Consulting Pay: What MBAs Earned In 2022

BOUTIQUES OPEN THEIR WALLETS FOR MBA GRADS

The pay and benefits are equally enticing outside the MBB for MBAs and PhDs. Just look at the top firms. When you add base and potential bonus, EY Parthenon hires can pull in $227,500. That doesn’t include the firm’s unlimited vacation – on top of an extra $10K bonus (tacked on to a $30K bonus) for early signing. Ernst & Young’s $175K starting base is closer to the MBB than most firms, while the 30 and 25 vacation days dangled by KPMG and Deloitte respectively are equally competitive. At PwC, MBA and PhD hires can collect $30K on their first day. Some firms even compete directly with the MBB. At Strategy&, first-years can make up to $250K or more, when you factor in a $190K base, a $30K sign-on bonus, and up to $60K in performance bonus. Accenture Strategy dangles a similar package, one that also covers up to $80K in tuition reimbursement.

The boutique firms are equally competitive for MBAs and PhDs in some spots. At Alvarez & Marsal, grads can make up to $262,500 in their first year between pay, sign-on bonus, and performance incentive. Those totals are $260K at OC&C Strategy Consultants and $253,800 at Kearney. For returning interns, ZS Associates reimburses second-year tuition. The Analysis Group ups the ante on sigh-on bonuses by paying out $45K, while Oliver Wyman tacks a $15K early signing bonus to the $30K it already bonuses new hires. AlixPartners matches that total in its hiring package: a $35K sign on bonus supplemented by a $10K payout for returning interns. At the same time, AlixPartners offers an uncapped performance bonus that reaches $60K or higher – a bonus structure that is also employed by Galt & Associates. If you’re looking for extra time, Maine Pointe accommodates employees with 29 paid vacation days. And similar vacation time is baked into offers from Charles River Associates, IQVIA, Putnam, Vizient, and Xynteo.

Of course, these numbers come with strings attached. Take performance bonuses. Just 5%-10% of consultants, company-wide, max their bonus. The rest receive a check somewhere in the middle. In some cases, signing bonuses are paid out across the first year rather than deposited in a lump sum. In most firms, relocation bonuses are based on the distance between a company office and the university – not the home residence.

Bain consultants in the New York City home office. Courtesy photo

INTERNSHIP PAY IN CONSULTING

Another form of MBA pay in consulting: summer internships. Lasting 8-12 weeks, the experience – resources, networking, access, training, and impact – really differentiate consulting firms. However, it is hard to argue that some firms perform better here than others.

At the undergraduate level, you could safely say consulting internships pay students way more than their campus jobs. Among the MBB, summer internship pay ranges from $21,154 (BCG) to $22,500 (Bain). Over 10 weeks, Accenture Strategy pays $32 an hour – or $12,800. In contrast, Deloitte and PwC kick in $41 an hour – which equates to $16,400 over the same period. Strategy& boasts the highest pay at $48 an hour, with Ernst & Young being the runner up on hourly compensation at $45 per hour according to Management Consulted. Overall, the biggest spender is Oliver Wyman, where bachelor’s and master’s degree holders collect $19,038 over just nine weeks, just ahead of Kearney interns at $19,230. And this segment doesn’t reap weekly paychecks. In total, there were 11 firms divvying out sign-on bonuses, topped by PwC paying $3,000.

Not surprisingly, the numbers are even gaudier for MBAs and PhDs. True to form, the MBB follow each other closely on MBA pay: led by McKinsey ($36,923). Those numbers are closely followed by Kearney ($36,153), Ernst & Young ($35,000), and EY Parthenon ($35,000). In terms of signing bonus, Accenture Strategy, Ernst & Young, ZS Associates each paid their summer interns $5K to join. Accenture Strategy even doled out $5K for internship relocation, while KPMG offered $99 an hour for overtime.

BCGers have enjoyed getting back together this summer through fun office, case team, and diversity affinity network events

A LOOK AT 10 YEARS OF MBA PAY IN CONSULTING

In announcing its findings for the 2023 Management Consulting Salaries, Management Consulted noted that this year represented the 14th year where pay increased for consultants – with just one year reporting lower compensation that the previous year since 2008. To provide historical context, Management Consulted points to a 10% pay increase over the past year – a far cry from the usual growth rate, which spans 2%-4%.  Those percentages only get bigger as consultants build their career. Over years of collecting data, Management Consulted has found that consultants can expect their base and performance bonuses to increase by 10% to 20% annually. Using average pay growth, they are able to plot out compensation from associate to senior partner using numbers from an MBB firm.

Here, a first-year will likely net a $190K base along with a performance bonus up to $60K. Within two years, that base should rise to $220K-$240K once an MBA or PhD transitions from associate to manager (with a performance bonus that nearly doubles). By the time an MBA makes associate principle or senior project leader, the base and bonus climb to $275K-$305K and $150K-$250K respectively. Within eight years of starting, high-performing MBB consultants should be reaching the rarified air of partners and principles, where bases range from $375K-$450K – and performance bonuses start at $500K. When they reach the pinnacle of senior partner and director – a decade or more after they start – MBAs should be averaging, at minimum, $500K in both bas and bonus.

That’s a big difference from bachelor’s and master’s degree holders in the first year. At the MBB level, they earn $80K less than MBAs in base, not counting half the performance bonus and a seventh of the signing bonus. This trajectory also reflects the importance of landing the biggest base to start. While the gap is smaller at the MBA level, the difference grows increasingly pronounced.

Just compare an MBB ($190K) to start against a Big 4 firm ($175K). After three years, with an average pay increase of 10% each, the pay difference is $628,000 vs. $579,000 – or $49,000. That’s not overly troubling…until you look at average performance bonus. That comes in at $60K in year 1 and $100K-$120K in years 2-3 at the MBB level and roughly $40K in year 1 $67K-$81K over years 2-3 for the Big 4 (assuming Big 4 firms continue to bonus out at two-thirds of the MBB). If the MBB and Big 4 consultants each attain a 90% of their performance bonus in this scenario (at the top end) over three years, the MBB consultant will more than double their Big 4 counterpart ($365,110 vs. $181,000).

McKinsey at ROMBA 2019

STILL THE ONE

These dual gaps only widen over time in consulting – though time and patience can be in short supply here. “Most full-time hires will not make it to Partner” Management Consulted admits. “Many consulting firms have an “up-or-out” promotion structure – and many consultants choose to leave. Those who perform exceptionally are given the chance to be promoted, while poor performers are encouraged to seek employment elsewhere. Because of the up-or-out structure and the attractive exit opportunities, only a small percentage of consulting recruits make it all the way to Senior Partner.”

Sounds cruel, but don’t shed too many tears for consultants, adds Management Consulted. “You typically receive a pay increase when leaving, as well as a bump in lifestyle. In the U.S., the average consultant who accepts an industry position receives a 12-20% increase in pay and a better work-life balance.”

Indeed, generalists face a trying time in consulting. As Management Consulted observes, firms are increasingly turning to specialists – with MBAs making up less than 20% of McKinsey’s latest hiring batch. While consulting may contract in the coming years, it is still faring better than its competitors in finance and technology. With finance, the benefits of compensation – up to 30% higher than consulting – is offset by long hours and heavier demands that undermine work-life balance. In technology, hires endure longer promotion cycles and more “siloed” assignments. Hence, consulting remains the industry to join for forward-thinking business school talent.

“Outside of finance, post-MBA compensation packages are the highest in consulting out of any industry,” Management Consulting adds. “Not only are finance and tech slowing hiring, but consulting continues to offer faster promotion cycles, broader industry exposure, and a better path to business leadership.”

To read the full Management Consulting salary report, with details on compensation packages for over 100 firms, click here.

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