bad, but the sooner you realize that the problems consultants are solving are almost certainly not the "technical" problem in front of them, the sooner you understand the industry
I enjoy a good laugh at the expense of management consultants, and I honestly thought that chat GPT really reminded me of their style. But while slide decks are the only tangible thing consultants produce, they represent a very small amount of the value that consultants bring. Until you can get an AI to navigate cutthroat C-level politics, and defend a strategy from attacks by internal factions that trying to undermine any rivals then I don't think AI will be able to do much.
MBB consultants' real value is giving executives the breathing room to be able to execute what's in the deck (i.e., driving consensus and navigating difficult politics)
And when do the announcements come from Bain and BCG as well, as if this isn't due to market conditions, it's due to their specific network being edged out.
I'd wonder if it signals a shift in consulting in general, as a big part of their value prop was you became part of the network when you hired them, but for some reason McKinsey is letting on that they are short those relationships.
When the smart money with as insider knowledge as it gets radically hedges the success and growth of their customers, that sounds like an economic leading indicator.
<< When the smart money with as insider knowledge as it gets radically hedges the success and growth of their customers
I want to agree, but is that insider knowledge even appropriately distributed to make that kind of determination. I want to believe that senior management reads the reports generated by their underlings, but part of me just assumes they merely skim TLDR section with very few taking the information in reports seriously.
Quite a lot of years ago, when I was much younger (and incredibly naive about "consultants") and doing onsite support, I was tasked with helping out some security consultants as they ran some sort of pentest, in case they needed some assistance with the client computer they were assigned.
We chatted, and despite their being clearly disinterested in their work and talking to me (instead going on and on about which bar they were heading to), I learned they were literally doing this. They were running nessus with a default ruleset and turning that in as the flaws. That was it.
I felt incredibly disappointed, sorta kinda angry, and learned a huge lesson that day.
There is a large market for useless security work from companies that need to demonstrate that some kind of security activity has taken place but don't particularly care about security as an "end".
In these situations everyone is just "going through the motions", the PM who hired them, the pentesters, the devs who dutifully put pointless findings in the backlog, compliance people tracking stuff in their register...
The only thing worse is not having a process at all.
I've worked in various consulting roles, and one thing that's always been true is the "rank and file" don't like you and think they know better, can do better, and already know or have thought of everything you do. They miss that you're hired by leadrship, for other reasons (see my other post in the thread). I'd actually be worried (and it's happened) when the line employees like you as an external consultant and think you're adding value. It means you're engaging at the wrong level and probably not getting at the root of what you're there to address.
The bubble grows until it pops. Between 2020 and 2022 liquidity was high and global problems (COVID, Russia-Ukraine, US inflation) meant upper management needed more support.
So they hired lots of folks and (anecdotal evidence) even raised the signing bonus to attract more talent. However, growth wasn't as sustainable as it seemed to be.
Man, I miss Clayton Christensen. Would love to read his insights on the world right now, the role of consulting firms and the rise of AI-powered products.
McKinsey’s brand has taken a beating these last few years with the company going from scandal to scandal. The NY Times has been doing a whole string of stories on the firm’s questionable business practices and ethics.
Funny though how it sounds like, per their own admission, McKinsey badly mismanaged running their own internal operation and woke up to realize they need mass layoffs. Sort of causes one to question how much one should listen to these so called “experts” on how to manage a business. Mass layoffs generally don’t follow strong management execution.
I’ve been a customer of management consultants on a few occasions. There were times when some of the input helped but mostly that was essentially just hired hands to do rote organizational work like interviewing 100 people and summarizing what they said in a nice PPT deck delivered to my desk. The “experts” were woefully out of touch with reality. They were more following hype cycles than providing any sort of real valuable strategic advice. Most had never actually run a business or done the thing they were offering up advice on, and it showed.
But wouldn't they basically have no choice but to scale up their own workforce if their client's business is booming? It wouldn't be a good look to say "hey actually we can't take your project on because we believe a recession is coming".
Consulting could be even more "boom and bust" than normal companies since consulting budgets might be the first thing to get cut when times get tough.
> It wouldn't be a good look to say "hey actually we can't take your project on because we believe a recession is coming".
Why not? I'd trust a consultant who demonstrably trusted their own judgement like that even more, and even if they were wrong on that particular call.
I may have to find a different consultant because that one couldn't take me on, but I'd be more likely to consider checking on them later to see if circumstances have changed enough to bring me in.
(Just to be clear, I'm talking about business consultants generally. Certainly not McKinsey specifically)
Management consulting isn't about providing advice to management. It's about building pretty PowerPoint decks to justify decisions already made.
That said, expanding to take advantage of temporary market opportunities and then contracting when those opportunities isn't bad advice, per se. Probably generates more profits over a more static, restrained path.
> Mass layoffs generally don’t follow strong management execution.
I realize that's a common sentiment on HN, but it's not really among executive leadership in US businesses. Sure, nobody wants to do layoffs, but then you're essentially left with 2 choices:
1. Potentially underhire despite growing business opportunity.
2. Potentially overhire to take advantage of business opportunities that may not eventually come to fruition.
What people who hire management consultants care about is that they have the decisiveness to take action when needed, and having significant layoffs is not really a ding one way or the other.
> Why not hire contractors or contract-to-hire for those bursty work needs?
To start, it's not legal. If the people you are hiring are doing the same work as full time employees, with the same work structure, you're not supposed to hire them as contractors.
> Or spin up a separate company and buy services from them?
I mean, companies certainly do outsource to third parties for "bursty" needs, but if you think this is going to be an important core part of your business going forward, why would you go through the organizational complexity to spin up a new entity? How would you explain this to recruits? "Congrats, you've been hired by the slightly shittier version of us, and when layoffs come you'll be the first to get cut." I mean, companies do actually kinda do that, but it's very much a hierarchical system - anyone with the ability to get hired by "main company" is not going to take a position with "shitty clone".
> If the people you are hiring are doing the same work as full time employees, with the same work structure, you're not supposed to hire them as contractors.
This is not true at all. Many firms do “staff augmentation” for exactly what the parent described, bursty work for clients on a time and materials basis.
Right but the difference is that those contractors need to be W-2 employees of some other company. You can't hire them as 1099 independent contractors. That used to be common practice among tech companies but federal and state income tax authorities have cracked down hard on it.
Well yes and no. Those contracting firms don't keep a lot of bench resources. During slow periods they lay off employees just like every other employer. And during boom times they jack up their rates and still don't have many experiences contractors available on short notice. Using those staffing agencies works fine for small bursts but if you need thousands then you run into practical limits.
It wouldn’t need to be a shitty clone. Maybe it would pay 10% more but be known to have less job security in a downturn.
But also, I didn’t specifically mean 1099 independent contractors, just “contractors”. Meaning, people employed for a fixed contract length of 6 or 12 months and then possibly renewed if business is still good.
It's a common sentiment everywhere. That's just basic human decency. Hiring shouldn't be used as a variable of adjustment. That's people lives you are playing with. That's why any decent country has some employee protection in its law.
If you want temporary workers to face a burst of activity, hire temps. They are paid more specifically for this reason. It will never cease to amaze me that companies in the US seemingly can have their cake and eat it too with workers neither organising nor complaining.
Many countries make hiring temporary workers very hard or unattractive. In my country there is an additional tax and strict terms on how long they can be employed. So they end up being hired and then fired instead. Ironically, it's often the left wing politicians pushing companies to offer fixed employment instead of using flexible labour. Of course, they also try to make the firing as hard as possible. It would be much better if they realise that in some businesses labour demand just fluctuates and it's not necessarily capitalists trying to take advantage of the little man.
Placing strict terms on how long temporary workers can be employed is not an issue in the case you point. If your demand really fluctuates, you will have ended their employment long before the generally generous limit.
Avoiding long term employment though a stint of short term contracts is legitimate. You don’t want company trying to wiggle out of employment law through this kind of stints and experience prove some definitely will.
Business cycles in many industries can be 5-10 years, much longer than you are allowed to have people on temp contracts. Forcing companies to keep staff around they no longer need tends to make matters worse in the long run. I think the Danish model of combining a very flexible labour market with a great social safety net is better for all involved.
> That's why any decent country has some employee protection in its law.
You can probably draw a linear relationship between the amount of employee protection in the laws of a country and its unemployment rate, especially among younger people.
This sort of stuff always benefits those already in the system at the cost of those outside looking in. Cities with stronger tenant protection have higher rents than places without. Homelessness is worse in places with rent control.
> You can probably draw a linear relationship between the amount of employee protection in the laws of a country and its unemployment rate, especially among younger people.
You can not draw a linear relationship between those. Top unemployment rates over the last 10 years: Greece, Turkey, Spain, Costa Rica, Poland, Slovak Republic... [0]
One thing you're ignoring is that countries with strong employee protection also tend have a strong social safety net where unemployed people have a backstop, they haven't lost their healthcare and assistance, so being unemployed isn't the peril it is somewhere that employee protections are basically nil.
Correlation is not causality, strong tenant protections allow people to live in places longer term, which is seen as desirable to forming neighborhoods and bonds among neighbors, which in turn makes it a more desirable place to live. Homelessness in a specific place has a diverse number of factors that play into it, including geographic factors, from ambient air temperature, housing prices, employment availability, social services available, etc etc etc. You can't draw a line from rent control to homelessness unless those are the only two graphs you're looking at.
> It's a common sentiment everywhere. That's just basic human decency. Hiring shouldn't be used as a variable of adjustment. That's people lives you are playing with. That's why any decent country has some employee protection in its law.
Sorry, as someone who has been through layoffs, I totally disagree. I don't think it falls under "basic human decency" that just because a company hires me that they have an obligation to keep me on until I retire or die. Essentially what you are arguing is "It would be better to never have hired that person at all, and provide them a salary for N years, than to hire them if you may one day lay them off due to changes in the business."
I'd much prefer either (a) requirements for a longer notice period or severance and/or (b) the government providing a better safety net for the ups and downs of the business cycle (like someone commented with the Danish model). I especially think it's nuts that in the US so many critical benefits are tied to employment, like healthcare.
I've always found that saying disrespectful because it treats teaching like everyone's second choice. Many that "can" choose to teach. Currently licensed and practicing surgeons are the primary way that medical residents learn how to become effective surgeons. I would never trust somebody incapable of surgery with the education of a surgeon.
It is and sadly similar sentiment exists in the old country. I am not entirely certain why that is the case. Granted, they are always outliers and heavens know I had my share of bad teachers ( partly because it is a hard thing to do well and partly probably because, with some interesting exceptions it is not that well paid compared to non-teaching variants ). If one is to look at income alone ( again with the exception of ,say, some Chicago teachers ) and effort involved, the choice and sentiment makes sense.
An associate is typically a fresh MBA grad or someone with a few years of tenure out of school.
Awkward imbalance of levels aside, I enjoy the consulting lifestyle personally. It’s interesting to work with many different clients and have enough political clout to get things done on a fast timeline.
They do. The client paid a load of money to hear what the consultant said, there’s a lot of incentive to act on it otherwise you’re the exec that hired a load of consultants only to ignore them.
Well, if you have an MBA from San Jose State, you will be hired as a low level analyst at Apple/Google/Netapp. However, if you get an MBA from Stanford GSB/Harvard BS, you can join as an associate at McKinsey/Bain/BCG, then jump to Apple/Google/Netapp as a VP/Senior Director of Strategy, thereby putting you in the elite class.
That's the difference, that's why there is so much competition to get into top three business schools. If one want to be a top level exec, go to a top three b-school, then jump laterally to companies.
>if you get an MBA from Stanford GSB/Harvard BS you can join as an associate at McKinsey/Bain/BCG, then jump to Apple/Google/Netapp as a VP/Senior Director of Strategy
This is laughably inaccurate. Or maybe the big three have done such a great job at marketing that people on HN think this. To bring things back to reality, your typical MBA associate joining a top 3 consulting firm is going to be at roughly the same level as an equivalent MS grad and/or someone with a few of years of tech experience joining FAANG. i.e., Someone in the L4-L5 territory based on profile variations. Nobody is jumping from associate to VP.
They are all competent. It’s just that they work for their principal in the company and are always selling.
If you think something these guys are doing is awful or dumb, follow the money. The guy signing the checks is calling the shots.
McKinsey’s lack of ethics and self-preservation is notable. But they weren’t hoodwinking innocents into preying on the weak. Perdue and the medical providers writing those oxycodone scripts to make money.
The other stuff is a byproduct of modern corporate management. Most companies don’t have departments that do administrative or organizational analysis. They run lean and hire the capability.
> The other stuff is a byproduct of modern corporate management. Most companies don’t have departments that do administrative or organizational analysis. They run lean and hire the capability.
Another quality comment from Spooky23. Your points cannot be understated. I would add my own biased and limited insight; companies should not* investigate the history, decision-making, conflicts and other explosive topics that makes a company tick. The kind of topics managers gossip about but are loathe to put into writing as key insights, either out of fear or out of a lack of detachment.
If the company needs that "central intelligence" function enough to hire internally, the company is probably dying, i.e. the management has failed and can no longer produce intelligence. But when management fails every now and then, executives will bring on a neutral third party to perform this kind of sensitive research, which could lead to heads rolling. Or that third party could just be a hatchetmen who does the killing themselves.
When you have to layoff people or have hard conversations or navigate politics qualities that are required are - being good looking , being popular and liked , being pleasant in conversations and demeanor. Management consultants usually come from wealthy or upper middle class families , go to elite schools and are usually good looking and have a very pleasant demeanor. So that’s why they are hired to do what leadership in a big organization cannot for fear of revolt or bad blood.
McK also pivoted into trying to execute over the past few years, picking up some design and digital capabilities to compete for Big Five-style work. I ... haven't been impressed with their work, to put it mildly, and I'm curious how much of that capability they're jettisoning as part of this restructuring.
Gotta love the fact that they're just completely transparent that they're going this to preserve the partner comp pool, though. Even for the MBBs that's a hell of a "fuck you" to the folks doing the hard work.
> Mass layoffs generally don’t follow strong management execution.
Professional service firms largely sell their time. Yet demand for their services is anything but (just ask people that work in restructuring). Hiring and layoffs in these businesses is simply capacity management.
>Funny though how it sounds like, per their own admission, McKinsey badly mismanaged running their own internal operation and woke up to realize they need mass layoffs.
Classic example of this is Bain almost going bust during the 1990s. Mitt Romney, who by then had left to start Bain Capital, had to come back to right the ship.
Another casualty of corporate budget cuts – middle managers can no longer pay companies like McKinsey tens of thousands of dollars for pretty PowerPoints.
Eventually GenAI will be a partial replacement for entry level / back office work at partnerships like law firms and management consulting shops. Starts with Harvey and legal documentation, continues to management consulting https://twitter.com/SilasAlberti/status/1608037989623414791?... chatba.com
1) they're taking advantage of market conditions to top grade
2) they need to protect partner payouts
3) they will replace these folks over the coming 18 months with cheaper, younger versions (but won't get anywhere near the absurdly low average annual comp of Accenture)
These topics on HN (where I know the industry well) make me realize how stupid I must sound when I have strong opinions on things I have nothing but anecdotal experience with. It's humbling to realize that I must also say things that are on par with "can't chatGPT do their job" or "all they do is make slides".
In aggregate and over the long term (~100 years or so in the case of consulting), most services find a fair market value. If McK is a ~$15B company running at ~30-40% margins, it is likely delivering some value to someone who is willing to pay for it. That value may be overstated to people not paying for it, or they may not understand the value because they are not faced with the same challenges as the typical McK customer.
...and that's ok, they are not the intended market.
No-one ever got fired for appointing McKinsey, and it's pretty easy to provide a positive RoI when the person hiring you is spending other people's money. These consultants certainly provide value to someone, but whether that translates into an overall net positive for the organisation that engaged them is an open question.
> it is likely delivering some value to someone who is willing to pay for it.
I'm suddenly curious whether / how many of McKinsey's actual customers have a child in an MBA program that McKinsey recruits from. Get your company to spend money for a particular consulting firm, and then use that relationship with a particular consulting firm to get a leg-up for your kid?
Are there processes in place at the large consulting firms to prevent this sort of quid pro quo?
i'm sure it's happened somewhere...I'm not sure but from what I've seen, incredibly hard to game recruitment. Even if you do, the kid won't survive long -- it's up or out every ~2 years.
Seems like a lot of work for not much payoff.
What is encouraged is treating everyone leaving whether regrettable/non-regrettable with a great deal of love and care -- placement services are pretty good. There is a good chance those ex-McK folk are future clients.
And those ex-McKinsey executives are not only primed to hire their former colleagues, but assuming they've been doing a good job, they're McKinsey advertisements at their current job.
Is it possible that AI is the real reason for a lot of these layoffs?
In anticipation and to force internal adoption of AI assisted workforce, they now have immediate need to replace the workforce they just laid off.
Companies can invest in AI with the money that would have went to tens of thousands of salaries and benefit packages.
112 comments
[ 2.2 ms ] story [ 178 ms ] threadMcK's back office practice has really grown over the past decade with (imo) little to show for it. Their whole QuantumBlack offering is utter bullshit, and they had a couple other back office boondoggles.
Also, doesn't help that companies don't hire Management Consultants as much anymore AND implementation firms like Accenture, WITCH, Deloitte, and EY have climbed up the value chain to offer bundled Management Consulting and Implementation, which McK only really started offering like 5-6 years ago.
On the other hand, f** Partners, having too make do with $700k instead of $1.4m:
"Under a plan dubbed Project Magnolia, the management team is hoping the move will help preserve the compensation pool for its partners, the people said, asking not to be identified discussing non-public information."
BCG Gamma is similar to QuantumBlack, but BCG's Lighthouse is much more comparable to QuantumBlack.
That said, in general BCG hasn't seen the same level of scope creep as McK has. BCG has also had a strong Life Sciences, VC, and Tech Due Dilligence practice because of VCs origins in Boston (YC was originally in Boston for example).
That said, I do think BCG and Bain will also do some back office culling now that McK has opened the door.
I'm not saying it's good or bad, but the sooner you realize that the problems consultants are solving are almost certainly not the "technical" problem in front of them, the sooner you understand the industry
MBB consultants' real value is giving executives the breathing room to be able to execute what's in the deck (i.e., driving consensus and navigating difficult politics)
- propose solution
- insist that all feedback must be to ChatAI
- exhaust people who disagree while ChatAI politely insists on its view
- call anyone who works outside the ChatAI “not a team player”
- insist they’re not being constructive because they’re “not adding feedback into the process”
- remove those who persist in not arguing with the wall or complying, using their refusal to “do the job” with ChatAI
- proceed with your original PowerPoint
I'd wonder if it signals a shift in consulting in general, as a big part of their value prop was you became part of the network when you hired them, but for some reason McKinsey is letting on that they are short those relationships.
When the smart money with as insider knowledge as it gets radically hedges the success and growth of their customers, that sounds like an economic leading indicator.
I want to agree, but is that insider knowledge even appropriately distributed to make that kind of determination. I want to believe that senior management reads the reports generated by their underlings, but part of me just assumes they merely skim TLDR section with very few taking the information in reports seriously.
We chatted, and despite their being clearly disinterested in their work and talking to me (instead going on and on about which bar they were heading to), I learned they were literally doing this. They were running nessus with a default ruleset and turning that in as the flaws. That was it.
I felt incredibly disappointed, sorta kinda angry, and learned a huge lesson that day.
In these situations everyone is just "going through the motions", the PM who hired them, the pentesters, the devs who dutifully put pointless findings in the backlog, compliance people tracking stuff in their register...
The only thing worse is not having a process at all.
Him: Hello Sean, have you got 5 mins? I’m from X and we are the world’s first company to offer penetration testing as a service…
Me: If I can just stop you there, penetration testing already is a service.
Him: … err … no well the thing is we offer the ability to…
Me: Instead of running the pen test for the company you have a web dashboard which allows the company to run it for itself?
Him: … err … yes.
Me: I can see how that’s convenient for you. Well if you were running it for me that would in fact be a service, yes?
Him: … err …. <long pause> … yes
Me: So your “Penetration testing as a service” is in fact less of a service than all the other penetration testing companies are offering.
Him: … err … perhaps you’re not our target customer.
Me: No
This says all you need to know.
Reminded me of similar news I read yesterday about HSBC: https://www.reuters.com/markets/europe/hsbc-cuts-staff-bonus...
"HSBC cuts staff bonus pool, lifts CEO Quinn's total pay"
Sure.
Funny though how it sounds like, per their own admission, McKinsey badly mismanaged running their own internal operation and woke up to realize they need mass layoffs. Sort of causes one to question how much one should listen to these so called “experts” on how to manage a business. Mass layoffs generally don’t follow strong management execution.
I’ve been a customer of management consultants on a few occasions. There were times when some of the input helped but mostly that was essentially just hired hands to do rote organizational work like interviewing 100 people and summarizing what they said in a nice PPT deck delivered to my desk. The “experts” were woefully out of touch with reality. They were more following hype cycles than providing any sort of real valuable strategic advice. Most had never actually run a business or done the thing they were offering up advice on, and it showed.
Consulting could be even more "boom and bust" than normal companies since consulting budgets might be the first thing to get cut when times get tough.
Why not? I'd trust a consultant who demonstrably trusted their own judgement like that even more, and even if they were wrong on that particular call.
I may have to find a different consultant because that one couldn't take me on, but I'd be more likely to consider checking on them later to see if circumstances have changed enough to bring me in.
(Just to be clear, I'm talking about business consultants generally. Certainly not McKinsey specifically)
That said, expanding to take advantage of temporary market opportunities and then contracting when those opportunities isn't bad advice, per se. Probably generates more profits over a more static, restrained path.
I realize that's a common sentiment on HN, but it's not really among executive leadership in US businesses. Sure, nobody wants to do layoffs, but then you're essentially left with 2 choices:
1. Potentially underhire despite growing business opportunity.
2. Potentially overhire to take advantage of business opportunities that may not eventually come to fruition.
What people who hire management consultants care about is that they have the decisiveness to take action when needed, and having significant layoffs is not really a ding one way or the other.
To start, it's not legal. If the people you are hiring are doing the same work as full time employees, with the same work structure, you're not supposed to hire them as contractors.
> Or spin up a separate company and buy services from them?
I mean, companies certainly do outsource to third parties for "bursty" needs, but if you think this is going to be an important core part of your business going forward, why would you go through the organizational complexity to spin up a new entity? How would you explain this to recruits? "Congrats, you've been hired by the slightly shittier version of us, and when layoffs come you'll be the first to get cut." I mean, companies do actually kinda do that, but it's very much a hierarchical system - anyone with the ability to get hired by "main company" is not going to take a position with "shitty clone".
This is not true at all. Many firms do “staff augmentation” for exactly what the parent described, bursty work for clients on a time and materials basis.
But the point is there are “bursty” options if firms wish to to pursue it as an option.
Bench is a thing.
But also, I didn’t specifically mean 1099 independent contractors, just “contractors”. Meaning, people employed for a fixed contract length of 6 or 12 months and then possibly renewed if business is still good.
If you want temporary workers to face a burst of activity, hire temps. They are paid more specifically for this reason. It will never cease to amaze me that companies in the US seemingly can have their cake and eat it too with workers neither organising nor complaining.
Placing strict terms on how long temporary workers can be employed is not an issue in the case you point. If your demand really fluctuates, you will have ended their employment long before the generally generous limit.
Avoiding long term employment though a stint of short term contracts is legitimate. You don’t want company trying to wiggle out of employment law through this kind of stints and experience prove some definitely will.
You can probably draw a linear relationship between the amount of employee protection in the laws of a country and its unemployment rate, especially among younger people.
This sort of stuff always benefits those already in the system at the cost of those outside looking in. Cities with stronger tenant protection have higher rents than places without. Homelessness is worse in places with rent control.
You can not draw a linear relationship between those. Top unemployment rates over the last 10 years: Greece, Turkey, Spain, Costa Rica, Poland, Slovak Republic... [0]
One thing you're ignoring is that countries with strong employee protection also tend have a strong social safety net where unemployed people have a backstop, they haven't lost their healthcare and assistance, so being unemployed isn't the peril it is somewhere that employee protections are basically nil.
Correlation is not causality, strong tenant protections allow people to live in places longer term, which is seen as desirable to forming neighborhoods and bonds among neighbors, which in turn makes it a more desirable place to live. Homelessness in a specific place has a diverse number of factors that play into it, including geographic factors, from ambient air temperature, housing prices, employment availability, social services available, etc etc etc. You can't draw a line from rent control to homelessness unless those are the only two graphs you're looking at.
[0] https://data.oecd.org/unemp/unemployment-rate.htm#indicator-...
Sorry, as someone who has been through layoffs, I totally disagree. I don't think it falls under "basic human decency" that just because a company hires me that they have an obligation to keep me on until I retire or die. Essentially what you are arguing is "It would be better to never have hired that person at all, and provide them a salary for N years, than to hire them if you may one day lay them off due to changes in the business."
I'd much prefer either (a) requirements for a longer notice period or severance and/or (b) the government providing a better safety net for the ups and downs of the business cycle (like someone commented with the Danish model). I especially think it's nuts that in the US so many critical benefits are tied to employment, like healthcare.
Also the economy is relatively strong at the moment, so one could argue this is in fact a forward-looking reduction.
"Those who can, do. Those who can't, teach."
Agreed.
Awkward imbalance of levels aside, I enjoy the consulting lifestyle personally. It’s interesting to work with many different clients and have enough political clout to get things done on a fast timeline.
That's the difference, that's why there is so much competition to get into top three business schools. If one want to be a top level exec, go to a top three b-school, then jump laterally to companies.
This is laughably inaccurate. Or maybe the big three have done such a great job at marketing that people on HN think this. To bring things back to reality, your typical MBA associate joining a top 3 consulting firm is going to be at roughly the same level as an equivalent MS grad and/or someone with a few of years of tech experience joining FAANG. i.e., Someone in the L4-L5 territory based on profile variations. Nobody is jumping from associate to VP.
The Big Con by Mariana Mazzucato and Rosie Collington review – how consultancy firms cash in
https://www.theguardian.com/books/2023/feb/16/the-big-con-by...
If you think something these guys are doing is awful or dumb, follow the money. The guy signing the checks is calling the shots.
McKinsey’s lack of ethics and self-preservation is notable. But they weren’t hoodwinking innocents into preying on the weak. Perdue and the medical providers writing those oxycodone scripts to make money.
The other stuff is a byproduct of modern corporate management. Most companies don’t have departments that do administrative or organizational analysis. They run lean and hire the capability.
Are they doing anything useful besides telling clueless CEOs what they want to hear?
Is there any difference between a stupid person and a smart person doing something pointless?
Another quality comment from Spooky23. Your points cannot be understated. I would add my own biased and limited insight; companies should not* investigate the history, decision-making, conflicts and other explosive topics that makes a company tick. The kind of topics managers gossip about but are loathe to put into writing as key insights, either out of fear or out of a lack of detachment.
If the company needs that "central intelligence" function enough to hire internally, the company is probably dying, i.e. the management has failed and can no longer produce intelligence. But when management fails every now and then, executives will bring on a neutral third party to perform this kind of sensitive research, which could lead to heads rolling. Or that third party could just be a hatchetmen who does the killing themselves.
Gotta love the fact that they're just completely transparent that they're going this to preserve the partner comp pool, though. Even for the MBBs that's a hell of a "fuck you" to the folks doing the hard work.
Professional service firms largely sell their time. Yet demand for their services is anything but (just ask people that work in restructuring). Hiring and layoffs in these businesses is simply capacity management.
In 2023, the only thing mass layoffs follow is the Fed raising interest rates.
Many of the businesses doing them are quite healthy.
Classic example of this is Bain almost going bust during the 1990s. Mitt Romney, who by then had left to start Bain Capital, had to come back to right the ship.
Same thing with university research grants. Results better make the funders happy, or they don't come back to your farm stand.
1) McKinsey did numbers and found consultants are meeting numbers but support functions are not.
2) Consultants doing consultancy for eliminating redundancies could't see that consultants can ever be redundant unless they are offloaded to clients.
McKinsey consults so they hire when clients need more and fire when clients need less.
We’ll see if this just ends up being an economic indicator that big companies that can afford high bill rate consultants have less money to spend.
https://www.yardeni.com/pub/sp500margin.pdf
The profit margins (S&P500) have dropped from their possibly all-time highs to what they were back in 2017/18 (the previous highs).
In aggregate and over the long term (~100 years or so in the case of consulting), most services find a fair market value. If McK is a ~$15B company running at ~30-40% margins, it is likely delivering some value to someone who is willing to pay for it. That value may be overstated to people not paying for it, or they may not understand the value because they are not faced with the same challenges as the typical McK customer.
...and that's ok, they are not the intended market.
The main purpose these companies provide is to rubber stamp decisions and claim that experts made them
(for the record...former salary, several years ago)
I'm suddenly curious whether / how many of McKinsey's actual customers have a child in an MBA program that McKinsey recruits from. Get your company to spend money for a particular consulting firm, and then use that relationship with a particular consulting firm to get a leg-up for your kid?
Are there processes in place at the large consulting firms to prevent this sort of quid pro quo?
Seems like a lot of work for not much payoff.
What is encouraged is treating everyone leaving whether regrettable/non-regrettable with a great deal of love and care -- placement services are pretty good. There is a good chance those ex-McK folk are future clients.
Now that's a good deal for McKinsey.
They are quite successful.
Not really. But it would be funny if it happened.