How much you'll really earn working in consulting, year-by-year
Eyeing a better work-life balance, more graduates of prestigious universities and MBA programs are saying no to investment banking and yes to top consulting firms like Bain & Co., McKinsey and Boston Consulting Group (BCG). At Harvard, for example, roughly 18% of 2018 graduates took jobs in consulting, equaling the number of those who chose to work in finance after earning their degree. While pay isn’t quite on par with what big banks can offer, salaries in consulting have edged up over the past year, though bonuses will never reach the dizzying heights at top banks, private equity firms and hedge funds.
So, just how much will you make in consulting? That obviously depends on the firm. The average take-home pay for analysts working at the aforementioned “Big Three” management consulting firms is around $90k, which includes roughly a $15k bonus, according to Glassdoor. That number beats the industry-wide average pay for first-year analysts at consulting firms by roughly $10k, based on the 2018 figures from Wall Street Oasis. The bigger the name, the better the pay.
As you can see below, total take-home compensation (salary and bonus) has increased at almost every rung of the ladder, with interns seeing the biggest jump in pay compared to when we crunched the numbers a year ago. Analyst and associate-level interns are making well over 15% more than they did in 2017, likely due to the ever-escalating junior recruiting war between consulting firms, tech companies and big banks. The likes of Goldman Sachs, J.P. Morgan, Google and Facebook are now paying interns prorated salaries upwards of $85k.
Meanwhile, pay has increased year-over-year for most every role in consulting, though the upper echelons of management – VPs and MDs – saw a small downtick in compensation. This could be attributed to the fact that consulting firms are allocating more money to rope in the best junior candidates, or it could just be an anomaly due to a smaller sample size when compared to other roles.
One particular note of interest: third-year analysts and third-year associates make a bit less than their colleagues with only two years of experience. While this seems counterintuitive, it actually makes some sense. The same trend is occurring at investment banks, which pay their third-year analysts no more than their second-year analysts, despite the assumed seniority. The reason: those who don’t get promoted after two years clearly aren’t top performers, giving firms no incentive to “reward” their extra year of service.
“In today’s world, if you aren’t getting promoted – at least in name – after two to two-and-a-half years, there’s a reason,” said one New York-based MD.
Check out the total compensation numbers below, courtesy of Wall Street Oasis.
Note: We didn’t have pay information on second and third-year associates from 2017.
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