Consulting: Why So Many MBAs Do It

Dilbert/consulting

Surely, you’ve heard this one: “How many consultants does it take to change a light bulb?”

One answer: “We don’t know. They never seem to get past the feasibility study.”

Or there is this one: “Three. One to change the bulb, one to document the process and one to coach him on how to conform to the process.”

Or how about this gem: “Six. One to change the bulb and five to tell him how much better they could have done it.”

MORE MBAS FROM TOP SCHOOLS ENTER CONSULTING THAN ANY OTHER INDUSTRY

While consultants surely rival lawyers for the most career jokes, there is no industry or field that attracts more MBA graduates in a given year than consulting. For many, a job at the very top of the consulting value chain, with McKinsey & Co., Bain & Co., and Boston Consulting Group, invariably referred to as M/B/B, is the equivalent of another graduate degree on your resume. The next tier of firms, Deloitte, Accenture, Strategy&, A.T. Kearney, Booz Allen Hamilton, Oliver Wyman and PwC Advisory also are among the most highly regarded MBA employers. Because consulting is little more than the outsourcing of big brains, the field oozes prestige and status, especially at the highest levels.

More than one in three graduating MBAs last year at Kellogg, Tuck, Columbia, MIT, Michigan and Emory landed jobs in the consulting industry. Some 41% of INSEAD’s Class of 2014 headed into the consulting industry, up from 34% a year earlier. And if you looked at the percentages by function—as opposed to industry—MBA hired into consulting roles at both the consulting firms and in corporations is even higher. At MIT Sloan, McKinsey last year hired twice as many MBAs at the largest non-consulting employer at the school, 32 vs. 16 by Amazon, and five of the eight largest employers were all consulting firms. After McKinsey, Bain hired 17 graduates, BCG took away 15, while Deloitte and PwC Advisory both employed nine Sloanies each.

The job offers unparalleled variety, allowing a new recruit to work at different companies and industries, in different functions and locations. The broad exposure to a vast number of business challenges is ideal preparation for nearly any eventual career as an entrepreneur or a corporate solider.

And let’s face it: With standard starting median salaries of $135,000 and median sign-on bonuses of $25,000, the pay-and-benefit packages are among the highest available to freshly minted MBAs. In fact, MBAs who venture into consulting are typically far more likely to get signing bonuses than those in other fields. At Northwestern University’s Kellogg School of Management last year, more than 35% of the grads who landed consulting jobs got sign-on bonuses that ranged from a high of $45,000 to a low of $3,000. The average bonus? $26,619. Consulting was more than three times more likely to pay a sign-on bonus than consumer products, more than six times more likely than health care, and more than twice as likely as financial services.

STARTING MBA PAY PACKAGES IN CONSULTING EXCEED THE AVERAGES AT MOST TOP SCHOOLS

Source: MBA Career Coaches Consulting Career Primer

Source: MBA Career Coaches Consulting Career Primer

Besides, there’s the opportunity to travel, early exposure to C-level executives and big issues, entree to a high-powered network of colleagues and clients, and even outplacement support when you’re ready to take on a new challenge outside the field.

“I believe consulting is the perennial top choice for MBAs because it allows you to delay the question of what you want to be when you grow up while still giving you really valuable skills to apply when you figure that out,” says Angela Guido, founder of MBA Career Coaches. She joined the Boston Consulting Group after earning her MBA in 2004 from the University of Chicago’s Booth School of Business.

“I speak to a lot of clients who enter the MBA explicitly trying to avoid consulting because they think of it as following the herd,” adds Guido, whose firm has produced a free primer for applicants and students who want to take a quick deep dive into the industry. “But this isn’t the right perspective. For many people, consulting truly is the best choice for their first job post-MBA. Think about it: a lot of people want an MBA in the first place to open more doors and expand their horizons. Consulting continues to do that by exposing you to a variety of industries and functions without – in the case of most firms – forcing you to specialize immediately. It gives you the chance to apply what the MBA taught you, continue developing at a rapid rate (consulting has a very steep learning curve), while still opening new doors and better positioning you for other jobs.

  • 2cents

    Definitely depends on the case and the individual too in terms of capability, working style, and life expectations. Pay is pretty standard though at least in the US, and billing doesn’t work in a clock-in clock-out manner.

  • Indian

    The salaries in India will be driven by what others pay in India and PPP. That way, $70K in India is a pretty good deal provided that you stay in India. However, the same company will pay you higher (as high as what market pay) is you are visiting any other country for your work. This holds true for pretty much all the companies- not specific to consulting firms as such.

  • Indian

    I am not sure how MBBs are able to generalize the whole thing. Just like any other company and industry, there would be variations in salary and work life balance. May be the project that you work is pretty cool. However, as per my understanding – the work pressure in generally high in consulting. And that makes sense as well. After all, you have a lot of catch up to do after you have traveled till Thursday. Moreover, you are only getting paid for the work hours that you clock, unlike any industries. So, there’s an incentive for consulting firms for keep consultants on clients payroll as long as they can. I am a MBA but never worked for MBBs. However, I have friends who have and it’s a pretty well known fact for the consulting industry that they pay you good but your work stress is generally high. So, a lot of consultants try to accumulate as much money they can in a short span and search for a calmer life at the later stage of their career/life.

  • Bastion

    If you don’t mind me asking, how did you go about your professional career path? Like in terms of business school and ultimately applying to jobs. I am about to graduate college and I don’t have a ton of experience and I am open to both internships and entry level jobs. I fear I may have to get my MBA sooner than I’d like but I don’t have the relevant experience to get into a good program (nor particularly good grades)

  • Steve

    On the “good” vs. “bad” consulting: Most who say the above are simply envious / jealous that they were not provided the opportunity to work in strategy consulting. Without strategy consultants making strategic plans and making the proper recommendations, implementation cogs like yourself would have nothing to implement. And if you work anywhere near a category management initiative within Deliotte or Accenture, those consultants go to market and provide real value via cost reductions ans value creation. Technology is great for consultants that want the title without making real impacts. You implement IT systems for a living, congratulations you are replaceable by some over-degreed MIS MS Graduate in India. Hell my company does even call it technology consulting, they call it IT Professional Services. Management Consulting is much different and it disappoints me that try hards like yourself try to make your “consulting” seem superior when in reality it is quite the contrary. I don’t remember many CEOs talking about how an IT system implementation grew their bottom line; however, I can think of several that talk about strategy. Don’t listen to this clown above….

  • David__D

    Lol $135k Texas = $1B NY. I live in Houston now (moved from downtown Boston) can confirm :).

  • Shlok

    If you’re an MBA you would know the PPP ratio. So even a salary of 50k in India translates to a 150k salary in US.
    BTW, im an Indian and I chose to do my MBA in US rather than India. Just saying….

  • greek

    1 $ = 65 Rs . 70K $= 45,00,000 Rs. Renault kwid costs Rs 250000 In India . If an Indian service man is getting 70K $, he is freakinn richhh….Dont compare dollars…compare PPP.

  • jd

    1 $ = 65 Rs . 70K $= 45,00,000 Rs. Renault kwid costs Rs 250000 In India . If an Indian service man is getting 70K $, he is freakinn richhh….Dont compare dollars…compare PPP

  • Geeta

    Cuz that much money could buy you anything in India!

  • Geeta

    What about work life balance?

  • MBA2015

    Yes, I received offers at 3 of the firms listed.

  • avivalasvegas

    I completely agree with this. Industry rewards specificity. Consulting wants you to be generic. Unless you’re planning a career in the consulting profession (For your odds of making it, looks at the number of partners vs. consultants), a career in consulting is myopic at best.

  • nothing_to_see_here

    Another issue is the fact that having “a variety of experience and industry” is only an asset when you’re relatively young and early in your career. If you ever want to jump in house to do corp dev or strategy or be a line manager deep industry expertise is incredibly important. So you either have to specialize in an industry early, or you’ll find yourself in a situation where you’re looking at a demotion plus a substantial pay cut when you eventually leave the consulting world.

    The MBB allure definitely is a huge reason why so many folks still try to get into consulting. The prestige of MBB on your resume pretty much will guarantee you at least an interview at any company you choose to apply to later in your career. It’s a gold star that is generic enough to land you a gig in a variety of industries.

    However, my advise to folks in an MBA program now or contemplating an MBA is that if you already know the industry you want to make a career out of, try to get into a large firm in that field instead. The experience, prestige factors, and paycheck is nearly as good, and you get a lot more industry specific learning that will be tremendously valuable down the stretch.

    That’s how it worked for a buddy of mine, who had 7 years of pre-mba experience in tech, and was able to leverage his experience & the MBA to land a job with a huge jump in scope & responsibility. 2 years out of his MBA he’s pulling in 250k+ and working pretty normal hours.

  • Michael Lee

    This has all been in reference to your original statement and you see how your argument has always changed:

    1. Microsoft isn’t hiring many at all these days – Incorrect Statement
    2. Many people got different roles because of massive re-org – isolated example. This isn’t date based – this is anecdotal based. You’re speaking as if this happened to everyone – rather just your classmates.
    3. It was an admission by you that they are risk averse. This is something that is counter to Microsoft’s culture. So they might be brilliant, which is fine. But risk aversion is counter to Microsoft’s culture.

    Culture is more important than strategy,.

  • avivalasvegas

    1) You being hired by Microsoft doesn’t counter my statement.
    2) They are at Microsoft because Microsoft hired them and then accepted the offer, perhaps to cater to their risk aversion?
    3) It is that simple – my classmate was hired for Xbox strategy and is now working at MS Office (and has been looking for another gig for months now). I have another classmate who was hired for a media marketing role and is now working at Bing as a project manager (also trying to find another gig)
    4) They don’t suck. I’ve worked with them on projects and they were brilliant. They were just victims of a terribly timed restructuring at their choice of company.

  • AP

    Yes, I do understand that. I was merely giving an example of how students face a daunting task of paying back their loans (Many > $100,000). Add to that the fact that for many of these students, the currency in their home country is weaker compared to the dollar and that they wouldn’t earn enough to pay back these loans; many of them do plan on working in the US.

    And I am not naive enough to just assume that just because a currency is pegged lower than the US$, it’s a weak one.

  • Michael Lee

    you do realize having a weaker currency than the USD doesn’t mean anything right? It’s just a benchmark ? the Japanese Yen is way weaker than the USD but the cost of products is significantly higher. I think a lot of people have this idea that a currency that’s less than 1 USD, they make an inference that products are aligned to that. It’s sort of the mark of someone that hasn’t traveled very much.

    The FOREX between the HKD and the USD, the HKD is weaker, but it’s pegged although people on post mba packages would probably make just as much if not more. (Much more after tax …)

  • AJ

    Thats the reason why we don’t see many US/EU MBA graduates coming to India to join MBB – the RoI just doesn’t work out. These salaries do work for Indian MBAs though.

  • avivalasvegas

    What you probably don’t know is that many of them did not get the role they were hired for due to the massive re-org. Several of my classmates are miserable doing jobs they would never have recruited (hired for Xbox, working at MS Office etc) for at Microsoft but were too risk averse to give up due to the last minute nature of the re-org.

  • avivalasvegas

    Is it just me or does “lifestyle varies” sound alot like the “results may vary” disclaimers used on products claiming alot?

    The consultants (the genuine ones anyway) do make a valid point. You can get projects that need 50-60 hours a week. Not ideal but a lot better than 80+. The problem is that most other consultants are also vying for these projects, and ultimately what you work on becomes more a question of who you know i.e. have networked with. Somebody’s gotta be pulling the due diligence all nighters..right? I mean…you can’t run a firm without someone telling clients who to fire and who to keep.

    Imagine that…a career that depends more on who you know vs. what you know. Personally, that’s my definition of career harakiri.

  • Alex

    not sure what’s going on, but I’m at MBB and I make more than the average $$ listed here, it’s very standard (and accurate) package, and lifestyle varies based on projects.

  • gerd

    and no one has mentioned before!!!

  • richard-NTTD

    John, is it true that Mckinsey applies different salary in different regions. based on glassdoor, It is an eye opening to see that engagement manager with mckinsey in INDIA receive something around $70k only. why its so low? giving that engagement manager is at least 3 year post- mba.

  • 2cents

    appears McK allots cost of living comparisons to US salary in at least developing countries. Also never thought too much about it before but i guess i shouldn’t be surprised how many posters from India are on this website.

    Anyways don’t get the uproar – all of these schools are US/western EU based, and the substantial majority of hiring from these schools occurs there.

  • AJ

    True! And this too inclusive of bonuses right!

  • AJ

    That math definitely doesn’t work for India!

    A post-MBA associate in MBB gets around or less than USD 40K (at current INR-USD rate). Add to that the bonus of USD 10K. We are @ USD 50K. Engagement Managers get around USD 50-60K + bonus.

  • avivalasvegas

    US M7 B school grad -> MBBD

    Class of 2014 Range was 130-140K base plus a 30K signing bonus.

  • Michael87

    and it is even worse in india. can you believe that mckinsey engagement manager salary is around 4m rupee. something around 70k in dollar !! very strange indeed.

  • Michael Lee

    Microsoft hired 1000 Machs this year. I think globally 150 were MBAs.

  • Michael Lee

    Esuric – MBA entry level is pretty standard. The fact that you used senior consultant suggests that you’re not part of MBB. In fact, I actually feel like based off of all of your comments, my guess is that you either are or were a Deloitte IT consultant, which explains a lot.

  • Doclkk

    I disagree. I received 4 offers in Asia. they all pay global figures.

  • qiuyidio

    You’re right Michael87. I’m talking about US – here, post-MBA salaries start at $140K. I’m not sure why its so much less in Europe… I could ask some of my colleagues but that just seems awkward…

  • qiuyidio

    If we’re talking about post-MBA, MBB offers $140K base STARTING in the US. I believe BCG just went up to $145K base even. If you add on bonus, the total compensation is just below $200K. Are you in some other geography or talking about some other random group?

  • xCel1

    Not sure how that’s strange? Why would someone know the salary in some other random country other than the one they are in?

  • babandrio

    John, this is very interesting. it will be very important investigation to do. id love to see it covered in detail. mckinsey engagement manager in india is just $70k salary ! how come?

  • 2cents

    Alright peanut gallery – you got me

  • 2cents

    Not at all. I don’t work in HR, haven’t worked outside the U.S. nor have I worked in the developing world so the topic has never come up. It appears babandrio is right regarding India though

  • avivalasvegas

    You know that we have classmates who are also at MBB in our network and we exchange notes, right? Mine at MBB are miserable, work weekends and not earning more than $140K base. I wonder what projects you work on?

  • aslan

    hahahahaha spot on. ….

  • tenderX

    ” I don’t know if these change internationally ”
    an MBB consultant does not know about consulting salaries.. pretty strange.

  • babandrio

    i really don’t understand why you go that far. Just look at the glassdoor NOW and see the average salary and compensation for an engagement manager with mckinsey in INDIA. How can you explain it is 4m rupee. .almost equivalent to $70k..plain and simple..its not a game..im just trying to get real view on this issue.

  • 2cents

    Ah you went international. Those are US national salaries that don’t change by location. I don’t know if these change internationally (I’m under the impression they don’t), but to play this game out – London reported associates making 80,000 pounds/year (reported a while back, so I have to believe they would have followed the same growth path in the US but lets leave that aside for now). Exchange USD/pound in 2014 when these salaries would have been set was between 1.65-1.72, which means associates pulled a base salary between $135-$140K. Engagement managers would come out around $175 base. Knowing what the firms paid anecdotally in London as well, the likeliest answer is that the UK just has a fixed exchange based on US salary levels.

    Don’t feel like repeating this exercise for India

  • babandrio

    where? in NYC ;), look again and see INDIA and UK.

  • 2cents

    Glassdoor chief… you’re just reading it wrong. for example, McK – total comp for Associate is $178K with $140K base. Engagement Manager listed as $235K total, $177K base. For arguments sake if that’s average, $250K+ is top performers.

    or if you don’t trust that, chase Wall Street Oasis.

  • babandrio

    very strange that an MBB has a plenty of time to follow comments on an online forums for graduate prospectives rather than working on his/her projects. for salaries and compensations, there are two source of information we have here: one is an anonymous posters, hard to verify, the other is the normal salaries websites such as glassdoor. which one of them do you think has some credibility?

  • 2cents

    Also at an MBB. Find it strange that people in online forums are telling you that you are not making what you are making and that your work-life balance is worse than you think it is…

  • JohnAByrne

    Just look at the latest data: 15 of the top 25 U.S. MBA programs report that the median starting salary for consultants is $135,000, not including sign-on bonuses or other guaranteed bonuses and perks in the first year of employment. You don’t have to go to Harvard, Stanford or Wharton to land the $135K offer, either. Grads from Emory, Michigan, Carnegie Mellon, UCLA, etc., all report getting median bas of $135K to start in consulting. And as several commenters here suggest, this past year the top consulting firms have upped the starting salary rate. So when the new employment reports come in during the fall, we’ll definitely see higher numbers.

    http://poetsandquants.com/2015/07/07/where-the-class-of-2014-went-to-work/

  • mba_alum_consultant

    Absolutely agree on all points in this comment. Would also throw in names like LEK and the new KPMG Strategy group. The war for talent and being on par with each other are holding these firms to the same/increasing salary bands. To your point about “implementation at Deloitte,” I remember going through MBA recruiting a few years ago where we learned that the Human Capital and Tech groups’ offers were $10K less than S&O. Not sure if this is still the case but thought I’d throw it out there.

  • Michael87

    no. it is in usd not pound. in pound it is about 100k or little more. total compensation reach 122k pound. this is based on tens feedback on glassdoor website.. i think it is reliable source.

  • mba_alum_consultant

    Michael87, you and qiuydio are talking about different things. You’re talking salary while qiuyidio is talking about total compensation which I assume includes bonus and perhaps milestone rewards. Additionally, I would wonder if the 166K in London refers to British pounds vs. American dollars; the difference would close significantly if so. Also, as I mentioned in another comment below, there is a wide variance in salaries depending on your graduate level education. Average salaries might include all managers, but qiuyidio’s point is for post-MBA managers with 2-3 years of senior consultant (or equivalent) experience. Again, this goes to the premium on MBA standard offers. Finally, secondments and/or regular employees in other locations like the Indias and Hong Kongs of the world will definitely have a lower salary and total compensation. These vary by region.

  • Michael87

    and in india is different story, engagement manager with mckinsey in india is barely reach $70k !!!

  • Michael87

    Not true, based on Glassdoor , an engagement manager with mckinsey in London has an average 166k salary.

  • MBAcurrent

    do you do spreadsheeting or just outsource them to offshore india ?

  • JohnAByrne

    Thanks for weighing in!

  • qiuyidio

    Whoa, pause! Lots of errors in here.

    I’m at MBB and I’ve worked maybe one Saturday ever… There will be crunch time in projects, but that may only been 1-2 weeks out of every 2-3 month project.

    Also, unless you’re in tech consulting, we don’t ever do implementation, ERP or audits.

    And finally, $250K total compensation isn’t that hard to get to – all you need to do is reach Manager, which is 2-3 years post-MBA.

  • Beavis_Bunghole

    What you’re seeing to some extent is the “New York Premium” in action. Companies have to pay more for their New York . That’s why you’re starting to a see a shift away from NYC to places like Salt Lake City, Denver, and Atlanta.

  • Tobias F

    EY (Ernst & Young), PwC, Deloitte etc have all joined the MBB (McKinsey/Bain/BCG) firms in paying their MBA full-time hires at $140K per annum. That’s pretty standard for East Coast locations, and even then that barely covers loan repayments, rent and living expenses.

    I think someone underbid for your talents, and those of your friends, if they didn’t offer you a starting amount in the same range.

  • SorryBud

    Hate to say it but you got screwed then. I personally know people from top10 school working at one of the top5. Salary is $135k (in freaking Texas! that’s roughly a billion new york dollars). Bonus for early signing was $35k, normal time $25k. Stay 2 years and they pay his 2nd year tuition.

    Source: personal friend/former supervisor who was one of my recs.

  • tenederX

    to add: one aspect is very important, Unlike american market, the exit opportunities in asian markets aren’t that great because companies there don’t pay salaries comparable to western firms, so most consultants trapped into consulting there or go for lower salaries exits.

  • avivalasvegas

    Google/ Apple hire only a handful of students per campus. Microsoft isn’t really hiring many at all these days. Tech isn’t as open to H1B sponsorship as it used to be.

  • International Student

    Amazon is a true savior. I know atleast 3 people from H/S/W who went to Amazon and then got transferred to international locations outside of US as they could not get an H1-B.

  • International Student

    In addititon to consulting and banking, international students have the option of going for the technology industry. Google, Apple, Amazon and Microsoft are willing to sponsor lots of visas.

  • Bagel

    True story.

  • AP

    The sad reality however is that consulting firms and investment banks are perhaps the only viable career choices for international students.

    Most of these international students come from countries which have a weaker currency than the US dollar. Thus, the already high cost of education in the US coupled with a weaker currency back home means that these international students have to work in the US or UK/EU to pay back their loans. And only consulting firms and IBs have the kind of legal infrastructure in place to process their visas. This is the sad reality that one is talking about. I knew a girl at HBS, she got an offer from a very respected education firm in the Bay Area. But they rescinded the offer as they would not be processing her work visa.

    This situation is changing with many tech employers such as Amazon coming into the picture. But the bottom line is that while working at a consulting firm is a goal for many people, most of them don’t have a choice!

  • ReadingIsFundamental

    Not to beat a dead horse but those salaries are spot on. I would even argue that the average MBA salary is higher now- given some members of MBB have recently increased their starting salaries to ~$147 to be more competitive- as firms are trying to stay competitive in the talent war. Maybe Esuric works in technology at Accenture or implementation at Deloitte, at which case these salaries would seem highly inflated but the article is referring to “Strategy Consultants” who typically come from the top of top schools and can demand these salaries. I don’t know anyone that works in strategy (for MBB, Strategy&, Deloitte, PWC, OW, ATK, Accenture, EY, etc.) with a top 20 MBA that makes anything less than $135k.

  • 2cents

    Blind leading the blind in this comment section… The article amalgamates unique qualities of different firms as a kind of generic consulting piece. If you know exactly what you want out of an MBA and it’s not consulting, of course chase that horse.

    If you don’t, or you want a consulting career, then the above is right, at least at the MBB level. Salary for 2015 is actually up a decent bit, but the 135-147 range plus $25K gets to the right range for all hires, not just summers. Staffing models, and therefore hours as avivalasvegas mention before, vary significantly by firm from local to national. This means some firms work 50-60hrs a week and some near 100hrs, but give you the broadest sets of opportunities. The MBB strategically are human capital focused; they not only focus on personal development but also have HR teams devoted to finding you exit opportunities you want if you decide to leave the company. Finally all three firms have decided to put $$ behind their recommendations. MCK is expanding their implementation group rapidly to take on Deloitte’s cash cow, Bain buys into deals it recommends, and BCG has a profit share option for many of its recommendations rather than 100% upfront fee.

    If you’re thinking about it as a career choice, ignore these boards and do your own research. You can find out a fair deal easily enough online. As for external prestige as on commenter mentioned – It’s possible it’s a self-contained industry, but the opportunities on exit seem to indicate otherwise.

  • avivalasvegas

    Love Tuck but I think its a matter of sheer numbers being sent into the profession

  • Tuckie

    Odd that you didn’t include Tuck on this list as over 20% of the class of 2014 went to MBB…I believe the final number was about 60 MBAs going into the three firms

  • Striderite33

    Info on Tuck?

  • avivalasvegas

    My advice to any internship/ full time consulting hopefuls – Pause. Delete all the false propaganda fed to you and THINK
    Admittedly, I too was seduced by the power of these firms promising it all. Work life balance, the chance to interact with C level management, travel that put the x in explorer , cross industrial expertise and money that flowed from everywhere. If McKinsey said it, it must be true after all. Right?
    Wrong!
    In reality, there is no work life balance – most consulting recruits work Saturdays and up to 50% of Sundays. Interactions with C-level management are typically them yelling at you for your firms failure to deliver or disappointment in the PowerPoint (and associated invoice) you dropped at their desk and travel usually means flying from one airport to another in a comatose state due to sheer exhaustion, being hung-over thanks to “networking” and a total lack of sleep. Only things were partially true- you do work in a number of industries but only doing the work that most companies don’t want to do themselves. ERP implementations, audits, diligence etc. You also get a great paycheck – but few ever get to the promised 250k+ wage. Most give up and run after a year or two, earning 130-145k but never getting to enjoy it.
    A legendary faculty member told me that a top firm used to host baking events on campus to address the belief that recruits don’t have a work life balance. This was quickly shut down due to the false advertising nature of the event. In another example, a close friend and classmate was offered a $1000 bottle of scotch (he had let on that he enjoyed a glass of single malt) by a firm’s partner if signed his full time offer at that bar. My friend left that evening…mortified.
    I learnt, through several, formal and informational interviews over my two years that consulting is meant for two types of people 1) existing consultants 2) candidates with no career goals or clear objectives who can be easily molded by these firms into drones. (Only sad exception to this were the international students who accept their offers due to the impossible odds of securing employment in the US. They have no choice but to make consulting or banking their only career options).
    In essence, I was setting myself up to mortgage my passion for money that I would never get to enjoy. Fortunately, I stuck to my guns and ended up in the profession I came to business school for. I leveraged my passion and past experience and now earn 1.5-2X what an equivalent consultant does. I have a work life balance (never worked a weekend), exposure to the top of my management chain in my Fortune 30 company and get to see the difference my work has made every day.
    Ultimately, there is a real danger around being paid a lot to know too little about too much. Think about this before you decide on this path.

  • mba_alum_consultant

    Esuric, that’s the whole point of the article as well as the end of Cornholio’s post. MBAs always come in at a senior consultant or equivalent level, which varies by companies (senior associate, associate, whichever), but regardless, it’s the MBA entry level. The starting salary bands are indeed $135K to $147K with standard signing bonus of $25K or more if you interned. To Cornholio’s point and maybe yours, if you start as an analyst/consultant out of undergrad, you don’t “level up” to the MBA salary band even if you have the same level, it’s just the way it is. Also, not all graduate degrees are treated the same. MDs, PhDs, and JDs might quality for the same band, but something like an MPH wouldn’t. The MBA offers are very standard across basically any top 20 MBA program because none of the firms want to appear below par to prospective new hires; hiring is a 2 way street. Finally, finance related jobs don’t necessarily value MBAs less these days; it’s just that the recent shifts in how finance has been perceived only attracts the determine, hardcore finance-type MBAs. Those who used to dabble in finance are more attracted by consulting, tech, startups, healthcare, etc. Specifically about PE firms and hedge funds, they tend to only hire from HBS and GSB very exclusively. It’s not that they don’t hire MBAs or MBAs aren’t interested, but there’s a specific focus from the KKRs, TPGs, Carlyles, etc. of that world. I’m sure someone will bring up a single example as an exception, but I’m going for the overwhelming average here.

  • Cornholio

    John:
    Good article that is factually accurate – hopefully it spurs a good debate. Here are my two cents:

    My Background: I worked at Deloitte for four years in system integration consulting straight out of college – in roles ranging from developer to project management. Although it was not pure strategy consulting (like what MBB and Deloitte S&O/Strategy& do) I did work on one S&O project (telecom industry) during those four years and also worked with lots of S&O people in various capacities – project and non-project. I did well, received one early promotion, and am starting at Chicago-Booth in the fall.

    The Work Itself: Consulting comes in many shapes and sizes. I like to think that the type of consulting I did (system integration) was “good” consulting in that we were actually building a technological product for our client that they could not build on their own. They needed technical expertise and project management expertise that they did not have, but that we (usually) did.

    General Management consulting (i.e. MBB or Deloitte S&O) is what I consider “bad” consulting in that those consultants get paid a ton for very little value add – generally the final deliverable is a pretty PowerPoint presentation that contains some kind of strategy that is generally logistically impossible to execute in practice. The strategy consultants who are doing the actual “consulting” (not the partner who sells the work) generally have no experience in the client industry and that makes it extremely difficult to create an analysis or strategy that is novel or worth pursuing (trolls will argue that at Deloitte relative to MBB this may be more likely to happen due to intellectual horsepower differences, but my friends at MBB firms mostly feel the same way). Would love to get some MBB perspective on this comments section though.

    Additionally, what I think people who are entering consulting from non-consulting/finance backgrounds do not quite realize about consulting is that as you move up in rank your job becomes more and more about sales. At the top firms, there is an extraordinary pressure for partners and principals to sell work and sell work fast or else you are fired. Some of the best Partners at Deloitte in terms of sales are downright horrible at managing the actual delivery, but they can sell you the shoes off your feet. It’s not like there is a Yelp for consulting where you can read about someone’s experiences. A lot of people exit the firm because they realize that they aren’t going to be great salespeople or that the selling involves too much bullshit to be worth the
    salary. If I had a nickel for every truly qualified consulting practitioner who is pushed out by a less qualified person who can sell better, I’d probably have a few dollars. Not an exaggeration.

    Salaries: The MBA salaries listed in this article seem about right. At Deloitte, campus hires from undergrad were always behind the MBAs and it drove people nuts. It was not uncommon to find senior consultants who had MBA’s making more than managers (which is the next level above Senior Consultant) who grew up in the firm but did not have MBAs.

    Exit Opportunities: The network you make will be a determinant of how good your exit ops are. Obviously the more prestigious the firm, the higher the likelihood that someone in that network has a job or can connect you to a job you are interested in. It is really on you though to make that happen – it’s not an automatic thing.

  • delan

    can you please provide some evidence? have you received any offer yourself? this issue needs to be discussed because all figures in the emploment reports are self reporting. means can’t be verified.

  • Esuric

    I work at one of the companies you listed and I don’t know anyone that makes that sort of starting salary. Maybe if they come in as a senior consultant.

  • MBA2015

    These salaries are spot on for the major firms (MBB+Deloitte, Accenture, PWC, Strategy&, EY, BAH,even boutiques like Chartis). They all pay pretty much the exact same thing; there’s a band between 135K up to 147K. The article is correct, at least for the pre-MBA and MBA levels.

  • delan

    How can you prove that salaries aren’t that high when multiple schools report them in their career report?!

  • Esuric

    So consulting actually isn’t prestigious at all. The average person has no idea what a consultant is or what it does. They think it’s a fake profession. Next, the article grossly overstates starting salaries. You’re terribly misguided to expect $135,000 + bonus starting. I work in consulting and I know many consultants. Very few start out with a salary this high. Beyond that, the article is deceptive when it highlights the “well-defined” consulting career path. Manager’s rarely make $250,000 and less than 1% ever make it to principal, much less to partner. Vast majority of people get fired at the first tier in the ladder.

    The real reason why consulting is becoming increasingly popular among MBA’s is because the degree is losing traction in other areas, such as PE, IM, and other finance professions, that now require more hard, tangible skills. As a default, MBAs are transitioning to consulting, where soft skills (communication ability and power point skills) are required. Also, in recent times, consulting has been struggling. It has been losing ground to various advisory shops that tend to be a lot cheaper.