[mettamage]

As I'm practicing consulting cases right now for an MBB interview, my standard question to reducing company costs is: can we reduce labor costs by lowering their wage? Ah, they're unionized. Ok, let's look at another cost saving strategy that does not involve labor.

The first time I learned this I was shocked that this is a standard question in case practice for strategy/implementation consultants. Now I'm happy that I know this is how strategy/implementation consultants think. It kind of feels like learning to defend against economic exploits by coming up with them yourself (a similar thing occurs with security when one learns ethical hacking).

[arethuza]

I remember reading about one large consulting form whose answer was always "lay off 25% of your staff" regardless of what the question was.

Of course, companies would have to pay a huge amount to get that answer - but it was always the same answer.

This was from the book "Rip-Off":

https://www.leadershipreview.net/business-management-consult...

[hectormalot]

That’s not how I experienced cases.

There’s no standard question to cut labor cost by X%. One of the things in the case interview is how structured you approach problems. If that problem turns out to be how to reduce cost, one possible approach is to go over all the major costs and ask if/how you could reduce those.

Yes: For labor the potential answer could be (1) paying people less ($/hr) and/or (2) doing the same work with less people (automation, lean). Exploring the option does not mean it’s a desired path. (Eg perhaps the company in the case is already below market wages and has a retention problem)