McKinsey & Co. has notified approximately 3,000 of its consultants that their performance is unsatisfactory and requires improvement.
These consultants were assigned a “concerns” rating during recent performance evaluations, granting them a three-month period to demonstrate enhanced performance. Failure to do so may result in the firm counseling some employees to leave.
Although the proportion of staff receiving “concerns” ratings aligns with previous years, the significant increase in the firm’s headcount in recent years has led to a greater number of employees receiving such ratings.
According to sources familiar with the matter, McKinsey’s headcount has surged to around 45,000 employees, a 60% increase from 2018. Despite this growth, a McKinsey spokesperson maintains that the proportion of “concerns” ratings remains consistent with historical trends, emphasizing that this is not an unprecedented year.
This development reflects broader trends in the consulting industry, which is scaling back after the pandemic-induced hiring surge. Major consultancies have noted a rise in clients deferring long-term investments due to macroeconomic uncertainties, resulting in reduced demand for consulting services.
For example, Accenture Plc announced last year its intention to cut 19,000 positions. In December, Ernst & Young LLP revealed plans to reduce staff and postpone start dates for some new hires across the United States. Similarly, PricewaterhouseCoopers LLP launched a voluntary redundancy program in November, primarily targeting its advisory division.
In contrast, McKinsey took steps to eliminate approximately 1,400 roles last year, a departure from its typical approach of rarely implementing internal job cuts. Instead, employees in client-facing roles who underperform are usually encouraged to seek opportunities elsewhere.
According to a McKinsey spokesperson, nurturing talent development is integral to their mission, whether individuals choose to remain with the firm or pursue careers elsewhere. This commitment is a key factor in McKinsey’s reputation as a leading environment for talent growth and development.
This month, McKinsey announced the reelection of Bob Sternfels as global managing partner for a second and final three-year term. Sternfels led McKinsey to achieve a record revenue of $16 billion last year.
Founded 98 years ago, McKinsey has expanded to employ 30,000 consultants worldwide, including over 2,900 partners. With offices in more than 60 countries, the firm is currently engaged in 4,400 active projects.
McKinsey’s spokesperson emphasized the firm’s steadfast commitment to maintaining high performance standards and attracting exceptional talent, ensuring they deliver exceptional support to clients while providing distinguished leadership and mentorship opportunities for their employees.
