Not exactly words that inspire confidence in Economics 101. And you might even feel suspicious when words like steady, normalize, and inertia are tossed into the mix. Fact is, the 2024 Consulting Salaries Report, released Tuesday by Management Consulted, doesn’t mince words. 2023 was a disappointing year for consulting pay and benefits, with the report riddled with terms like decline, fewer, and less.
The silver lining? It could’ve been worse.
“Overall, even amid declining growth, margins held steady due to layoffs, reduced hiring, and flatlining salaries,” according to the report.
CATCHING UP TO AMERICAN PAY
Alas, consultants endured the brunt of industry fluctuations – pay-wise, at least. Management Consulted notes that labor has exceeded work, resulting in hiring freezes and layoffs. In many cases, consulting firms weren’t shy about curbing bonuses and benefits too. After all, they held all the leverage.
“While firms kept base compensation flat, many went further – decreasing the total earning power of new consultants by decreasing the maximum performance bonuses they could earn,” the report notes. “In addition, after recent updates to top-down compensation structures, raises this year were also lower. This tells us two things: first, many firms are using depressed raises as a tool to increase attrition, which has been lower than historical averages over the last year. Second, with slowdowns in traditional exit sectors (e.g., corporate strategy, PE), firms aren’t worried about too much talent leaving at once.”
This gave a decided advantage to larger, incumbent firms. While their pay may have stagnated, they still set the industry pace. Even more, these firms boast the versatility, resources, connections, training, and prestige that bring value beyond a paycheck. Still, the economic downturn dogging consulting did fuel one shift impacting firms big-and-small.
“This year’s compensation inertia took place at both the pre-MBA and post-MBA entry levels and was most pronounced in the U.S. market,” the report adds. “We did see salary growth in markets outside of the U.S., as many markets (e.g., Europe) begin to catch up to U.S. salaries, which have far outpaced global peers in recent years. Still, while many firms aim to achieve parity in purchasing power for employees across geographies, this isn’t often achieved, and the purchasing power of U.S. consultants is still stronger in 2024.”
Consulting Meeting
BREAKING THE BOUTIQUES
These trends – along with a firm-by-firm listing of bases, bonuses, and benefits – stem from the data collected by Management Consulted. For nearly two decades, the organization has collected compensation data from current and aspiring consultants through a variety of sources. These include verified website visitors, along with users of its interview prep and resume prep services. In some cases, Management Consulted receives data directly from the consulting firms themselves. Other times, pay data originates from written pay offers shared with Management Consulted.
As a whole, Management Consulted maintains a community of three million readers. Its annual Consulting Salaries Report features data from over 115 consulting firms, including data specific to both bachelor’s degree holders and MBAs (along with master’s degree holders and PhDs). Best of all, the data is made up of 2023 responses; it isn’t averaged against previous years’ data (with all figures converted to U.S. dollars). Bottom line: the data is current, reliable, and consistent according to Management Consulted – not “outdated or arbitrarily averaged” like salary data supplied by Glassdoor, PayScale, or Indeed.
The biggest takeaway from the 2024 report: Last year didn’t conform to the previous pay growth enjoyed by consultants. In fact, Management Consulted reports it was only the 2nd year – out of 16 – where starting pay didn’t increase for new hires. Compare that to the previous three years, where growth spiked at roughly 10% year-over-year. That said, the pain wasn’t doled out equally in 2023, as boutiques continued to struggle against increasingly fierce headwinds according to Management Consulted.
“Established consulting firms drive a lion’s share of the overall industry growth through organic and inorganic means. This in turn allows them to dramatically outpace the competition in terms of the max compensation they offer (e.g., through performance bonuses and profit sharing), as well as extend lifestyle perks like unlimited PTO and limited travel. At the same time, boutique firms were hit harder by last year’s declining demand for services, and the proliferation of in-house strategy groups at large corporations continues to limit the growth of a fragmented market of boutique players.”
“At Bain, we really do try to make everyone better for having worked with us.” _ Keith Bevans
BAIN VS. MCKINSEY VS. BCG
Another trend, Management Consulted observes, is who and where consulting firms are hiring. In particular, they are increasingly gravitating towards technical specialists and candidates from smaller name programs. For example, Management Consulted cites McKinsey & Company, which has extended its net to 370 schools, with fewer than 20% of hires coming from the MBA ranks. That doesn’t mean McKinsey MBAs – or peers at Bain & Consulting and the Consulting Group – aren’t raking in big paychecks early on.
Technically, McKinsey paid the lowest of the ‘Big Three’ in total starting compensation for MBAs and PhDs. The $267K figure reported by Management Consulted matched the 2023 average – though lower than $250K and $230K numbers from 2022 and 2021 reports respectively. Among the MBB, Bain & Company led the pack in MBA first year total compensation at $285K, the same total as 2023 (and a $49K leap over the 2021 report). In between, you’ll find the Boston Consulting Group (BCG), where MBAs pulled in $270K total according to Management Consulted’s 2024 report. Again, this mirrored the 2023 report, with BCG first year hires reporting $236K two years earlier.
How do MBB firms compare in various measures? Bain & Company offers higher starting bases at $192K, $2K more than their MBB counterparts. That said, Bain MBA hires can collect up to $63K in first year performance bonus, much higher than either BCG (up to $50K) or McKinsey (up to $40K) according to Management Consulted. While sign-on bonus remains $30K across the three firms, each offers distinct perks. Bain includes 25 PTO days in their first-year package, higher than either McKinsey (19) or BCG (15). In terms of relocation, Bain covers $8K for moves under 600 miles from the university and $16K above that mark. McKinsey budgets up to $10K for relocation, while BCG includes an interest-free loan for relocation. When it comes to 401K, Bain and BCG contribute $8K and nearly $11K respectively –numbers lower than McKinsey, where there is a 7.5% match (which comes to over $14K in base pay alone). Near term, McKinsey also provides a 50% tuition reimbursement to returning interns. Long term, Bain opens up profit sharing after three years.
Since base pay and sign-on bonuses are rarely negotiable, firms dangle unique perks to distinguish themselves among MBA or PhD graduate. Want unlimited PTO? Check out Ernst & Young and EY Parthenon (with KPMG and Maine Pointe holding their own with 30 and 29 days of PTO respectively). Looking for your second-year of tuition to be covered? ZS Associates and Deloitte’s Strategy and Analytics practice covers that for returning interns. Got debts and need cash right away? Accenture Strategy offers a $35K bonus supplemented by a $17,500 early sign-on bonus. Alix Partners and XY Parthenon does that same at $35K and $10K and $30K and $10K respectively, while Analysis G plops down a lump $45K sign-on sum. If you plan to bet on yourself, Kearney goes as high as $65,000 on performance bonus, while Galt & Company maintains an uncapped performance bonus that is “at least $60,000.” At the same time, L.E.K. Consulting includes up to $42K in profit-sharing to start, while Stax includes an equity award after a team’s manager is promoted.
Next Page: Undergraduate Pay, Intern Pay, Lifetime Pay, and More…
McKinsey clients contributed 20% of global GDP growth in 2022
PAY FOR BACHELOR’S AND MASTER’S DEGREE HOLDERS
Maybe the biggest surprise in this year’s report? The MBB firms don’t deliver the highest entry level packages for MBAs. That honor is reserved for Kearney, where the maximums hits $188K (Base), $65,800 (Performance Bonus) and $35,000 (Signing Bonus). In fact, when it comes to the highest achievable pay packages, Bain & Company ranks just 4th, behind Alvarez & Marsal and Alix Partners as well – while barely edging out Accenture Strategy and the Analysis Group.
In the 2024 Consulting Salaries Report, Management Consulted also combined graduates Holding undergraduate and master’s degrees. This is similar to its pairing of MBAs and PhDs due to their similar starting pay packages. Comparing the two segments you’ll notice a daunting chasm between MBA and undergraduate pay packages. That includes the high end of the pay scales between MBAs and undergrads: Base ($192K vs. $112K), Performance Bonus ($63K vs. $30K), and Signing Bonus ($35K vs $5K).
In the latter segment, consultants actually lost ground in pay among MBB firms. Bain again topped its MBB rivals in starting total compensation for bachelor’s and master’s degree holders at $140K. While this matched the previous year, you can’t say the same for McKinsey ($135K vs, $147K) or BCG ($137K vs. $140K). Still, in the MBB, undergraduates enjoyed similar benefits to their MBA counterparts. McKinsey hires received 19 PTO days or $10K for relocation expenses. At the same time, Bain and McKinsey carved out $5K payments for this segment to cover housing allowances.
At the Big Four – Deloitte, Ernst & Young, KPMG, and PwC – pay didn’t deviate much from the previous year. At PwC Strategy& and PwC Consulting, total compensation hasn’t budged from its $132K and $102K marks in three years! Over the past two years, just two firms – Ernst & Young S&O and KPMG Consulting – have increased total compensation by $15K over the past two years. In fact, you won’t find a Big Four or MBB among the three-highest paying consulting firms to the undergraduate and master’s sector. Instead, Alvarez & Marsal boasts the highest potential package here at $185K, which includes a $149K max base, $51K max performance bonus, and $5K max signing bonus. Accenture Strategy) and OC&C round out the top three for max compensation, with Bain & Company clawing its way to 5th.
INTERN PAY
While pay may be lower starting out for bachelor’s and master’s degree holders, consulting firms don’t skimp on perks for them. ZS Associates embeds an $18K cost of living adjustment in its package. Cornerstone Research covers 100% of moving expenses (along with four nights in a hotel). West Monroe and Mercer Management can pitch unlimited PTO, with KPMG and Targus Consulting countering with 30 days each. After three years, Ernst & Young tacks on a $50K retention bonus. And FTI Consulting contributes an overtime bonus. When it comes to bases, there are two firms – Ernst & Young and Riveron – paying more than $100K. In terms of signing bonus, NERA Economic Consulting pays more than anyone else in this sector at $20K.
Before there are job offers, consulting firm test prospective hires during internships. Like starting pay packages, internship compensation runs the gamut. In the report, Strategy& posts the highest hourly pay for bachelor’s and master’s degree holders, paying interns $48 per hour (plus overtime). The rate is $45 an hour at EY Parthenon (plus a $3K signing bonus) and $41 an hour at Simon Kucher & Partners. Similarly, Alvarez & Marshal hits the $41 an hour mark – not counting overtime at 1.5 times that. Among lump sums, McKinsey outpaces BCG by a nose ($21,250 vs. $21,154), though BCG tacks on a $10K bonus for interns who were previously part of its Growing Future Leaders program.
Among MBAs and PhDs, few firms entice prospective interns with sign-on bonuses. Simon Kucher & Partners and The Chartis Group were among the few firms doling out bonuses to MBA interns, paying an industry high of $5,000. Instead, many firms chose an hourly rate, led by FTI ($75), KPMG ($66), and West Monroe). Among the MBB, Bain MBA interns pull in the highest sum at $40,000, edging out McKinsey ($36,923) and BCG ($36,538).
BCG’s New York office at 10 Hudson Yards – overlooking the Hudson River. Photo by Anthony Collins
A LOOK AT LIFETIME EARNINGS
The 2024 Consulting Salaries Report features Another value-add: lifetime earnings in consulting. Management Consulted plots out a career that includes 10%-20% raises and promotions every 2-3 years. That translates to $220K-$240 bases and $100K-$140 performance bonuses when MBAs become managers or project leaders by the end of Year 3. Fast forward two more years and their bases will have risen to $275K-$350K, accompanied by bonuses ranging from $150K-$250K. Within eight years of starting, consulting firms expect their hires to move into junior partner or principal roles, which comes with $375K-$450K bases and bonuses that can exceed $500K. By the time, they reach senior partner or director – a decade or more after joining the firm – MBAs should receve bases and bonuses that eclipse $500K.
What does that mean in real numbers? For one, MBA degrees bases matter. Take a $190K starting base – a high mark at an MBB– compared to the $175K a candidate might earn at Deloitte or Ernst & Young. At an MBB, MBA consultants would clear $1,160,000 over their first five years in base alone with 10% annual raises, nearly double than their counterparts with bachelor’s or master’s degrees over that same period ($683,771). Factor in annual performance bonuses (potential $40K-$60K vs, $18K-$22K) and the difference couldn’t be more stark. That said, the gap between the MBB and the Big Four – at the MBA level – isn’t as pronounced. Compare a $190K MBB base vs. a $175K Big Four base. Over the same five-year period with consistent 10% raises, the total pay difference is just $92K – numbers that can be easily narrowed by stellar performance that produces higher raises and bonuses.
That said, Management Consulted is careful to note that the highest performance bonuses are divvyed out to just the top 5%-10% of consultants. In addition, many firms maintain a up-or-out policy, with expectations growing with each step up. Despite this, the industry offers a pathway to bigger roles, as consultants often enjoy a 12%-20% increases in pay after leaving their firms according to Management Consulted.
“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,” the 2024 Consulting Salaries Report adds. “Regardless, salary growth is substantial for each promotion you receive at a consulting firm.”
COMPETITION GALORE
What can consultants expect to see in the 2025 Consulting Salaries Report? In the short term, Management Consulted projects continued slow growth as large players continue to expand capabilities and retain talent at the expense of boutique firms. On top of that, Management Consulted doubts the labor market will explode in 2024, meaning firms will feel little incentive to boost pay beyond nominal increases. Still, the report does lay out one labor group who could come out winners in this cycle.
“We still expect that firms will begin to hit the upper limits of their pricing power within the next decade as the competition between established players grows ever fiercer. This may spur firms to begin to prioritize cheaper, pre-MBA hires as opposed to more expensive post-MBA ones. We believe this is already playing out in the market, as evidenced by the fact that full-time MBA hiring decreased at a higher level in 2023 than full-time pre-MBA hiring.”
Another factor cited by Management Consulted is labor competition with the tech and financial sectors. As interest rates begin to fall, Management Consulted anticipates an accompanying rise in IPOs and acquisitions. By the same token, th3 decrease in the cost of capital could spur the tech industry. Hence, both sectors will be prowling for talent, creating competition that potentially pushes consultant pay higher. While consulting firms could lose talent to tech and finance, these losses will be more than offset to the industry’s allure.
“The competition for these open roles will be fierce,” according to the 2024 report. “Demand for open consulting roles will far outpace the supply of open roles, as hiring is not going back to the frothy environment of 2021 and 2022. Combine this with the fact that consulting is still a “safer” option than banking and tech; with more eager candidates than ever before chasing the prestige, pay, and relative stability of a consulting job, the consulting job market will be even more competitive this year.”
WHY TOMORROW WILL BE BETTER
Big picture, Management Consulted believes the consulting industry holds an enviable position. Despite a slowdown in 2023, the 2024 report notes that demand still hovers above pre-pandemic levels due to “increased digital, S&O, ESG, and supply chain work.” That doesn’t mean the industry is poised for a major rebound, however. One reason: fewer competitors mean fewer options for consumers and consultants alike.
“Industry growth is still concentrated in a small core of established players, and when the growth of these entities slows, it has an outsized industry impact,” according to the 2024 Consulting Salaries Report. “Furthermore, the specter of economic uncertainty still looms, decreasing the number of market entrants. Add it all up, and there continues to be less overall competition in the market than there was ten years ago.”
Don’t write off the consulting industry quite yet. After all, hard times create customers in need and consultants ready to lead. More than that, the industry fundamentals are solid and firms have taken the past year to ready themselves for what’s next.
“It’s a great time to break into the industry,” the report adds. “Comp should be on the rise in 2025, and the lifestyle is actually better than it was 5-10 years ago. How? Travel is down, utilization is coming down from pre-pandemic highs, and salaries are still significantly higher than 2019. Put it all together, on top of the professional development and exit opportunities, and that’s a pretty great value proposition for consulting.”
To download the full 2024 Consulting Salaries Report, which includes pay details for 115 consulting firms, click here.
