In a move sure to cause a ripple effect across the management consulting landscape, BCG has announced it is raising salaries for junior employees. First-year BCG employees at the Associate and Consultant level will see their base salary increase $10,000 in October 2021. This also means that if you’re going through the recruiting process now, the base salary in your offer letter will be $10,000 higher than what was listed in our 2021 Consulting Salary Report. In addition, longer-tenured consultants will see greater-than-$10K raises when they hit the next promotion cycle. Why did BCG raise salaries, and how will top competitors respond? Read on for our take on the situation.
Why is BCG Raising Salaries?
The salary increases apply to the entry-level undergraduate and post-MBA positions at BCG (Associate and Consultant, respectively). The firm claims the pay bumps are not in response to similar raises that Goldman Sachs and other investment banks dished out earlier this year, but we’re skeptical.
As far as we can tell, an extremely tight labor market (especially at the top end) played a big role in this decision, as much as BCG doesn’t want to admit it. The firm hopes the additional money will entice candidates choosing between competitors in consulting (McKinsey, Bain), IB (Goldman, Morgan Stanley, etc.) and Silicon Valley.
Will the strategy work? We believe the answer to be yes. Candidates with multiple offers on the table will gravitate toward the firm with the higher dollar number on the offer sheet. In the frantic war for top talent it’s advantage BCG (at least for now)!
Ripple Effects: How Will Competitors Respond?
Consulting firms have been in a period of unprecedented growth over the past decade, necessitating a greater amount of human capital. The competition for top talent is tough. Firms have tried every tactic in the book to attract and retain talent, from bonuses to perks to additional benefits.
BCG even gifted current consultants 180,000 Marriott points each in May 2021, but nothing beats the tried-and-true method of increasing base salaries.
We expect BCG’s top competition to respond with similar pay increases by the end of the year – a $100,000 base salary at the post-undergrad level, and a $175,000 base salary at the post-MBA level. McKinsey and Bain are almost certain to follow suit soon, and we expect that other consulting competitors (EY-Parthenon, Strategy&, L.E.K.) won’t be far behind either.
This move by BCG is evidence of the fierce competition for talent amongst consulting firms, and between industries like consulting and banking. Will the new-and-improved BCG Associate and Consultant salary be enough to attract and retain the talent the firm needs? Only time will tell. If you want that impressive BCG salary, you’ll still have to do the work to get into one of the most prestigious firms around. That means your resume needs to be almost-perfect, and you need to be prepped for the firm’s tough case interviews!