It’s not called the Massachusetts Institute of Consulting, but for years that industry has been the top destination for MBAs graduating from MIT’s Sloan School of Management. Now consulting must share the top spot with a more apropos contender: technology. Both were the choice of 30.7% of Sloan grads in 2019, according to the school’s recently released employment report, which also shows a big jump in median compensation from 2018.
Tech has long been second fiddle for Sloan MBAs, but never by much. Since 2015 the two industries have been neck-and-neck, with consulting coming out on top each time but never by more than a couple of percentage points. But it isn’t this year’s tech surge that is driving the increase in MIT MBAs’ overall pay. According to the Sloan School’s jobs report, median total compensation for all members of the Class of 2019 seeking work — including median salary plus median signing bonus and other compensation, the latter two adjusted for the percentage of grads who received them — is $173,670, up from $161,355, a 7.6% increase — and that was largely pushed by strong starting salaries in consulting and hefty signing bonuses in finance.
On an average basis, Sloanies made $169,434, up about 1.5% from last year’s mark of $166,906.
“We don’t focus on total compensation, as it does not provide a consistent salary figure per MBACSEA standards,” Susan Sandler Brennan, assistant dean of Sloan’s career management office, tells Poets&Quants. “We have noticed a growing trend of our graduates accepting unique roles in growing companies, often where they are the only MIT Sloan hire, and these highly skilled graduates can command higher salaries.”
GREATER REPORTING OF BONUSES & OTHER COMP HELPS MIT EDGE OUT HBS IN OVERALL PAY
For the second straight year, Sloan MBAs got paid a bit more than their neighbors at Harvard Business School, which reported a total median compensation package of $172,090 in 2019. (Last year, MIT squeaked past HBS $161,355 to $160,268.) Sloan has consulting salaries to thank, in large part, for the advantage: median starting pay for the McKinsey-, Bain-, and Boston Consulting Group-bound is $160,000, highest of any industry — higher even than private equity and venture capital, which tend to present the gaudiest numbers in MBA employment reports. Median tech salaries were $135,000, and median finance salaries — including PE/VC — stood at $145,000. Finance was the destination of 19.7% of MIT MBAs, the most since 2013.
Overall, MIT reports a median starting salary of $140,000, up from $135,000 last year; median signing bonus of $30,000, same as last year; and median “other” compensation of $35,000, up from $27,000. All these benchmarks are lower than Harvard’s; however, MIT’s saving grace is that its percentages reporting signing bonuses and other comp are much higher, 72.1% to 57% and 34.4% to 12%, respectively.
Nearly 96% of MIT’s 403 grads received job offers by three months after graduation, down slightly from last year (97%), while 93.2% accepted, down slightly from 93.6% in 2018. Eschewing talk of salaries in favor of motivations, something MIT chronicles more closely than most other schools, Brennan points out that money is consistently a secondary consideration for MIT Sloan MBAs in choosing where and for whom to work.
“The trend,” she says, “is about growth opportunities, supported by our data that 44.3% of our graduates accepted positions for their growth potential. The consulting trajectory has traditionally supported career growth, leveraging the MBA toolkit, and remains a strong career path for our graduates. MIT Sloan graduates are also excited about opportunities at growth-stage companies in technology, where they are able to make an impact by scaling a company.
“The transformational stage is very enticing to our graduates.”
WHERE THEY WENT TO WORK: A SURPRISE LEADER
While consulting, tech, and financial services remain the big three at MIT (as they are at just about all of Sloan’s peer schools), other notable choices for 2019 grads include pharma/healthcare/biotech (5.6%), manufacturing, telecommunications, and transportation/equipment/defense (3.6%), automotive/aerospace (2.3%), consumer products (1.3%), and oil/energy (1.3%).
The list of top employers of Sloan MBAs has been in a bit of upheaval in recent years, and 2019 saw the biggest convulsions yet. Until three years ago, consulting giant McKinsey & Company was regularly the biggest grabber of Sloan grads, but it lost that distinction to Amazon in 2017 and slipped to third last year. This year McKinsey dropped even further, to fourth, hiring only 12 MBAs — and roaring into the top spot was another consulting behemoth, Boston Consulting Group, which hired 36 MBAs, up from 24 in 2018. A third consulting company, Bain & Co., hired 19 Sloan grads, while Google hired 15.
Of the 403 MIT Sloan grads who earned their MBAs this year, 324, or just over 80%, sought new employment, while 46 — 11.4% — were sponsored by an employer to which they returned. Another 27, or 6.7%, started their own business. The class, which was comprised of 42% women, had an average of 4.9 years experience before beginning their graduate studies.
Nearly three-quarters (73.5%) of all job offers were school facilitated, including 38.1% that resulted from summer internships and another 13.3% that resulted from job postings by Sloan or the wider university. Of the 26.5% of jobs that were student-facilitated, the most (9.5%) were a result of students’ personal networks, while 7.1% came from online job postings and another 6.5% from direct contact with employers.
Forecasting to next year, will tech finally overcome consulting at MIT Sloan? Chances are good if this year’s summer internships are a reliable indicator. Nearly a quarter of the Class of 2020 (23.9%) interned for a software/internet company, compared to 19.6% who fetched coffee at a consulting firm.