At Columbia, Consulting Becomes As Popular As Finance

Columbia Business School – Ethan Baron photo

97% OF CBS GRADS HAD JOB OFFERS THREE MONTHS AFTER GRADUATION

Even so, Columbia has had no trouble getting students plenty of job offers. The school reports that 97% of this year’s graduates had job offers three months after graduation–the same job offer rate as last year– while 92% of the students accepted their offers–just a percentage point below a year earlier.

The broader story is how career paths have shifted at the school since the Great Recession. Only five years ago, in 2011, slightly more than half–50.3%–of the MBAs at Columbia headed into finance, with just 22.3% of the class deciding on a career in consulting. The gap between the two industry fields at Columbia was 28 percentage points. This year that gap closed to 2.4 points on an industry basis and less than a single percentage point–0.7–on a function basis (see table below).

Columbia’s compensation numbers would have taken a bigger hit because of the shift if the premier global consulting firms hadn’t upped the ante on pay. This year consulting firms paid median base salaries of $145,000, up $5K from last year and $10K higher than in 2014. Consulting salaries at Columbia are second only to those at hedge funds, mutual funds and fund of funds jobs where the median base was only $5,000 higher at $150,000 this year.

The big difference, of course, in finance jobs is in the bonus category. While consulting firms paid median signing bonuses of $25,000 with little to no other guaranteed compensation, many of the financial companies truly open their wallets for the best MBA talent. MBAs who landed jobs at hedge funds, mutual funds and funds of funds, for example, reported median other compensation of $130,000. In investment banking and other investment management jobs, the other comp totaled $50,000. And in private equity, the median extra compensation was $40,875.

The biggest drop in financial jobs over the past five years has been in investment banking and brokerage. In 2011, 27.2% of Columbia’s MBAs went into that field. This year, it had fallen to only 13.4%. Private equity firms hired 5.7% of this year’s class, up from 4.1% a year earlier and only 2.4% in 2014. Investment management firms employed 5.3%, while buy-side/sell-side research scooped up 5.1% of this year’s crop of CBS MBAs. Just 1.1% of the class landed jobs in venture capital.

Some 7.8% of the class went into manufacturing, a category which includes consumer products. That was exactly the same percentage as went into that field last year. Some 3.8% of the class, up a tick from 3.7% a year earlier, made their way into real estate; 2.9% chose healthcare, up from 1.8% in 2015; 1.4% chose retail, up from 1.2% a year earlier, and 1.9% went into education, government or the non-profit sector, up from 1.8%.