In an uncertain world, one thing, at least, remains true: Management consultants make bank.
In 2016, top consulting firms experienced revenue growth of between 7% and 13%, according to newly released data from Management Consulted, a “leading resource on all things consulting” based in Redding, California — and that meant a big-time rise in salaries, between 4% and 5%, even as firms ramped up hiring and the Great Recession faded further in the rearview.
Even during the recession, says Namaan Mian, Management Consulted’s operations manager, management consulting firms never cut back on salaries — they just hired fewer people. In other words, at least since 2011 when MC began compiling the data, it’s never been a bad time to get hired at a top consulting firm.
“Salaries have been more than just creeping upward,” says Mian, whose company gathers data from industry insiders, clients, and readers. “The 4% to 5% rise is the biggest year-over-year increase we’ve seen since 2011. As the economy has picked up growth, these Fortune 100, 500, 1,000 companies that take advantage of the services that consulting firms offer, they’ve had more cash flow, more capital to invest in consultants. And that means that these consulting firms have to hire more people and are starting more projects.”
BEST BASE: PARTHENON-EY. BEST TOTAL: ACCENTURE
Consulting, of course, remains one of the most popular career choices for undergraduate business majors. At Washington University’s Olin School of Business, recently ranked by Poets&Quants the best undergraduate business school in the U.S., 21% of the Class of 2016 went into consulting. At Wharton and the University of Michigan’s Ross School, 22% of last year’s class accepted jobs with consulting firms (see Where Biz Undergrads Go To Work). Clearly, one reason for the industry’s popularity is pay.
For newly graduated business students, the top firms for base salary in the first year after graduation are Parthenon-EY, which offers $90,000, Accenture ($80,000 to $85,000), Strategy& ($85,000), BCG ($84,000), Bain ($83,500), and McKinsey ($83,000). But with a $10,000 signing bonus and up to $8,500 as a performance bonus, Accenture has the biggest total package of $103,500 — and that’s not even counting the $5,000 maximum for relocation, 6% match for 401k, and 15% discount on Accenture stock the firm offers. (See all firms’ compensation data on pages 2 and 3 of this story.)
That’s right. Straight out of school and that four-year degree could be earning you upward of $100,000.
“It’s crazy,” Mian says of the huge salaries at top firms. “But for the cream of the crop, it’s an even tougher job to get into these firms and they’ve made sure the payoff is worth it — because they knew they were getting the best of the best.
“Parthenon-EY has had a big focus on trying to attract top talent. If you look at Bain or BCG, that base salary blows them out of the water. What they’re trying to do is really establish themselves as a top-tier strategy practice, and they’ve got a great reputation in the consulting world. But with bonuses and other incentives, other firms are offering more in total compensation. Accenture is offering more than $100,000, and that’s just out of this world.”
DIGITAL EXPANSION & STIFF COMPETITION FOR TALENT
Management Consulted (MC) has two main sources for its data: First and foremost, Mian says, “we work with thousands of private clients a year, and when they land offers they are gracious enough to come back and share with us the details of their offer, what firm, what position, what office, and we guarantee their anonymity. We’ve got hundreds and thousands of data points for all these different firms and we’ve compiled them.” In addition, the company works with “friends inside firms” who help shed light on cost structure, bonus structure, and other details.
MC attributes the boom in revenue at consulting firms to increased demand for digital consulting services, resulting in widespread recruitment of data scientists and engineers as firms develop their digital practices. Mian says the rise in salaries has come about for several reasons, chief among them competition for the best talent with New York and Silicon Valley. “All of those factors together are kind of a perfect storm for those who manage to get an offer in consulting,” he tells Poets&Quants.
The good news extends across the landscape for undergrads and interns as well as MBAs, Mian says. “We’ve fully thrown off the shackles of the Great Recession,” he says, adding that MC’s statistics are combined growth numbers for MBAs and those with undergraduate degrees. “Undergrad numbers are rising at just about the same rate as MBA numbers are,” Mian says.
COMPENSATION RISES FOR INTERNS, TOO
There are caveats to the rosy outlook. Mian says when it comes to bonuses, only the top 5% to 10% of employees receive the maximum amount; you’re more likely to get half that, and if things aren’t going well — if you’re what they call a “poor performer” — you’ll only get a small bonus, if any. Also, some bonuses, such as signing and relocation bonuses, can be meted out over years.
But there’s no question that revenue and salaries at top management consulting firms are on a precipitous rise — and nearly double, or in some cases more, if you get your MBA. (Think that’s impressive? MC shows that consultants who leave their firms to take on banking or trading roles can increase their pay by 50%; those joining corporate America can see 10% to 20% bumps in compensation — while probably working less.)
The picture is bright for interns, too. Oliver Wyman offers $11,750 plus a $2,500 signing bonus for nine weeks, while McKinsey, Bain, and BCG all offer more than $14,000 for a 10-week summer. A.T. Kearney, L.E.K., and ZS Associates each offer $12,000.
‘DEFINITELY A ROSY OUTLOOK’
While the data compiled by MC shows salaries across the U.S. are typically flat regardless of location — with the exception of San Francisco, where they are slightly higher — it’s evident that salaries in general are much higher in the U.S. than internationally, Mian says.
The reason? “Especially in the U.S., there’s a lot more competition,” Mian says. “These firms are competing with Wall Street and Silicon Valley, and so you’ve got to keep up compensation-wise. Most of these firms are U.S.-based, so their heaviest presence is in the U.S. and the average can get skewed to the higher side because a lot of these positions are the U.S. office.”
And even though they are paying more, with revenue outpacing salaries, Mian notes, “these firms are still pocketing more money every year. So they can well afford to hire more people at higher base salaries. I encourage everybody, if you want to pursue a career in business and leadership, this is a great training ground. It’s definitely a rosy outlook.”
See pages 2 and 3 for salaries at each of the top firms, as well as internship salaries.