Random thought o f the day: management consulting firms will always be lagging indicators of the business cycle

July 7, 2008

I am not quite sure what the starting salaries are at management consulting firms these days but for argument’s sake let’s say it’s $50,000 for analysts and $100,000 for associates. Given that management consulting firms “rent” their services for at least 5 times the employment costs, the downside of being understaffed is much greater than the downside of being overstaffed. As a result, they will always be over-staffed at the beginning of a recession.

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