Management Consulting

Overview

Thirty-three percent are self-employed, about twice the average for other management, business, and financial occupations.

Most positions in private industry require a master's degree and 5 years of specialized experience; a bachelor's degree is sufficient for entry-level government jobs.

Despite projected faster-than-average employment growth, intense competition is expected for jobs.

Management analysts held about 501,000 jobs in 2000. Thirty-three percent of these workers were self-employed, almost twice the average for other management, business, and financial occupations.

Management analysts are found throughout the country, but employment is concentrated in large metropolitan areas. Most work in management consulting and computer and data processing firms, and for Federal, State, and local governments. The majority of those working for the Federal Government are in the U.S. Department of Defense.

The Career

As business becomes more complex, the Nation's firms are continually faced with new challenges. Firms increasingly rely on management analysts to help them remain competitive amidst these changes. Management analysts, often referred to as management consultants in private industry, analyze and propose ways to improve an organization's structure, efficiency, or profits. For example, a small but rapidly growing company that needs help improving the system of control over inventories and expenses may decide to employ a consultant who is an expert in just-in-time inventory management. In another case, a large company that has recently acquired a new division may hire management analysts to help reorganize the corporate structure and eliminate duplicate or nonessential jobs. In recent years, information technology and electronic commerce have provided new opportunities for management analysts. Companies hire consultants to develop strategies for entering and remaining competitive in the new electronic marketplace

Firms providing management analysis range in size from a single practitioner to large international organizations employing thousands of consultants. Some analysts and consultants specialize in a specific industry while others specialize by type of business function, such as human resources or information systems. In government, management analysts tend to specialize by type of agency. The work of management analysts and consultants varies with each client or employer, and from project to project.

Some projects require a team of consultants, each specializing in one area. In other projects, consultants work independently with the organization's managers. In all cases, analysts and consultants collect, review, and analyze information in order to make recommendations to managers.

Both public and private organizations use consultants for a variety of reasons. Some lack the internal resources needed to handle a project, while others need a consultant's expertise to determine what resources will be required and what problems may be encountered if they pursue a particular opportunity. To retain a consultant, a company first solicits proposals from a number of consulting firms specializing in the area in which it needs assistance. These proposals include the estimated cost and scope of the project, staffing requirements, references from a number of previous clients, and a completion deadline. The company then selects the proposal that best suits its needs.

After obtaining an assignment or contract, management analysts first define the nature and extent of the problem. During this phase, they analyze relevant data, which may include annual revenues, employment, or expenditures, and interview managers and employees while observing their operations.

The analyst or consultant then develops solutions to the problem. In the course of preparing their recommendations, they take into account the nature of the organization, the relationship it has with others in the industry, and its internal organization and culture. Insight into the problem often is gained by building and solving mathematical models.

Once they have decided on a course of action, consultants report their findings and recommendations to the client. These suggestions usually are submitted in writing, but oral presentations regarding findings also are common. For some projects, management analysts are retained to help implement the suggestions they have made.

Management analysts in government agencies use the same skills as their private-sector colleagues to advise managers on many types of issues, most of which are similar to the problems faced by private firms. For example, if an agency is planning to purchase personal computers, it must first determine which type to buy, given its budget and data processing needs. In this case, management analysts would assess the prices and characteristics of various machines and determine which best meets the agency's needs.

The Job

Management analysts usually divide their time between their offices and the client's site. In either situation, much of an analyst's time is spent indoors in clean, well-lit offices. Because they must spend a significant portion of their time with clients, analysts travel frequently.

Analysts and consultants generally work at least 40 hours a week. Uncompensated overtime is common, especially when project deadlines are approaching. Analysts may experience a great deal of stress as a result of trying to meet a client's demands, often on a tight schedule.

Self-employed consultants can set their workload and hours and work at home. On the other hand, their livelihood depends on their ability to maintain and expand their client base. Salaried consultants also must impress potential clients to get and keep clients for their company.

Training Required

Educational requirements for entry-level jobs in this field vary widely between private industry and government. Most employers in private industry generally seek individuals with a master's degree in business administration or a related discipline. Some employers also require at least 5 years of experience in the field in which they plan to consult in addition to a master's degree. Most government agencies hire people with a bachelor's degree and no pertinent work experience for entry-level management analyst positions.

Many fields of study provide a suitable educational background for this occupation because of the wide range of areas addressed by management analysts. These include most academic programs in business and management, as well as computer and information sciences and engineering. In addition to the appropriate formal education, most entrants to this occupation have years of experience in management, human resources, information technology, or other specialties. Analysts also routinely attend conferences to keep abreast of current developments in their field.

Salary

Salaries for management analysts vary widely by experience, education, and employer. Median annual earnings of management analysts in 2000 were $55,040. The middle 50 percent earned between $41,970 and $72,630. The lowest 10 percent earned less than $32,860, and the highest 10 percent earned more than $98,210.

According to a 2000 survey by the Association of Management Consulting Firms, earnings—including bonuses and profit sharing—for research associates in member firms averaged $39,200; for entry-level consultants, $58,000; for management consultants, $76,300; for senior consultants, $100,300; for junior partners, $133,500; and for senior partners, $259,500.

Salaried management analysts usually receive common benefits such as health and life insurance, a retirement plan, vacation, and sick leave, as well as less common benefits such as profit sharing and bonuses for outstanding work. In addition, all travel expenses usually are reimbursed by the employer. Self-employed consultants have to maintain their own office and provide their own benefits.