Management Consultant Salary

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Management Consulting Salary Insights

Management Consulting Bonuses

Full-time consulting offers are nice, but bonuses have the potential to take your comp from good to great. Generally, consulting full-time hires receive signing bonuses, relocation bonuses, end-of-year performance bonuses, and more. Consulting interns are less likely to receive bonuses, although some firms do offer relocation or signing bonuses.

More firms are starting to offer returning interns a larger signing bonus than full-time counterparts who interned somewhere else. The most extravagant of these include MBA second-year tuition coverage plus signing bonuses (here’s looking at you, Deloitte).

When analyzing these bonuses, there are 5 things you should keep in mind:

1. Value base salary more than signing and relocation bonuses. Your salary during your 2nd (and sometimes 3rd) year at the firm is often a function of your initial base salary. All else held equal, we would recommend choosing a base salary of $82,000 with a $5,000 signing bonus over base salary of $80,000 with a $7,500 signing bonus.
2. On your offer letter, the listed maximum amount of the performance bonus typically goes to the top 5-10% of performers. Average performers often receive bonuses closer to half of the maximum amount, while poor performers typically only receive a small bonus if any. Also, firms that pay overtime may choose not to offer a performance bonus.
3. The size of the relocation bonus is primarily driven by the distance from your university to the office location. If you live in the same city as the office, you are sometimes offered no bonus or a smaller bonus (~$2,000 in the U.S.). However, if you live in a distant state or country, you are typically offered the firm’s maximum relocation bonus amount.
4. Relocation and signing bonuses are commonly distributed soon after signing your contract. However, they may be distributed on your start date (e.g. at IBM GBS) or given in increments over several years (e.g. L.E.K.).
5. Bonuses are usually taxed. Uncle Sam loves your bonuses and will make sure to get his share. So don’t forget to account for taxes when planning your bonus spending (or saving). Taxes may be deducted when receiving bonus payments or they may be withdrawn from future paychecks, putting a small temporary dent in your future monthly income.

Salary Growth Along the Management Consulting Career Path

The salaries above are for full-time hires and interns coming straight from an educational program. Before deciding on a final offer, consider how your salary will grow across time. Often, our interview prep clients will receive slightly higher job offers in tech than in consulting. However, the salary growth in management consulting outpaces many industry positions. Because of that, the net income after a few years in consulting can exceed those in other industries, despite an initially lower base pay.

In top consulting firms, you can typically expect a 10-20% increase in your base pay and/or performance bonuses each year. Additionally, when promoted to the next level (usually every 2-3 years), the increase in your income is substantially larger. For instance, when promoted from Associate to Consultant at BCG, your base salary almost doubles. Here’s the potential salary growth trajectory of someone working at a top consulting firm (McKinsey, Bain, or BCG) in the U.S.:

Consultant Salary Growth Trajectory:

First-year out of Undergrad/Master’s program:

• Base: ~$90k
• Signing Bonus: ~$5k
• Performance Bonus: up to ~$13.5k

First year out of MBA/PhD program:

• Base: ~$165k
• Signing Bonus: ~$30k
• Performance Bonus: up to ~$45k

Manager/Project Leader (2-3 years out of MBA/PhD) program:

• Base: $200-220k
• Bonus: $90-130k

Associate Principal/Senior Project Leader (4-5 years out of MBA/PhD) program:

• Base: $250-320k
• Bonus: $120-220k

Junior Partner/Principal (6-8 years out of MBA/PhD) program:

• Base: $350-420k
• Bonus: $350-550k

Senior Partner/Director (10+ years out of MBA/PhD) program:

• Base: $450-650k
• Bonus: $500k+

Keep in mind that most full-time hires will not make it to Partner. 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. Regardless, salary growth is substantial for each promotion you receive at a consulting firm.

Salaries When Exiting Management Consulting

Although your salary increases relatively rapidly within a top consulting firm, 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. Those entering the financial services industry receive a 30%+ increase in compensation—but work/life balance often takes a hit.

Large Consultant Salary Variation Across International Offices

There is a large variation in management consulting salaries within firms across different countries. Management consulting salaries are highest in the U.S. due to the aforementioned competition with Silicon Valley and Wall Street. Compared to the rest of the world, the United Arab Emirates, Singapore, Switzerland, and Canada also boast relatively high consultant salaries. Most surprisingly, consultant salaries in London are relatively lower given its high cost of living.

Overall, consulting salaries are competitive within their country, often offering salaries 20%+ above the average for other professional service firms. If you accept a consulting offer in any country, you will likely be paid more than the average local employee with a similar tenure in professional service industries.

Small Consultant Salary Variation Across Domestic Offices

At McKinsey, Bain, and BCG, management consulting salaries are relatively flat across all offices within a country. This has two important implications. First, there is often little room for salary negotiation unless you are an experienced hire. Second, you can increase your take-home income by choosing an office location where the cost of living is lower (e.g. choosing Atlanta over San Francisco).

In other firms, salaries are sometimes adjusted to account for living costs. For example, a Big 4 consultant working in New York often receives a slightly higher salary than a Big 4 consultant in Dallas.

Consultant Salaries for Master’s and PhD Students

Many consulting firms offer master’s students the same positions as undergraduate students. Because of that, master’s students often receive the same compensation as undergraduates. However, when a master’s student applies for a relevant technical position (e.g. data scientist), they can receive more compensation than an undergraduate counterpart. Likewise, PhDs often receive the same compensation as MBAs. This is important to note, as you should be applying for the position the firm wants to hire you for.

2021 Consultant Salary Summary

This last year has seen some upheaval in the management consulting industry. However, the industry continues to grow. Both at the undergraduate/master’s level and post-MBA/PhD, management consultant salaries continue to stay competitive to rival Banking and Big Tech.

Overall, consulting salaries are highly competitive compared to other industries. One notable exception is finance, where salaries are higher but work-life balance is often worse. Technology firms also compete with consulting firms for talent. They often offer higher base salaries but the roles are more siloed and the promotion trajectory is slower.

Do you have any consulting salary data or comments that you would like to share? You can fill out this anonymous form, add a comment below, or send us an email. As we attempt to provide quality compensation data to our readers, we appreciate any data that you share. As always, your anonymity is guaranteed.

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