Consulting Pay: What MBAs Earned In 2020

The war for talent.

The phrase is hammy, no doubt. Still, it reflects a fundamental shift in the consulting industry. MBB firms aren’t just competing with each other for talent. They’re also being pitted against tech firms for a chance to make an impact. Financial firms, which suffered an exodus of talent into consulting, are offering jaw-dropping packages to cherry-picked talent. As always, the best talent hears that siren song to become their own boss and do things their way.

That’s because real talent brings imagination and ideas, courage and commitment, short-term spikes and long-term relationships. These talents never stop growing, possessing high ceilings and low egos. They are the life blood of consulting: the problem-solvers and connectors who will emerge as the future partners in their firms – and the future CEOs of their clients.

THE MOST CURRENT AND ACCURATE PAY INFORMATION

The war for this talent is fought on many fronts. The best talent is seeking cultures that fit their values and challenge them to  stretch their abilities. Oh – and they want to get paid too. And that’s where Management Consulted comes into play.

Each January Management Consulted publishes its Management Consulting Salary survey. This compilation, the firm says, may be the only “firsthand report in the industry containing current numbers obtained directly from offer letters for an entry level McKinsey salary, Boston Consulting Group salary, and stats from over 60 additional consulting firms.” The data is derived from Management Consulted’s interview prep and resume prep services (along with verified website visitors and data furnished by consulting firms). Even more, the pay data comes from respondents who joined their firms over the past year. This makes it more up-to-date, Management Consulted notes, than sources like PayScale or Indeed.

Where can MBA (and Ph.D.) grads earn the most starting out? In terms of base pay, it isn’t necessarily the MBB. According to the latest data, the highest bases stem from Kearney, a firm on the decline according to the latest Vault Consulting 50 ranking. Kearney bases averaged $168,000 – a number matched by Strategy& in 2020. In contrast, each MBB firm started MBAs out at a $165,000 base, with Oliver Wyman clocking in at $160,000. Alvarez & Marsal and ClearView Health Partners, two boutiques that cracked the Vault Top 10 this year, produced two of the lowest bases at $125,000 and $115,000 respectively.

Once again, the top consulting firm according to the employees in the industry: Bain & Company. Bain photo

A LOOK AT BONUSES

Of course, base is only one facet of compensation. Signing bonuses – short-term jolts that provide quick cash to strapped graduates – are another facet of the consulting talent wars. The MBB compensates consistently at $30,000, a number eclipsed by both Accenture Strategy and KPMG ($35,000 starting bonuses). Better still, Oliver Wyman doled out $45,000 signing bonuses. That said, some consulting firms are performing just fine without splashy bonuses. Deloitte, for one, averages $15,000 to start. At the same time, Alvarez & Marsal and ClearView Health Partners allotted $10,000 and $2,500 respectively.

Alas, a signing bonus is a one-time gift whose value pales in comparison to base pay. In many cases, it falls short of annual performance bonuses too. At Bain & Company and the Boston Consulting Group, for example, first year MBA consultants can snag bonuses up to $41,250. That’s $6,250 better than McKinsey & Company, which has seen its Compensation score drop in the Vault Consulting 50 in recent years. Which firm provides the biggest performance bonus among top consulting firms? That honor belongs to Strategy&, where MBAs can tack on an additional $55,400. Alvarez & Marshal also ranks among the most generous with $50,000 in performance bonuses.

Mind you, performance bonuses come with a caveat according to Management Consulted. Generally, only the top 5%-10% of performance take home the full bonus. For the most part, average performance equals half of the maximum (which, as expected, is taxed like base pay and sign-on bonus). In addition, as Management Consulted notes, large firms follow a ‘take it or leave it’ approach to entry level compensation with little room for negotiation.

Along the same lines, you’ll find boutiques outpacing the big players in certain dimensions. For example, OC&C Strategy Consultants provides a $57,750 performance bonus to MBAs and Ph.Ds. By the same token, DGC Partners and Partners in Performance start this segment out at $180,000 — $15,000 higher than the MBB. What’s the catch? Simple: no sign on or performance bonuses.

Go to next page for MBA pay at each step of a consulting career.