Heightened competition for MBA talent from tech firms and Wall Street apparently has caused the MBA-hungry consulting industry to increase their base salary offers to $140,000 this year, a $5,000 increase from the standard $135,000 offers to top-tier MBA graduates in recent years.
The increase in consulting pay now matches the $140,000 median that private equity outfits are paying Booth grads for the highest starting salaries of any industry. The rise occurred during a recruiting year when investment banking firms significantly raised the ante in attracting MBAs from highly selective business schools. The median base salary in i-banking jumped by $25,000 this year to $125,000.
In one of the first MBA employment reports for the Class of 2015, the University of Chicago’s Booth School of Business showed that the consulting bump helped to push overall median salaries for its MBAs to a record $125,000, a $5,000 increase from a year earlier. It was the second year in a row in which median salaries rose by $5,000. Two years ago, median salary for graduating Boothies was $115,000. In 2009, median salaries at the school were just $100,000.
More graduating MBAs found those high consulting offers hard to turn down. Booth said that 32.3% of the Class of 2015 headed into the consulting industry this year, up from 27.9% in 2014. Tech firms continued to take an increasing number of Booth MBAs as well. Some 15% of the graduating class went into tech, up from 13.5% a year earlier and 9.0% in 2012.
CONSULTING ALMOST ATTRACTED MORE BOOTHIES THIS YEAR THAN FINANCE
For the first time ever, consulting very nearly recruited more MBAs from Booth than financial services (see below chart). Finance landed 34.8% of the class, a mere 1.5 percentage points higher than the crowd that rushed off to McKinsey, BCG, Bain, Accenture, Deloitte, A.T. Kearney, et al. In finance, most Booth MBAs went into investment banking and brokerage–16.8%–followed by investment management and research–5.4%. Some 4.9% of the class headed into private equity this year, down from 5.9% in 2014. Only 0.9% of the class accepted jobs in venture capital firms, down from 2.0% a year earlier.
Indiana University’s Kelley School of Business, with a full-time MBA program ranked 20th in the U.S., also reported that its median base salaries rose to $107,000 this year, from $104,000 last year and $98,000 in 2012. Median sign-on bonuses at Kelley edged up higher to $22,000 from $20,000 a year earlier. Some 21.6% of this year’s Kelley class went into manufacturing, with 18.6% landing jobs in consulting at median base salaries of $135,000, the highest for any industry recruiting at the school.
This year i-banking jobs at Booth paid median salaries of $125,000, but the sign-on bonuses were more generous than those offered by consulting, $40,000 versus $25,000 for consulting, making equal the $165,000 starting compensation packages for those who entered either consulting or investment banking. In its interim employment report, Booth said that 62% of accepted offers reported sign-on bonuses, while 12% of the class gained “other guaranteed compensation” with a median of $25,000 each.