Well, that didn’t long. Little more than a year after a McKinsey partner took over the deanship of the University of Virginia’s Darden School of Business, consulting has not only become the single hottest industry at the school. The percentage of MBAs who accepted jobs in the field hit a new record of 38%, nearly double consulting’s draw at Darden five years ago and up nine full percentage points from a year earlier.
All three of this year’s top MBA employers in 2016 were consulting firms and six of the top eight employers are consulting shops. Boston Consulting Group led all hirers, landing 18 grads this year, followed by Dean Scott Beardsley former employer, McKinsey & Co., which matched last year’s Darden haul of 14 MBAs that had made McKinsey the school’s top employer in 2015. PwC, including Strategy&, hired 13 grads, while Accenture Strategy took away ten. The only spoiler to a Top Five consulting blowout was Microsoft, which employed 11 MBAs.
For a school that only graduates a class of 326, those are significant volumes of hires. The Big Three of consulting alone, including Bain & Co. which hired nine grads, took away 14% of the Class of 2016, once you account for the 296 grads who actually sought employment. Darden now sends a higher percentage of its grads into consulting than Northwestern University’s Kellogg School of Management (33%) or Dartmouth College’s Tuck School of Business (36%), traditionally two of the biggest suppliers of elite consulting talent.
AVERAGE STARTING SALARIES IN CONSULTING WERE HIGHEST OF ANY INDUSTRY
Beardsley, who spent 26 years at McKinsey and speaks highly of his experience as a big league global consultant, has got to be pleased. Elite consulting firms often pay the highest starting salaries to MBAs, outside of hedge funds, private equity firms and venture capital outfits, who hire only a fraction of MBA graduates compared to the major global players in consulting. Darden’s consulting hires averaged salaries of $135,771, higher than any other industry and nearly $10,000 more in base than the 18% of the class that went into investment banking.
The shift toward consulting helped Darden see a 2.5% rise in average salaries to $122,806 in 2016, up from $119,819 a year earlier. Average sign-on bonuses rose 5.9% to $31,370, from $29,634 in 2015.
Overall, total median compensation, adjusted for the percentage of graduates receiving bonuses, came to $150,688, up slightly from last year’s $149,479. That total pay number puts Darden in very elite company. Only Stanford’s Graduate School of Business ($179,346) and Harvard Business School ($163,827) have thus far reported higher totals. Michigan’s Ross School ($150,606) is right behind Darden, followed by Wharton ($148,892) and Columbia ($147,000).
JOB OFFER RATES FALL AT GRADUATION & THREE MONTHS LATER
Darden reported that median salaries were $125,000, with median sign-on bonuses of $25,000, received by 89.3% of the grads, while median other guaranteed compensation, landed by 20.6% of the class, was $16,300.
The only other surprise in the school’s 2016 employment report was a decline in the job offer rate. The school said 86% of its MBAs had job offers by graduation, down three percentage points from 89% a year earlier, while 93% had offers three months later, dwon from 95% in 2015. In fact, the job offer rate was the lowest since 2013.
After consulting, the largest industry employers were financial services, attracting 27% of the class, down from 30% a year earlier, and technology, which hired 17% of Darden’s MBA output, up from 15% in 2015. Darden said 5% of its 2016 graduates accepted offers from consumer packaged goods companies. a decline from 7% a year earlier but more noticeably down from a high of 13% only three years ago in 2013. Some 4% of the class went into manufacturing, down a percentage point year-over-year but only a third of the grads who went into that field in 2013 when manufacturing lured 12% of the class. Just 3% of the MBAs went into pharma, biotech and healthcare, down from 4%, while the real estate and non-profit sectors both drew 2% of the class, and transportation took just 1%.