In an uncertain world, one thing, at least, remains true: Management consultants make bank.
In 2016, top consulting firms experienced revenue growth of between 7% and 13%, according to newly released data from Management Consulted, a “leading resource on all things consulting” based in Redding, California — and that meant a significant rise in salaries, between 4% and 5%, even as firms ramped up hiring and the Great Recession faded further in the rearview.
Even during the recession, says Namaan Mian, Management Consulted’s operations manager, management consulting firms never cut back on salaries — they just hired fewer people. In other words, at least since 2011 when MC began compiling the data, it’s never been a bad time to get hired at a top consulting firm.
“Salaries have been more than just creeping upward,” says Mian, whose company gathers data from industry insiders, clients, and readers. “The 4% to 5% rise is the biggest year-over-year increase we’ve seen since 2011. As the economy has picked up growth, these Fortune 100, 500, 1,000 companies that take advantage of the services that consulting firms offer, they’ve had more cash flow, more capital to invest in consultants. And that means that these consulting firms have to hire more people and are starting more projects.”
BEST BASE: PARTHENON-EY. BEST TOTAL: BCG
For MBAs, the top firm for base salary in the first year after graduation is a complete surprise because it’s not McKinsey, Bain or BCG. Instead, it’s Parthenon-EY ($170,000), according to MC’s data. McKinsey ($152,500) and Strategy& ($152,000) are not far behind, though the picture changes drastically for those able to max out their compensation with performance and signing bonuses. In that case, BCG offers the best opportunity ($221,100), followed by Accenture ($216,900) and Chicago-based A.T. Kearney ($216,100). (This doesn’t include other opportunities like relocation bonuses and revenue sharing; see all compensation data on pages two and three of this story.)
That’s right. Straight out of grad school and that MBA could be earning you upward of $200,000.
“It’s crazy,” Mian says of the huge salaries at top firms. “But for the cream of the crop, it’s an even tougher job to get into these firms and they’ve made sure the payoff is worth it — because they knew they were getting the best of the best.
“Parthenon-EY has had a big focus on trying to attract top talent. If you look at Bain or BCG, that base salary blows them out of the water. What they’re trying to do is really establish themselves as a top-tier strategy practice, and they’ve got a great reputation in the consulting world. But with bonuses and other incentives, other firms are offering more in total compensation.”
COMPENSATION RISES FOR INTERNS, TOO
There are caveats to the rosy outlook. Mian says when it comes to bonuses, only the top 5% to 10% of employees receive the maximum amount; you’re more likely to get half that, and if things aren’t going well — if you’re what they call a “poor performer” — you’ll only get a small bonus, if any. Also, some bonuses, such as signing and relocation bonuses, can be meted out over years.
But there’s no question that revenue and salaries at top management consulting firms are on a precipitous rise. New hires aren’t the only beneficiaries. Two to three years out of an MBA program, managers and project leaders can be making a base salary of $190,000 to $210,000, with bonuses reaching as high as $120,000; a few more years at the job and you could be making $230,000 to $300,000 and getting a $200,000 bonus. (Think that’s impressive? MC shows that consultants who leave their firms to take on banking or trading roles can increase their pay by 50%; those joining corporate America can see 10% to 20% bumps in compensation — while probably working less.)
The picture is rosy for interns, too. Assuming a standard nine- to 12-week internship, MBAs can make as much as $30,000 at BCG, $31,000 at McKinsey, or, for interns to Deloitte, $29,750 and full MBA tuition for their second year. Bain offers $29,000 for 10 weeks, while L.E.K., a global firm with offices on three continents, offers $28,125 and up to $25,000 tuition reimbursement for returning interns.
DIGITAL EXPANSION & STIFF COMPETITION FOR TALENT
Management Consulted (MC) has two main sources for its data: First and foremost, Mian says, “we work with thousands of private clients a year, and when they land offers they are gracious enough to come back and share with us the details of their offer, what firm, what position, what office, and we guarantee their anonymity. We’ve got hundreds and thousands of data points for all these different firms.” In addition, the company works with “friends inside firms” who help shed light on cost structure, bonus structure, and other details.
MC attributes the boom in revenue at consulting firms to increased demand for digital consulting services, resulting in widespread recruitment of data scientists and engineers as firms develop their digital practices. Mian says the rise in salaries has come about for several reasons, chief among them competition for the best talent with New York and Silicon Valley. “All of those factors together are kind of a perfect storm for those who manage to get an offer in consulting,” he tells Poets&Quants.
The good news extends across the landscape for MBAs as well as undergrads and interns, Mian says. “We’ve fully thrown off the shackles of the Great Recession,” he says, adding that MC’s statistics are combined growth numbers for MBAs and those with undergraduate degrees. “Undergrad numbers are rising at just about the same rate as MBA numbers are,” Mian says.
‘WHEN PEOPLE TELL YOU AN MBA IS NOT WORTH IT ANYMORE …’
While the data compiled by MC shows salaries across the U.S. are typically flat regardless of location — with the exception of San Francisco, where they are slightly higher — it’s evident that salaries in general are much higher in the U.S. than internationally, Mian says.
The reason? “Especially in the U.S., there’s a lot more competition,” Mian says. “These firms are competing with Wall Street and Silicon Valley, and so you’ve got to keep up compensation-wise. Most of these firms are U.S.-based, so their heaviest presence is in the U.S. and the average can get skewed to the higher side because a lot of these positions are the U.S. office.”
And even though they are paying more, with revenue outpacing salaries, Mian notes, “these firms are still pocketing more money every year. So they can well afford to hire more people at higher base salaries. It’s incredible. When people tell you an MBA is not worth it anymore, you can show them these salaries and be like, ‘Actually …’ If you can break into consulting, it’s definitely worth it.”
See pages two and three for salaries at each of the top firms, as well as internship salaries.