Too Many Suitors in Action?
Monday, September 29th, 2008An exciting potential natural experiment for the the Too Many Suitors Problem:
The current financial crisis is going to drastically affect the preferences of college seniors looking to go into investment banking and hedge funds. As those companies fail, these prospective workers will likely flock to consulting — a more stable and still incredibly lucrative area — in droves.
There is already evidence for this shift: a friend of mine who works at the Boston Consulting Group was at Harvard last week to do recruiting amongst the class of 2009. Not only did BCG see an incredible spike in attendance at their first recruiting event, but Bain (another firm with better student name-recognition) saw 700 people at their first event! (Remember that Harvard’s class size is about 1600.)
So, with extrinsic factors pushing many, many more applicants into the consulting labor pool, what will happen? Will, as conventional wisdom might lead us to predict, the consulting firms enjoy the much broader pool as giving them more great applicants to choose from?
Or, will the flood of applicants put a strain on recruiting, making companies like Bain more reliant on mechanisms like GPA cut-offs and shorter interviews to pick their incoming class — potentially working against the firms’ abilities to choose the best applicants?
Simply, will the tremendous increase in applicants lead to a worse incoming class of consultants, supporting the Too Many Suitors hypothesis? Time will tell.