Management consultant’s responsibility is to work with businesses or organization and help them to grow, improve their services or products and reach the organizational goal. Also, you can say them, problem solver. They are “management” consultants doesn’t mean they don’t work in different sectors. They work in every sector in a business-like operation, human resources, marketing, finance IT, and sometimes there is a special kind of consultancy.
What do management consults do?
Consultants help an organization or business by providing them with some their skill like they teach them the diagnostic skill. Diagnostic skills enable a manager to visualize the most appropriate response to a situation. So, whenever business faces a problem like that, consultants provide their service and try to solve the problem. And sometimes they consult the manager what they should do when they face a problem like this.
Consultants help top-level managers to make an important decision, help them create long-range plans for a business. Sometimes they only provide their service for certain kind of people like top-level managers. They help the top-level managers to grow interpersonal skill that how they should perform in an event, how they should represent their organization. Besides that, how can a business grow their productivity, how to implies effectiveness and efficiency.
Consultants help in organizing, meaning that how best to group organizational elements, like designing jobs, grouping jobs. They even help an organization in recruiting employees. Most of the time, organization hire consultants to train their employees, how they should increase productivity, build personal skillset.
Different kinds of management consulting
In this new world, every day there is always an opportunity to find a new kind of consultancy. But there are some major sector of management consulting.
Strategy development consultancy
This is one of the major consulting areas. In this area, usually, consultants work with top-level managers. By data analysis and market understanding, they help managers to create a long term strategy and major decision making. They help businesses to understand what they need to do capture the market or enter a new market and in which department they should really do some improvement to make their services better. This type of consultancy is recognized is one of the most difficult and prestigious.
Financial management consultancy
This is another kind of major consultancy area. It is a complex area. The business has to deal with various kind of stuff here like real estate, corporate finance, transaction services. Major decisions like a capital requirement, short-term, long-term capital investment, investment of funds, control and everything. There is some responsibility for them like they need to make sure of the safety of investment, plan a long-term capital structure, funds utilization. There are some other issues that consultants need to deal with like taking decision regarding the net profit distribution, accounting, payments, risk assessment. Their one of the main goals is to suggest a plan that how an organization make sure that they could generate more profit by investing less capital meaning highest return. To become a financial management consultant, you need to have some specific requirements or degree and licence.
Human Resources consulting
It’s related to an organization’s employees. In this sector, consultants main job is to suggest a strategy that how an organization should increase their employee’s productivity in the highest level and help to maintain a positive organizational culture so that an organization runs its course smoothly and reach an organizational goal. There is a quote, “ You don’t build a build a business, you build people and then people build the business.” HRM is always about the people inside the organization. Consultants help an organization by making its policies and systems. Consultants suggest improving finding, recruiting, training and development sector, employee benefit and pensions and also conflict resolution between employees. This sector is like human engineering. Consultants are the architect, they make or suggest plan and organization reach their goal through a human by implementing them. Consultants need to have knowledge about in every sector to understand the employees and how to make the best decisions for them because employees are from various departments.
Operation management consultancy
This is related with how a business can produce their service and products from various input resources efficiently and effectively. This sector is related to process design, product design, job design, supply network design, supply chain management, capacity management, failure prevention, inventory management, quality management, operational improvements. Consultants help managers to make the strategy better, allocate resources and how to better use of them, statistics of input-output, how to control the organizational environment better, cost or capital planning and oversee things. By doing them, an organization understand what they need to do give the customers better products or services by reducing the cost. This kind of consultancy is though but they are recognized as heroes sometimes because they solve problems.
Risk & compliance consulting
It’s mainly related to an organization’s other part of the business. It is related to government monitoring, law and regulation in the country,
maintaining the organizational services and standers. It is totally an organization’s outside work with inside’s products. In every country, there are some standard rules and regulations to maintain a business. Business must maintain those because consumers now value social responsibility. So, If a business wants to survive in the market, they need to make sure that business is doing well by providing standard services or products. And to maintain these, the business must know if they are breaking any law or ethical standards. In this career, consultants must have the depth knowledge of legal rules and regulation.
Besides that, there are also some types of consultants like IT, Environment, Software, Sales
The demand for management consultants at present
You have a business idea. And you start doing the business. A few months later, your business grows and you need to hire more people and manage them and also you need to maintain your service and products. And also a couple of months later you realize that your market is very competitive and you need to do your service better or work on your marketing team. What do you do? Well, In this new world, for this kind of problems, business or organization hire people who have depths knowledge in a certain sector and provide you with their specific skill and help you grow your business or survive in the market. Consultants help your business by providing their skillset like how you can improve marketing and sales strategy, growth strategy, they will help you imagine that what kind of opportunity you will have in the future, what is the best planning for your business, what you need to do make your service better. In a word, your business needs consultants to grow and survive in this market.
The income of management consults
One may wonder how much money does a consultant make for his service. Well, If we want to know, it is a wide area to cover because of it’s the diversified field. According to some statistics, the average pay is around 75,000 dollar per year.
Besides that, these statistics may seem illusory but the professional salary for a consultant is around 60,000 dollar to 65,000 dollars.
It terms of salary, experts usually break down into three different categories.
The categories are,
- Management Consulting,
- Corporate Consulting and
- Independent Consulting
There are some subdivisions in Management consulting area. They are,
- Human Resources,
- Risk and compliance,
- Finance and Accounting.
These are the main sub-sectors in the management consulting area.
Management consultants are paid the highest in terms of salary. Usually, the entry salary for a consultant is around $60K to $100K. And It’s a long journey. The ending point someone becomes a partner. To go there, there are some steps someone has to climb. The next step after the entry becomes an associate. He will be paid around $150K to $200K. And then manager ( $200K – $300K) , Senior Manager ( $300K – $400K), Junior partner ( $500K -$900K), Senior partner ( $1M +)
Why they are being paid so much? Well, this sector is very competitive. Consultants have a face a new challenge every day and he needs to perform very hard.
In Corporate consulting, there are some subdivisions also. IT, Management, Business, Environmental, Marketing, Financial, HR, Social Media, Software are recognized as main subdivisions. Usually, for an IT expert, the salary is around $70,000-$75,000. In terms of salary, management and software consultancy is in the high demand right now and it’s highly paid. Usually, in management consultancy, it is around $90,000 – $1,00,000 and for software, it is $75,000 – $80,000. Financial and marketing consultancy is becoming more demanding and right now in marketing, it is around $60,000-$70,000 annual salaries. As for environmental concerns going on around the world, an organization need to hire consultants for this sector and right now it is highly demanding, like $55,000-$60,000.
How do you become a management consultant?
As we discussed the consultancy job field and salaries, you already know how much it is promising for a future career. Now, you want to become a consultant. What should you do? Well, First of all, the question is, do you need a BBA or MBA degree? Yes and no at the same time. Because consultancy job depends on your skillset. The degree can maybe ease the path a little or considerable in finding some job. But If you have a specialized degree or knowledge in some specific sector, you sure will be highly considered for some specific job like IT or software.
Skillset is the main things in consultancy. You need to have depth knowledge in quantitative and analytical skills, problem-solving skill. Besides that, you definitely will want to join a consultancy firm, so, you also need to have teamwork skill, flexibility and ability to work under pressure. You need good communication and interpersonal skill because you need to continuously communicate and work with people from every sector.
How to start a management consulting firm?
Many of us don’t like to work as an employee. That’s why a huge number of consultants start working as free-lance. But after some time, when we think we have enough skill and experience we want to start a firm. Before we do that, we need to consider some matters.
Most importantly, you need to understand your market, what is missing in your geographical area where is your business based on. You need to understand what is your expertise, what you can offer. You find out those answer, you will know your possible customers. Then, you need to build and grow your personal network continuously. Let others know what you can do for them and what possible service you can serve them. Keep in touch with professionals, meet up with them, go to seminars.
You need to create a long-term plan for your business, create a stable system, your pricing, insurance and other financial stuff. Before going to the market, you need to create some talking point or marketing strategy, so that, you can let people know what is your business is all about and promoting.
Once you so all that, you are ready to play the game.
3 big firms in management consulting
In the second world war, there were big three ( refers to the Winston Churchill, Franklin D Roosevelt and Josef Stalin). And in consulting firms, there is also big three ( MBB, refers to the McKinsey, Boston consulting group and Bain & Company). They are the kings of consulting business by revenue.
According to Wikipedia, In 2017, McKinsey earned more than $10B in revenue. Boston consulting group earned around $7.5B in 2018, and Bain and company earned almost $5B in revenue. They offer the best client service and fantastic professional experience.
Challenges you may face
You have the knowledge of some field, you are an expert. You are in the business? Not yet! You need to have skills like time management and interpersonal skill. You have to attract new customers, maintain continuous relation with old customers. The most important thing is time management skill. You started your business alone, but for your work, your reputation grows and you need to hire people. Another thing is, most of the consultancy is short-term, so when you finish your job or solve a problem your job is done and you need to find new customers. So, it’s a continuous job in this business.
What does a management consultant do exactly?
Answer: They help the business to grow and improve their service and products.
What degree do you need for management consultancy?
Answer: You don’t really need a specific degree but a BBA, MBA degree may help you some time to find a job.
Who are the Big 4 management consulting firms?
Answer: McKinsey company, Boston consulting group, Bain & Company, Deloitte
How much money does a management consultant make?
Answer: It differs, but they make around $65,000 – $75000 per year at primary level.
Management consulting is a great choice of carrier. You can deal with different classes of people. It is a profession with both high income and honour. It can be transformed into entrepreneurship. If you want to take a smart profession, you can think about to be a management consultant.