We get asked a lot about salaries in consulting. Contrary to popular belief, they do not resemble the salaries found in investment banking. That is, at least until you reach the very top.
As you might have guessed, there is not much data on this. Consultants are particularly unwilling to talk about what they earn, not least because they are incredibly competitive. This article covers what we definitely do know about some of the differences between firms, countries and levels of seniority.
First things first. We know what you’re really here for.
Which company will pay me the most? (2019)
Well, here you go.
In terms of the differences between firms, this is changing all the time.
At MBB though, Bain have always struggled to keep up with McKinsey and BCG. Their salaries at all levels tend to lag slightly behind (2020).
This rough pattern between companies has been the same for quite a while in management consulting.
That’s because, until recently, the pecking order of annual revenue has remained roughly the same. Remember, salaries are chiefly an equation of revenue divided by the number of staff. So, if a company like BCG has a high revenue and relatively few personnel, salaries will be great, whereas the opposite is more likely to be true of somewhere like Accenture or PWC.
Here are the top firms’ reported revenues for the last calendar year.
- Deloitte Consulting – $15.36 Billion
- Accenture Consulting – $4.68 Billion
- McKinsey Consulting – $7.65 Billion
- FTI Consulting – $1.76 Billion
- BCG Consulting – $5.04 Billion
- PwC Consulting – $15.96 Billion
- Bain Consulting – $2.30 Billion
- IBM Consulting – $3.36 Billion
- L.E.K. Consulting – $100 Million
The table from managementconsulted.com skips out a few outliers. Within certain countries, there are a few upstarts making big bucks that pay their consultants a shedload. For example, in the UK, Newton Europe follows closely behind MBB, Simon Kucher kicks up a ruckus in America, and Tata pay extremely well in India.
In addition, this sort of data comes with a pinch of salt. Remember it is reported by analysts. Every analyst bumps up what they earn when they are telling their friends.
Secondly, most companies have a range of salaries at each pay grade. Depending on performance, loyalty etc, two Associates might be paid significantly different wages. Therefore, you can never quite know what a firm is going to offer you! The analysts that do report what they earn are probably the ones towards the upper end of the pay bracket.
Of course, compared with investment banking, all of these companies pay significantly less. The table below is now a few years out of date, but it highlights this difference. In fact, it probably over exaggerates consulting salaries in the UK. They are usually closer to £35 – 40,000 starting. An Analyst at Goldman Sachs whereas would be pushing £100,000.
A quick note on internships
No-one really tells you about internship pay do they! Thats because its really really weird. At the best summer internships you get the same as an investment banking internship. In the UK, that was £10,000 for summer 2019 or $12 – 15,000.
At the other end, you get paid next to nothing. The pay may even be hourly. Deloitte paid their summer interns closer to £3,000 for an 8 week internship, which is pretty poor. Granted, McKinsey might demand the full 12 weeks to make a good assessment, but the pay doesn’t scale well.
Worst of all, McKinsey, Bain and BCG have the capacity to convert almost all of their interns, which they usually do. The Big 4 consulting firms whereas only want a smaller portion of interns to carry through and so you will be fighting for your mettle all summer on that little salary.
In consulting, the salary progression is also more steady. Your salary will definitely rise every year by default. This is usually 2-5% to match inflation, company growth etc.
However, when you are promoted, the salary increase is not disproportionate, as it is in banking. For example, the salary increase between an analyst position and an Associate position is probably only 20-30%. If you start out at McKinsey on their £45,000 Business Analyst salary in the UK, you can expect to be on about £65,000 when you are promoted to an Associate position after two years.
For other companies with a different promotion structure, the gradation in salaries may look more like this. As you can see, bonuses will almost certainly be capped. It is highly unlikely that a consultant is ever in a situation where their bonus is a % of a project or anything like that. Instead, it is usually 5-10% of the base salary.
Where this graph references ‘partner’ salaries, it is safe to assume that this is a Junior Partner. After becoming a partner, your salary can rise exponentially to match that of a Partner in almost any industry. You quickly become an ‘equity’ partner meaning that you are paid in company stock. Therefore you own the company. As you do good work, the company does well, and your salary gets a bump. It goes without saying that Partners’ bonuses are also in a different league.
Finally, an important thing to consider is how salaries scale up at different firms, depending on whether you have an MBA or not. At lots of firms, simply having an MBA, but being ranked the same as one of your colleagues may well warrant a pay rise. Remember, at MBB, your MBA will be paid for, so this is a win-win scenario!
In the USA, Bain, McKinsey and Bain offer the most competitive salaries. The gap between MBB salaries and other salaries is even wider in other countries. We have attached some salary comparisons of PWC and Accenture for reference.
For more info on consulting salaries across different industries, check out consulting.com. We think it is pretty useful at answering these questions without so much data!
However, be wary of articles that quote specific numbers for salaries at each firm. As this article has mentioned, there are a number of reasons why these are likely to be inaccurate. So, do check-out Glassdoor and LinkedIn Salaries, but beware!