McKinsey & Co has warned about 3,000 of the firm’s consultants that their performance was unsatisfactory and would need to improve.
The firm gave these employees a so-called “concerns” rating as part of their performance reviews in the past few months, people familiar with the matter said. With that rating, employees are typically given about three months to show improved performance. If they are unable to do so, the firm might begin counseling some of them to leave the company entirely.
While the proportion of staffers receiving the “concerns” rating is largely in line with past years, the firm’s headcount has swelled so dramatically in the past few years, meaning that the ratings have been handed to far more employees than in prior periods, people familiar with the matter said.
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McKinsey’s headcount has swelled to about 45,000 employees, up 60 percent from the 28,000 employees it had in 2018.
“Our proportion of concerns ratings is consistent with our historical range,” a McKinsey spokesperson said in an e-mailed statement. “It is not an unprecedented year. The performance evaluation process we have today also remains consistent with years past.”
It is the latest sign that the consulting industry is pulling back after the boom times of the COVID-19 pandemic spurred hiring sprees across the industry.
Some of the world’s largest consultancies have said a growing number of clients are shelving longer-term investments as they navigate an uncertain macroeconomic environment, meaning there is less work for their consultants to come in and advise companies on.
For instance, Accenture PLC last year said it would slash 19,000 jobs. Ernst & Young LLP in December last year said it was cutting jobs and delaying start dates for some new hires across the US, while PricewaterhouseCoopers LLP in November last year launched a voluntary redundancy program with the bulk of those cuts aimed at the advisory division.
For its part, McKinsey embarked on a plan to eliminate about 1,400 roles last year. It was an unusual move for the consulting giant, which rarely carries out job cuts in its own ranks.
Instead, underperforming employees in client-facing roles tend to depart after being “counseled to leave” — a phrase that indicates the company recommends that they try to find a different employer.
“A core part of our mission is helping people learn and grow into leaders, whether they stay at McKinsey or continue their careers elsewhere,” the McKinsey spokesperson said in the statement. “This is why we are widely recognized as one of the best places for talent to learn and develop.”
McKinsey said this month that the firm’s 700 senior partners re-elected Bob Sternfels as global managing partner for a second and final three-year term. Last year, Sternfels led McKinsey to a record US$16 billion in revenue.
The consultancy was founded 98 years ago and has grown to employ 30,000 consultants around the world — a figure that includes more than 2,900 partners. The firm has offices in more than 60 countries around the world and has 4,400 active engagements.
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