FOR MBAs, PARTHENON PAY BREAKS $200K BARRIER IN YEAR ONE
This standard doesn’t quite follow suit among MBAs, however. Among these students Parthenon bests Strategy& in starting pay by a $170K-to-$147K margin (along with paying $10K more in sign on bonus too). In fact, Parthenon topped all firms in combined base and sign on bonus, offering $205,000 in guaranteed first year pay alone to MBAs. Bain & Company also ranked among the most generous consulting firms to start according to MC figures. The firm offers a $148,000 average base and a $37,000 signing bonus. These numbers outpaced both McKinsey ($152,500 base and $25,000 bonus) and BCG ($147,000 base and $30,000 bonus).
As graduates gain experience, their paychecks soar. MC has found that consultants can expect 10%-20% increases in base pay and performance bonuses annually. At the same time, MC is careful to note that just the top 5%-10% of employees earn the maximum bonus; the majority takes away half of that amount. While firms generally furnish standard offers, MC concedes that its salary data shows that they accommodate higher living costs in pricier markets like San Francisco and New York City.
Eventually, such adjustments are negligible over time – at least for MBAs. MC figures show average base salaries climb to $190K-$210K after two to three years of experience, when MBAs rise to the manager and project leader level. This pay is supplemented by performance bonuses ranging from $80K-$120K. Once MBA graduates move into associate principal or senior project leader roles after 4-5 years, the base and bonus jump to $230K-$300K and $110K-$200K levels respectively. At the junior partner and principal levels, which occurs after 6-8 years of experience, performance bonuses become increasingly lucrative, ranging from $300K-$500K – not counting the $320K-$400K base. After a decade or more at a leading consulting firm – when MBAs reach senior partner or director level – base pay can start at $400K and reach as high as $600K. By the same token, MC notes that senior partners “usually make” a million in performance bonus, with top performers going as high as $5 million.
MORE TO PACKAGE THAN BASE AND BONUS
That’s the long view. In the short-term, consulting offers are often take-it-or-leave-it propositions with few exceptions says Mian. “Firms don’t budge much on their compensation packages. They may make an exception if you are a top recruit in your region, and have pending offers from other firms as well.”
However, many administer perks that are hard to beat. At Deloitte, MBA interns who return to the firm after graduation receive full tuition reimbursement for their second year – and Accenture will shoulder those same costs up to $80,000. Accenture will also cover relocation fees for undergrads at a $5,000 clip, with McKinsey going as high as $9,000 for MBAs. Accenture, A.T. Kearney, and Ernst & Young will do a 6% match on 401Ks for the undergrad employees after a year of service. In addition, Accenture makes discounted stock available to consultants, while Huron extends travel bonuses up to $3,750.
How effective have such tools been? “Very effective,” says Mian. What’s more, he says, some of the most attractive and generous perks may not even carry a dollar value. “These are traditional benefits (401K matching, comprehensive health, etc.) and nontraditional – first class travel, the draw of working with extremely bright colleagues, and fantastic professional development programs.”
CONSULTANTS OFFER EXPERTISE AND “POLITICAL COVER”
Consulting may be a popular destination for savvy business majors and undergrads, but it has also emerged as an increasingly popular option for employers in an improving economy. For clients, consulting is a means to pursue growth, without having to absorb costly, long-term investments in staff and expertise.
“Clients have additional spending capacity,” observes Mian. “For many companies, it’s not hard to see the ROI from bringing a firm in for a 4-6 month engagement. In addition, as companies grow leaner, many of them have short and medium-term staffing needs due to a variety of factors such as recent downsizings or sudden expansion). Plus, consultants bring analytical horsepower. Many internal employees just may not have the skills or knowledge sufficient for a particular project or initiative. Or may not be able to definitively say (backed with data) that a certain strategy is the best option.”
Consultants bring another benefit to the table as well. “They are an external change force or ‘political cover’” Mian adds. “Hiring consultants can be a way of reaching desired conclusions without shouldering the blame for consequences.”
Go to next page to see pay growth at various consulting firms since 2015.