As the banking industry struggles, many MBA job seekers are considering switching their sights

With the banking industry in crisis, many job-seeking MBAs—especially those who once dreamed of lucrative careers in investment banking—are rushing to broaden their options by applying to consulting firms. And while it means more competition for jobs in that sector, for the firms doing the hiring, it means a more robust crop of candidates to choose from.

Turnout at campus presentations this fall by consulting firms is up from last year, recruiters say. "We've seen attendance double at some campus venues, even people sitting on the floor," said Kermit King, a senior partner who heads recruiting in the Americas for Boston Consulting Group. "We think this reflects both the relative attractiveness of consulting as an industry and the relative strength of BCG within the industry in these tough times."

Varied Backgrounds

Consulting firms have historically shared talent with investment banks because the two fields demand many of the same personal attributes: analytical skills, quantitative ability, and a strong personality. However, some key differences exist between prototypical bankers and consultants. "From what I understand about the big financial firms, they do look for real previous banking experience, whereas we look for a variety of backgrounds and skill sets," said Nikki Rath, the senior manager of campus recruiting and diversity initiatives at Booz & Co.. "We have a lot more nontraditional people who have run dance companies and who have been actresses and athletes—they're all different aspects that hold the capability set."

But the nuanced differences between bankers and consultants aren't stopping would-be bankers from crossing over during this fickle job-application season, especially when the future of individual companies is by no means certain. Rath said she has encountered a spike in candidates who spent a summer working at Goldman Sachs (GS) or had an offer at Wachovia (WB), for instance. "We have definitely seen an increase in résumés that had a lot of banking on them," Rath said.

Jackie Wilbur, director of the career development office at Massachusetts Institute of Technology's Sloan School of Management reported increased interest in consulting jobs among students. Attendance levels at two firms' career presentations were up 20% from last year. Wilbur also says 20% more second-year students will be applying for strategic consulting jobs than last year.

Sets for a Long Slog

Typical of those looking into consulting is Kris Ter-Ghazaryan, a second-year at Northeastern University's College of Business & Administration, who said the job situation is worrisome. She's still seeing banking job postings online, but the daily news reports indicate something different—job cuts. As a result, she is looking into consulting for companies going through reorganization, a niche she thinks will grow in response to structural changes in the economy.

"I'm not nervous about getting a job in general," Ter-Ghazaryan said. "But I know it will take a lot more effort right now. I'll have to do a lot more work and much more networking than if things were better in the economy."

Advisers at career services are bracing their students for what is an unpredictable job hunting season at best. Roxanne Hori, assistant dean and director of the career management center at Northwestern's Kellogg School of Management, said speakers at a convocation for second-year students explained the realities of today's job market. "It was pretty sobering because it was right on the heels of the Lehman announcement (BusinessWeek.com, 9/17/08)," Hori said. "I had a number of students that said they appreciated that we were so honest with them so that they knew what they were walking into."

Heightened Interest

Hori said she has had many conversations with former bankers who now consider consulting an option but urges them to thoroughly prepare for interviews. "We try to filter out the people who thought [consulting] would be an easy alternative. The message we send is: If you don't mind being rejected, interview away."

At Katzenbach Partners, a consulting firm of 150 people with a small entering class, recruiters also sense more interest among top candidates. Both the attendance at campus presentations and the number of unsolicited e-mails that land in recruiters' in-boxes are up. This means students have to spend more time making their stories and arguments for switching industries more compelling, according to Kristen Clemmer, director of recruiting.

"We have been very open to seeing those types of candidates," Clemmer said of the banking types. "I notice at the beginning of the recruiting cycle that certain candidates have figured out a way to tell their story in a more compelling way."

Uptick in Crossovers

Consulting firms say it's still too early in the recruiting season to make definitive statements, but King said that he sensed more overlap with investment banks than usual in applications. "We see candidates moving between consulting and finance in every stage of the business cycle, but there is an uptick in crossover applications."

If there's any good news in all this, it's that the crisis is occurring early in the recruiting cycle so second-year MBA students in the midst of recruiting have time to weigh their options and ride out the financial storm, said Al Cotrone, director of career services at the University of Michigan Ross School of Business. "If there is a silver lining in this cloud, the timing of this means that students could consider other options." Cotrone said.

In the meantime, consulting firms are the beneficiaries, although they have more difficult decisions to make and more applicants to choose from. "We are in a luxurious position in that we do have a lot of great candidates coming to us," Katzenbach's Clemmer said. Such is also the case at Booz, where recruiter Rath says the company is in a position to acquire ex-bankers with "great strengths and superstar talent."

But just because banking is struggling doesn't mean all students are ready to wave white flags. Many of the want-to-be bankers plan to stay put, without plans to flee to consulting firms or elsewhere, Michigan's Cotrone said. "They're hearing the opportunities will still be there," he said. "They understand pretty clearly that there's always going to be a financial industry, even if it might look different than it did three weeks ago."

Teichman is a reporting intern at BusinessWeek.