Consulting Pay: What Business Students Earned In 2021

Bain consultants in the New York City home office. Courtesy photo

FORGET THE UNPAID INTERNSHIP

Indeed, undergraduates and Master’s degree holders are an increasingly popular talent source in the field. Namaan Mian observes that many consulting firms “are expanding their recruiting efforts beyond traditional recruiting hotbeds.” He points to McKinsey, where just 19% of last year’s hiring originated from MBA programs. Mian also notes that McKinsey recruited business analysts at over 370 universities. “I expect firms to continue to hire a record number of candidates coming from non-MBA master’s programs, PhD programs, and from industry,” he adds.

What types of skills are consulting firms seeking? Mian cautions that technical skills are only one consideration when it comes to hiring decisions for generalist strategy roles. However, there are a few areas that consulting firms are increasing coveting, Mian adds. “Showcasing Excel competency and experience in other programs like Tableau, STATA, R, and Python is helpful.”

The best time to exhibit these skills is during the summer internship. Make no mistake: consulting firms roll out the red carpet for their extended stay guests. Bain & Company, for example, pay undergrad interns $19,038 for a summer’s worth of work (the highest in the MBB). Strategy& pays the same group $48 an hour, while PwC goes as high as $39 an hour (plus a $3,000 signing bonus). Among MBAs, McKinsey pays $33,750, a shade higher than either Bain or BCG. KPMG and West Monroe interns earn $66 and $65 an hour respectively, with KPMG going as high as $99 an hour for overtime. At the same time, EY Parthenon and IQVIA Consulting Services tack on a $5,000 sign on bonus to their intern package.

Deloitte photo

A LOOK AT CAREER PAY

Of course, consulting pay brings certain caveats. Take performance bonuses. To hit the ceiling, hires must rank among the top 5%-10% of all performers. Hence, many consultants earn half of the max amount according to Management Consulted. Relocation reimbursement is also driven by the distance from an office to the university, not a hire’s hometown. In addition, signing bonus may be spaced out in payments rather than delivered in a lump sum. While the bases at some firms vary by location, others tender a flat rate. In other words, cost of living can impact take home pay depending on company location and philosophy.

Pay involves more than just first-year compensation, however. That’s why Management Consulted urges candidates to look closely at bread-and-butter base pay. For example, MBA and PhD chire working for a MBB should be making $175K in base in their first year after graduation, which is supplemented by $30K in signing bonus and up to $45K in performance bonus. From there, these MBAs should expect a 10%-20% bump in base pay and performance bonus — provided they are high performers who aren’t subject to many firms’ ‘up-or-out’ ethos.”  That means moving into a management or project leadership role in their 2nd and 3rd years, which translates to $220K-$240K in base and potentially $100K-$140K in performance bonus. Over the next five decade, the MBA trek involves climbing to senior manager, associate principal, junior partner, principal, senior partner, and director. Over that time, annual base rises from $250K to $700K, as yearly performance bonus advances from $150K-$500K.

In other words, signing bonuses and tuition reimbursements are nice incentives, but they don’t measure up to the long-term benefits of cold hard cash. Take the difference between an MBA starting at EY ($165K) and Deloitte ($135K). If both consistently averaged a 15% increase over five years on their base, the gap between their base pays would grow to over $52K annually. Over that span, the EY consultant will have earned nearly $211K more — and that excludes performance bonuses. The difference is even more pronounced between MBA hired and Bachelor’s degree hires. At BCG, the former starts at $175K with the latter making $100K. In five years, using the same consistent 15% increase, MBA base rockets to $306K, while a Bachelor’s (or Master’s) degree holder pulls down $175K. That’s a five year difference of $505K — all the more incentive to pursue an MBA.

McKinsey consultants (Sherri, Sydney, and Ashley) in the New York City office

FINANCE AND TECH AT THE DOORSTEP

It also pays to stay in a consulting for as long as possible. The reason? Management Consulted research shows that a consultant can expect a 12%-20% bump in pay when they take the off-ramp to positions outside consulting. In other words, consultants enjoy a ‘can’t lose’ situation where their experience often results in a position with higher pay and greater leadership opportunities.

Overall, consulting pay and growth eclipses most industries, particularly with performance bonuses often making up differences in base pay. Does that mean that Wall Street and Silicon Valley can’t give consulting firms a run in recruiting? The allure can be strong, but consulting still provides new graduates with greater responsibilities sooner. That’s not the only benefit, adds Namaan Mian.

“Overall, consulting salaries are highly competitive compared to tech and in-house consulting. One notable exception is finance, where salaries are higher but work-life balance is often worse. Tech firms often offer higher base salaries but the roles are more siloed and the promotion trajectory is slower. Consulting continues to offer faster promotion cycles, broader industry exposure, and a better path to business leadership than these other industries.”

For individual company and career pay and benefits data from Management Consulted, click here.

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