SOME ADDITIONAL INCENTIVES
Base and bonuses aren’t the only financial incentives to entice MBAs Take the MBB. Here, Bain offers 25 days of PTO, compared to 21 and 15 days respectively at McKinsey and BCG. Bain consultants moving 400 miles or more to their office receive $16,000 in relocation expenses (and $8,000 for fewer than 400 miles. McKinsey reimburses new hires for up to $10,000. That said, BCG chips in $10,312 to new consultants’ 401K, a bit higher than Bain at $8,000. Then again, McKinsey forks over 7.5% of base into a 401K – a number that only gets biggr as consultants climb the ladder. One more perk: McKinsey pays 50% of MBA tuition for returning interns according to Management Consulted.
That’s not to say you won’t find inventive recruiting strategies outside the MBB. Deloitte’s Strategy & Operations practice reimburses second year MBA tuition for returning interns – as does ZS Associates. L.E.K. Consulting pays up to $25,000 for returning MBA or Ph.D. interns – and bumps up their signing bonuses from $25,000 to $30,000 to boot. Kearney will contribute up to $8,000 to a new hire’s 401K. In addition, Booz Allen Hamilton will tack on $10,000 to consultants’ base after each of their first two years.
Here’s another factor to consider. According to Management Consulted, MBAs can expect a 10%-20% increase in base pay and possibly performance bonus each year. That doesn’t count bigger pay jumps when MBAs move from consultant to manager to principal to partner.
A LOOK AT CONSULTANT CAREER EARNINGS
Management Consulted tracked this pay trajectory using a standard MBB path. Here, MBAs generally start out with roughly a $165,000 base that is supplemented by a $30 sign on bonus and a$45,000 performance bonus. By the third year – provided MBAs survive the ‘up-or-out’ threshold – they will move into a manager or project leader role, where base ranges from $200,000-$220,000 and bonus stretches from $90,000 to $130,000. At the 5 year mark – where MBAs should find themselves in associate principal or project leader roles – base and performance bonus should hit $250,000-$320,000 and $120,000-$220,000. Those numbers accelerate at junior partner and principal level at 6-8 years, where compensation climbs to $350,000-$420,000 (base) and $350,000-$550,000 (bonus).
Making it to the senior partner and director level – roughly a decade or more into their consulting careers – is a rare feat. For those MBAs who make it, pay tops out with a $450,000-$650,000 base and performance bonuses over $500,000.
That said, Bachelor’s degree holders face a much steeper climb. After graduation, these consultants average $90,000 in MBB firms, with their pay bolstered by an average $5,000 signing bonus and a performance bonus that hits a $13,500 ceiling. These numbers also apply to Master’s degree holders (Non-MBA) for the most part. The starting pay between MBAs and Bachelor’s degree holders is particularly striking within the MBB.
UNDERGRAD CONSULTANTS COMPENSATED WELL TOO
Take McKinsey for example. In 2020, McKinsey MBAs received $165,000 in base. How did their undergraduate counterparts do? Try $90,000. Sign on bonuses reflected an equally stark difference: $30,000 vs. $5,000. However, McKinsey’s compensation system showed one anomaly compared to its rivals. In performance bonuses, first-year MBA consultants were capped at $35,000, just $5,000 above the highest amount available to undergrads. Another distinction: there was just a $2,500 difference between signing bonuses awarded to MBAs and Bachelor’s degree holders at Deloitte.
Outside the MBB, undergraduates can still earn some impressive paychecks. Alvarez & Marshall, for example, start this segment out with a$105,000 base. SSA & Company ($103,000) and Avencore ($100,000) also hit six figures, with Strategy& matching the MBB at $90,000 base. Signing bonuses also reach as high as $12,500 at Accenture Strategy and Deloitte for Bachelor’s degree holders. Cornerstone Research and Avencore even take it up a notch to $15,000 – three times what the MBB offers. Still, McKinsey sets itself apart in this segment with performance bonus. This $30,000 goodie far exceeds Bain ($22,000) and BCG ($18,000) – though it actually comes up short against Alvarez and Marsal ($40,000).
And some perks given to undergraduates compare favorably to those showered on their MBA counterparts. At Wavestone and Charles River Associates, for example, Bachelor’s degree holders enjoy 25 days of PTO. Deloitte gives them a 150% match for individual contributions to retirement. Accenture consultants can take advantage of a 15% discount on company stock. At BCG and McKinsey, when it comes to relocation, MBAs and undergrads are treated the same: up to $10,000 to cover expenses.
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