Consulting salary structure. It’s often misunderstood and it can be difficult to figure out exactly how much you might expect to make. Look no further to get the full and complete picture on compensation structure. Internship compensation, MBA compensation, full time consultant salaries, engagement manager salaries, and salary structure at the Partner level, all of them are covered. Listen to Jenny Rae break it down so you can go into your salary negotiation meeting fully prepared.
Consulting Salary Structure YouTube Transcription
Hi, I’m Jenny Rae La Roux, Managing Director of Management Consulted. And we do an extensive salary report every year, where we cover multiple firms and multiple positions. Today I’m gonna aggregate some of our learnings together, so that you can understand how salary structuring works at consulting firms.
Consulting Internship Compensation
Let me start at the beginning. The beginning of every aspirational consultants process, is to think about an internship. And consulting firms hire interns mostly from two places. Juniors and undergrad, and MBAs in their first year. The internships are summer internships and they’re pretty similar. They’re paid at very different rates, but the structure is the same. The internship is prorated for some of the strategy firms as a percentage of your overall salary. It is usually not included with a signing bonus or with a bonus, unless you succeed in the summer internship than the you’ll receive a full signing bonus for your full time salary. And then you’re expected to work an unlimited amount of hours for that pro-rated amount.
Now many other firms like big four firms, do pay by the hour for the summer. And so if you’re going to do a lot of overtime, those can be attractive places to work for the summer. Interestingly, you do have full benefits when you’re on the job in the summer but there aren’t bonuses, relocation, and other benefits like 401k matching that kick in as an intern.
Full Time Consulting Salaries
All of that changes when you get hired full time. And so undergrad full-time hires coming out of your senior year in undergrad, and MBA full-time hires coming out of your second year of MBA, are paid very much the same. And this is where the bells and the whistles kick in. You have your base, but you also have your bonus and the target bonus is a pretty good approximation of what you’re likely to make. It’s not like some firms that will promised a certain bonus, and then scale back significantly. You can certainly underperform, but most people don’t, most people perform on the target or slightly above the target.
In addition, you have 401k matches. Consulting firms are very generous with their 401k matches. In addition you have relocation bonuses, you have signing bonuses, and then sometimes they’re even firm-wide profit sharing bonuses. So you have multiple different elements of your compensation.
On top of all of that, your travel will be entirely covered, sometimes per diem, so you can pocket some of that of you’re frugal. And sometimes just on an expensed basis. But either way, you’re going to get some additional perks and benefits beyond the standards of your job.
Engagement Manager & Manager Salaries
Now it starts to get interesting when you move beyond those initial analyst roles, into Engagement Manager or Manager Positions, where your compensation begins to be scaled back on a guaranteed level, and adhering more to your performance basis. You also, in some firms, begin to gain equity in the firms. And you will either have to pay toward getting some of that equity, so you’ll pay into it, or you’ll receive it as a portion of your compensation.
Consulting Partner Salaries
Once you move up to the final senior levels, the Partner, the selling levels inside the organization. The ranks really begin to flip-flop. Your base compensation, levels out. And it’s still very attractive, it’s in the high six figures, but you’re still working on bonuses that will become the majority of your compensation. And your bonus will be contingent on the volume of projects that you sell, the way that you up-sell them, the way that you cross-sell them with other organizations, and projects that you work on as an expert that you didn’t sell. So there’s a highly variable portion of compensation once you move into the partner ranks. Consulting firms sometimes will require a buy-in, but not always. Sometimes the buy-in will be staggered over time. So they operate a little bit differently than engineering consulting firms, or law firms in that way.
It’s important to understand two final things about consulting salary structure and compensation in consulting firms. First of all, you can expect a pretty significant jump in your base salary and commensurate to that, your bonus, in every year that you work in a consulting firm. It’s accelerated versus other places. So, it’s 15 to 20 percent in a standard year, and then 30 to 40 percent in a promotion year, which is usually every two to three years. So you have these huge accelerated jumps in your compensation over time.
The final thing that’s really important for you to understand, is that negotiating for consulting salaries is pretty unheard of internally, and it’s also unheard of when you come into a consulting firm. You don’t negotiate on the numbers, you negotiate on the position. Because the positions are pretty clearly defined. This is meant to keep a team oriented attitude where the people that are performing the same roles, are compensated at the base in the same way. And they simply allow for your performance feedback to be the variable portion of your compensation.
Ultimately there are these four levels to consulting salary structure: 1) Pre-mba and post MBA, which operate very similarly. 2) Managers who are a blend between the more junior style of compensation, and 3) the more senior style of performance compensation. 4) And then finally Partners. Who are really incentivized along with how much they sell and how much they deliver for the firm.
If you’re interested in joining a consulting firm, or want to know if your salary is fair, where you’re currently working, we would love to work with you. If you’re interested in doing a salary study, across multiple firms we also can help with that.