Public Equity? HKS debates the public/private sector question
by Ben Branham & Nik Steinberg on March 19, 2008 in HKS News, News
Ann Gurucharri (MPP2) is the last person you would expect to apply for a consulting job. Before coming to the Kennedy School, she worked with victims of domestic violence in Central America and Chicago, and she currently co-chairs the school’s Human Rights Professional Interest Council.
But last December, she was one of the scores of students who applied to work for McKinsey and Co., a management consulting firm, which, in recent years has expanded its recruitment of what it calls “Advanced Professional Degree” candidates, otherwise known as non-MBAs.
“It’s really important to me to get mentorship and management experience,” Gurucharri said, “that’s my number one priority. I could try to work in city government, but there is no guarantee that I’d get the same management experience I’d get somewhere like McKinsey.”
Gurucharri is not alone. As increasing numbers of HKS graduates head to the private sector, students, administrators and faculty are engaging in a growing debate over whether the school is fulfilling its public service mission, and where individuals can have the greatest influence in shaping policy.
Recent data suggests a growing proportion of HKS grads heading to the private sector. According to a survey conducted by the Office of Career Advancement (OCA) last September, 41 percent of 2007 graduates reported accepting employment in the private sector, up slightly from 40 percent among ‘06 graduates and 33 percent among ‘05 graduates. In 2001, prior to a temporary spike in the proportion of students who took public sector jobs following the 9/11 terrorist attacks, the percentage going to the private sector was less than 30.
Dean Ellwood attributes the trend to the increasingly stark wage gap between the two sectors, the perception that individuals can rise faster in the private sector, and the more aggressive, better-timed recruiting efforts of private firms.
Despite these advantages, Ellwood says, there is something that graduates entering the private sector miss: the reward of making an impact that matters in people’s lives.
But sometimes the frustrations of working in a public sector bureaucracy make that proposition less attractive, students said.
Matt McClelland (MPP2) came to HKS with the goal of finding a job in public sector consulting for governments. But he said, “the more I read, the more I learned, the more it seemed to me that there was more economic dynamism and growth in the private sector, in developing countries in particular. Things might actually happen. You might actually see a visible impact.”
After working in Botswana last summer on a public-sector project intended to facilitate regional and international trade, McClleland accepted a job last semester with McKinsey’s Philadelphia office.
Many like McClelland point to the growing social sector and government work being done by McKinsey and other firms as a way of affecting real policy change.
Ellwood, however, thinks the chances of this are rare. “If you do consulting or other work for government [as a contractor], the odds that you affect large-scale policy change are very, very small. Major, serious policy work is done internally.”
Jeff Ginsburg (MPP2) agrees, arguing that no matter how you look at it, the missions of public and private sector are fundamentally different.
“The issue is the accountability of whom you work for,” he said. “When you’re at a private company, that’s your shareholders. That’s an important distinction.”
Ginsburg, who chairs KSSG’s Committee on Public Service-created last fall to asses the HKS Loan Repayment Assistance Program and the declining number of students entering the public sector-has spent the year studying data students’ choices after graduation and trying to come up with ways to reverse the trend.
The problem, Ginsburg contends, is not just that so many graduates are entering the private sector, but that they are staying there, referring to data that shows 64 percent of those who take a private sector job after graduation remain there after five years. That number drops to 61 percent after ten years.
To Joshua Wright, MPP2, who last fall led HKS’s Consulting Club, these numbers may not be what’s most important.
“The question of ‘Is it private sector or is it public sector?’ can be a distraction,” Wright said. “Students come here because they are asking the hard questions and they won’t accept easy answers. … The hardest question of all may be, ‘How can I make the world a better place?’ And ‘the government’ isn’t always the answer.”
Sandy Hessler, Assistant Dean for Professional Development and Director of OCA, sees part of her job as dispelling misperceptions about the public-private sector divide.
“The attitude that the private sector works and the public sector is broken is a tragedy,” Hessler said, adding that the stereotype is fueled in part by the prestige attached to the high paid, highly competitive positions offered by consulting firms.
“Our focus has to be how do we break through the clutter to show students what those opportunities are,” she said. “McKinsey and Bain are recruiting machines. The public sector doesn’t have those resources.”
To compensate, sometimes it takes a little tough love. When Hessler encounters students leaning toward the private sector, she questions them. “I push back hard and say, ‘Let’s think about why you want to do that and what other options there are.’”
Ellwood acknowledges that private and public salaries are “widely out of line” and says he has made his top priority to raise money for public service fellowships. “I absolutely want to ensure that no one is going into the private sector to primarily pay off debt,” he said.
For Joshua Wright, though, his job decision has come down to something more fundamental than recruitment schedules, student debt, salary or the potential to rise quickly.
“For me personally, it’s very much about public impact or public good,” he said, as opposed to public service. “I was drawn to an organization that could speak to my values.”
After extensively pursuing consulting opportunities, Wright decided those values were best met by the Federal Reserve Bank, where he has accepted a job–and a lower salary than other offers he received–beginning this summer.
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