Business students love consulting! Forget the same stale routine. In consulting, everything is new: New teammates, new clients, new locations. You’re always creating and learning, always becoming more well-rounded and valuable. Each day, consultants enjoy the privilege of working alongside the best minds on defining issues and cutting edge methods. Best of all, consulting firms pay a premium for talent.
How much can you expect to earn in consulting? A lot says ManagementConsulted, a firm that caters to future consultants through services ranging from resume reviews to case method sessions. In consulting, undergraduates can expect to make $80,000 in base pay during their first year in consulting. And that doesn’t count the $5,000 signing bonus – let alone the performance bonus, which can go as high as $12,000.
A “RECESSION-PROOF” INDUSTRY
Impressed? Brace yourself: MBAs rake in nearly double that. Here, the average starting pay is $150,000. The average signing bonus –$25,000 – is five times what an undergrads grosses. Oh, and the performance bonuses for MBAs can go as high as $44,000 in their first year too.
Sound too good to be true? The consulting business is booming. Namaan Mian, the operations manager for ManagementConsulted (MC), tells Poets&Quants that consulting firms enjoyed a 10% revenue spike in 2017. Thanks to its business model, which is absent cost centers like production, marketing, and distribution, consulting firms can funnel more dollars into its biggest asset: talent. As a result, business majors and MBAs reap the benefits with nary a bubble in sight.
“Even during the Great Recession,” Mian notes, “management consulting proved itself as almost “recession-proof.” When times are bad, companies are looking for every potential avenue to drive growth and cut costs. When times are good, companies have additional spending capacity, which they use to bring in consulting firms to continue to drive growth or work on projects further downstream. So, I only see consulting salaries continuing to grow in the coming years.”
STRATEGY& PAYS UP TO $100K FOR BACHELOR’S DEGREE HOLDERS
The numbers bear out Mian’s assessment. He points to base salaries for starting offers, which have risen 5% year-over-year. However, he adds that some sectors have performed better than other. The difference between strategy and tech consulting is a case in point. According to Mian, strategy consulting salaries are rising twice as fast at a 15%-20% clip compared to 5%-10% for tech consulting. That means the gap only grows as a graduate’s career progresses. “This can really affect lifetime earnings for someone considering both paths, as tech consulting salaries start out about approximately 15-20% lower than strategy consulting salaries,” he says.
Market segment may be one factor, but the actual firm can play an even bigger role. Which consulting firms are paying the most for talent? That depends on how students view compensation – and whether they hold an undergraduate degree or an MBA.
Base pay is perhaps the best indicator, as it is the most consistent form of earnings. In the undergraduate population, Strategy& ranks among the big winners. Formerly Booz & Company, Strategy& pays undergrads $90,000 in American dollars in their first year based on MC figures. That’s only part of the calculus for new graduates. Consulting firms traditionally tack on signing bonuses, which are generally uniform for the same position. Here, Strategy& also splurges with a $10,000 average signing bonus – tying it with Parthenon for second place (though A.T. Kearney, McKinsey, and PwC are known to go as high as $10,000).
That’s not to say there was a steep drop off after Strategy&. Deloitte starts out bachelor’s degree holders out at $88,000. When you couple that with its $12,500 signing bonus, Deloitte pays slightly more than Strategy& — at least to start. Among the big three consulting firms – McKinsey, Bain & Company, and the Boston Consulting Group (BCG) – base pay hovers at $83K-$84K, with each doling out $5,000 in signing bonuses. Business students can also take heart at the opposite end of the scale. The lowest pay came at Mercer, where the base was still a respectable $65,000 (which excludes the $3,000 signing bonus).
Go to next page to first-year pay for MBAs at leading consulting firms (and how it compares to base pay for undergrads).