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December 11, 2019

Consulting Salaries in 2019 - What to Expect at Top Firms

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Consulting salaries are notoriously generous. Let’s be honest: sky-high salaries are realistically the single main reason why so many candidates are attracted to management consulting - and what makes the subsequent selection process quite so competitive.

A consulting role in the US can come with a six-figure salary in year one – base pay for undergraduates can easily be up to $90,000, with an MBA or PhD grad starting on salaries often rising above $170,000. If that isn’t impressive enough, you can expect to add on another 5-15% of performance bonuses. Of course, this is just for starters - Bain, BCG and McKinsey salary progression is rapid, and those staying with an MBB firm can expect pay increases that far outstrip most other industries

Now, whilst they are never going to be peanuts, consulting salaries vary significantly across a whole set of variables. Total remuneration is also the combination of a few different components. In this article, we’ll start by breaking down how salaries in the consulting world are structured and how they can vary both at a single level and throughout your career path. We’ll also consider how you can maximise your own earning potential in consulting. Towards the end of the article, we also include a comprehensive listing of real salary details of all the major consulting firms.

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Changing Times: Revenues and Salaries

Writing in 2019, consulting as an industry has also been in significant flux in recent months and years. The burgeoning role of various information technologies - including the rise of AI - across seemingly all sectors has meant that consultancies have had to adapt their offering to a new set of client demands. The results of these changes are still playing out, but – in terms of recruitment – have led to an uptick in hiring technical specialists and individuals from non-target schools.

Regardless of any qualitative changes, though, the consulting industry as a whole is in robust health, with strong revenue growth from the major players of up to 15%. Whilst increased revenues have not translated to any movement in undergrad-level consulting salaries, changes in recruitment demand have led to starting pay for MBA/PhD level candidates seeing notable rises.

How consulting salaries are organized

A standard consulting salary is made up of two main components - base salary and bonuses. Bonuses can be subdivided into on-off singing and relocation bonuses and annual performance bonuses.

Let's take a look at these different components and get a feel for the values they are likely to take at different levels in the consulting career ladder:

Base Salary

Base salary is the fixed amount of money an employee receives in exchange for their work. The annual wage is stated within the contract and a percentage of these earnings are paid towards your taxes.

The table at the end of this section shows both base salaries and bonuses for various levels of the typical consulting salary progression. There, it will become apparent that whilst, for lower the lower levels, base salary will make up the overwhelming majority of total pay, as consultants get promoted, bonuses grow until the point where they can overtake base salary in their contribution to total remuneration. As such, we need to take a closer look at bonuses!

Bonuses

Competing for the top talent, consultancies offer much more than simply a high base salary, the bonus structure is what really determines your full income.

The three main types of bonuses are signing, relocation and performance. While signing and relocation bonuses are one-time payments received at the beginning of their time at a company, performance bonuses and related profit sharing systems are the genuinely important determinats of an employee's long-term income within a consulting company.

1. Signing

This is a set bonus that usually depends simply on the position and does not markedly fluctuate between candidates for a particular job. Exceptions are made for highly desirable candidates that were headhunted or made a significant impression during the recruitment process (a good reason to take case interviews seriously!). The size of a signing bonus for these candidates can reach 10-20% of the base salary.

2. Relocation

In addition to signing bonuses, candidates who have to move to take up a position will often receieve a specific relocation bonus. Typically, there will be a set maximum relocation bonus, with the fraction of that amount received depending upon the distance of the move and the candidate's future position. These bonuses are obviously particularly useful for recent graduates moving to expensive cities.

3. Performance

Performance bonuses can depend on the company’s overall revenue or employee’s individual performance. If the bonus depends on the performance/profit of the company as a whole, a certain percentage of that profit will be divided amongst the employees. Otherwise, there may be an intermediate system where there is a set maximum bonus received by the top 5-10% company’s performers, whilst others receive 20-70% of this figure.

Payment Schedule and Tax

Depending on the company’s policy, all three types of bonuses can be delivered in advance, on a set date, or distributed within a period of a few months or years. Tax can be taken before the bonus is cashed or from future incomes.

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Base Salaries and Bonuses for Levels of Promotion

The table below shows base salaries and bonuses to be expected by employees in different roles in US consulting firms. This information will also act as a good relative guide for other geographies.

Table showing average pay in US dollars for different levels of seniority in the management consulting career ladder

Factors Determining Your Pay

The following factors will be major determinants of the

Career Progression

Now, you might be wondering what it takes to earn those higher salaries further up the career ladder. How do you actually make it to the loftier heights of the Bain, BCG or McKinsey salary progression? A short answer would be "time and hard work", but let's expand on that.

At entry level, candidates that come straight out of university and do not have any work experience are normally offered the starting role of analyst. This is true for both Bachelor’s and Master’s degree holders. That said, MSc graduates may be offered more demanding technical positions, which are higher on the career ladder and may bring a higher salary. MBA and PhD graduates usually begin their career with a consultant job title, with the larger pay packets seen above.

If the candidate has work experience, is a returning intern, or has shown outstanding results in case interview, they may be trusted with a higher role or an increased starting salary or signing bonus.

As far as career and thus salary progression goes, an employee is expected to spend an average of 1.5 to 3 years at each level. If you want to stay and become a partner, this is possible within around ten years (and a lot of hard work).

Consulting career transitions can be both vertical – that, is being promoted up the career ladder we have already discussed. However, transitions can also be horizontal - changing teams or areas of focus. Horizontal transitions might affect salary or exit opportunities, discussed below.

Promotion and Negotiation

You will notice in the table above, that the approximate consulting salaries we specify are within increasingly wide ranges going up the career ladder. A primary reason for this phenomenon is that managers and partners somewhat determine their own salaries via negotiation with the firm.

By contrast, individuals at entry and other, lower-level positions will have much less input into what their pay will be. Rather, organisations regulate the pay they offer as a function of both internal and external factors such as profitability, competition and the candidate pool.

Specialisms

The different focuses or specialisms which a consultant might also affect pay and explain some fo the variation in salaries within levels of promotion.

On average, those in IT Consulting, Business Strategy, and Change Management earn roughly 15% more than those in Business, Financial and Data Analysis.

Geography

Location is major factor determining consulting salaries. The same firm will often pay very different salaries in different countries. For example, a consultant working for McKinsey New York might very well earn almost twice as much as a colleague doing the same job in McKinsey London (moreso taking tax into consideration). Another peer at the same level on the McKinsey salary progression - but based in the Dubai office - might out-earn both.

Even within a single country, wages can depend strongly on location. Generally, the highest earnings await consultants in Los Angeles, San Francisco and Minneapolis. Mid-range, but competitive wages are in New York, Dallas and Houston. Washington and Arlington offer wages 40% lower, than those in Silicon Valley.

As we note below, you should chose the offices you apply to wisely in terms of cost of living versus pay.

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Exit Opportunities

In effect, your income as a result of working as a consultant does not stop when you cease to be employed by a consulting firm. One of the main advantages of consulting is the significantly enhanced employment opportunities and earning potential in other industries. For most, consulting will be one part of a broader career trajectory.

Many employees decide to switch their career path and leave consulting for other sectors, such as finance, in pursuit of higher pay and more sustainable working hours. This move can be made after two to (ideally) five years in the consulting world.

Enough consultants take this option for it to be something of a problem for consulting firms, who struggle against a constant haemorrhaging of talent to other sectors. The need to stop losing useful, experienced staff will be one of the reasons underpinning the particularly high annual pay increases observed in consulting – in short, they want you to want to stick around!

Even so, experienced consultants still typically see a 30 %increase in pay moving into other industries – generally whilst gaining a significantly improved work-life balance. It is worth noting here that those moving into certain areas of finance will actually take a hit in terms of work-life balance (or lack thereof…). However, they will do so in exchange for even larger increases in pay.

Great exit opportunities are not a given and should ideally be planned in advance. If you plan to leverage consulting experience to move into a certain sector, it will this might impact the consulting firm and/or office locations you prioritise during your applications. All this is discussed in some detail in our article in the differences between the major consultancies.

Up-or-Out

Note that exit might not actually be entirely your choice...

The vast majority of those who enter consulting will not be around long enough to make partner. This might be because they make a positive choice to leave the profession for another industry. However, a lot of firms will operate an “up-or-out” policy, whereby those not performing well enough to be promoted will not be allowed to simply remain at their current level, but will be encouraged to seek work elsewhere and/or let go.

Of course, employees will be capable of seeing this coming,  so it is clear that a certain fraction of planned exits will be in the knowledge that the individual's time in consulting would have likely to come to an end soon anyway.

Internship salaries

We've looked at entry-level salaries, but what about many future consultants' first forays into the job - internships?

Being the first step into the consulting world for existing students and being available only to them, internship salaries are a separate category. The most desirable companies offer generous compensation that is aligned with their starting salary rates. Internships are typically 9-12 weeks in the US, rising to 16 weeks in Canada and Europe. Compensation for that time will run between $10-16k for undergrads and $18-30k for PhDs.

Internship salaries do not significantly vary within companies. Rather, the pay received will depend upon your qualification level and the length of the project, as well as the specific firm and the location.

Particularly successful interns can expect to be offered a permanent position with the company. Returning interns may also receive a higher signing bonus or similar reward at the beginning of a full-time job.

Making Decisions: Maximising Your Income

As we have seen, consulting salaries differ significantly in line with several different variables. As such, it is worth investing some time to work out how to maximise your remuneration. You might as well get paid as much as possible for those long hours, after all!

Don’t be lured by high singing bonuses

When comparing wages, the main factors to consider are the base salary and performance bonuses. These aspects should have much more weight than one-time signing and relocation bonuses when choosing the company. Whilst these are pleasant add-ons, basic salary and performance bonuses will be the real determinants of your future income.

It is also important to understand how a consultant’s salary is going to grow in the upcoming years. Staying at the same position, a well-performing employee can expect 10-20% pay growth every upcoming year, with promotion increasing these numbers significantly.

Chose Your Office Wisely

As noted above, salaries will vary with location and you should consider this when you are deciding where to apply. This is particularly important as variation in pay will not always track with living costs. For example, London has anomalously low salaries as compared to its cost of living.

If you are happy to live in a less major city, you will often enjoy a great ratio of pay to living costs, with a very high standard of life as a result. Of course, especially if you are younger, you might not be willing to sacrifice the particular advantages of the big city, but you should make that call knowingly at least.

It is also important to note that the office you work in might impact your exit opportunities in particular industries - and thus you post-consulting earning potential.

Actual Numbers

Now, we've talked a lot about what can push salaries up and down, but what about some hard numbers?

Below, we present a table of US consulting salaries for all major companies. In other geographies you can expect relative levels of remuneration to be maintained, even if pay in that country tends to be higher or lower generally.

We have done our best to dig through the internet and leverage our contacts to make this lisiting as comprehensive and up to date as possible. However, consultancies typically do not make their pay packets public, so it will always be difficult to have 100% complete information. If you have any corrections or want to fill in some missing information, just drop us an email and we'll update!

MBB firms are separated and listed first, as they tend to be the figures most readers are interested in.

Finally, bonuses are generally noted at their maximum levels - results may vary if you are not a good performer


McKinsey Salary Structure:


·      Associate


Base wage - $83,000


Signing bonus - $5,000


Relocation compensation - $10,000


Performance bonus - $18,000


Retirement - 7% of annual income


·      Engagement manger 


Base wage - $152,500


Signing bonus - $25,000


Relocation compensation - $9,000


Performance bonus - $35,000


Retirement – &% of income, but up to $11,900


·      Managers salaries at McKinsey begin at $250,000 with bonuses negotiates individually


·      Principals earn between $500,000 and $800,000 + Bonuses


Bain Salary Structure:


·      Associate


Base wage - $83,000


Signing bonus - $5,000


Performance bonus – up to 15% of base income


Vesting – after three years, approximately $7,500


Retirement - 4,5% of the base salary contributed to a retirement fund


·      Consultant


Base wage - $148,000


Signing bonus - $25,000


Performance bonus - $40,000


Vesting – in there years, $14,000


Retirement - 5% salary contribution to the retirement fund, up to $8,000


·      Managers get $350,000 salary topped up with an individual bonus


BCG Salary Structure:


·      Associate


Base wage - $84,000


Signing bonus - $5,000


Performance bonus - $16,800


Profit sharing - $4,500


Retirement - Profit sharing is deposited into 401k account


·      Consultant


Base wage - $147,000


Signing bonus - $30,000


Relocation compensation - $8,000


Performance bonus - $44,100


Retirement – Profit sharing is deposited into 401k account


A.T. Kearney Salary Structure


·      Analyst


Base wage - $75,000


Signing bonus - $5,000


Relocation compensation - $10,000


Performance bonus - $15,000


Firm performance bonus – 10% of firm’s performance distributed within employees, up to $7,200


Retirement - 5% of overall earnings payed into 401k retirement fund


·      Consultant


Base wage - $147,000


Signing bonus - $25,000 ($35,000 for returning interns),


Relocation compensation -  $10,000


Performance bonus – $44,100


Firm performance bonus – 10% of firm’s performance distributed within employees, up to $7,200


Retirement - Up to $8,000 contributed to 401k


Deloitte Salary Structure


·      Analyst


Base wage - $88,000


Signing bonus - $12,000


Relocation compensation - $5,000


Performance bonus – up to $15% of base income


Retirement - 6% of overall income payed to 401k


·      Consultant


Base wage - $145,000


Signing bonus – $25,000 (returning interns receive additional $17,500 and early signing guarantees additional $20,000. Returning interns also receive a full 2nd year tuition compensation)


Relocation compensation – up to $10,000


Retirement - 1,5% of income is payed to a retirement fund


EY Salary Structure


·      Associate


Base wage - $75,000


Signing bonus - $3,000 - $7,5000


Relocation compensation - $2,000


Retirement – 6% of overall earnings


·      Consultant


Base wage - $145,000


Signing bonus - $25,000


Relocation compensation - $5,000


Performance bonus - $31,700 (maximum)


Parthenon - EY Salary Structure


·      Associate


Base wage – $92,000


Signing bonus - $10,000


Relocation compensation – $2,000


Performance bonus - $10,000


·      Consultant


Base wage - $170,000


Signing bonus - $35,000


Relocation compensation - $2,000


Performance bonus - $9,000


L.E.K. Salary Structure


·      Associate


Base wage - $74,000


Signing bonus - $7,500


Relocation compensation – $2,500


Performance bonus – up to 20% of base salary


·      Consultant


Base wage – $150,00


Signing bonus - $25,000 ($50,00 for returning interns)


Relocation compensation – $5,000


Performance bonus – $25,000


Profit sharing – up to $30,000


IBM Salary Structure


·      Consultant


Base wage - $70,000


Signing bonus - $7,000


Relocation compensation - $3,000


Performance bonus – up to 12% of base salary


Retirement – 5% of base salary payed into 401k


·      Senior Consultant


Base wage - $147,500


Signing bonus - $25,000


Relocation compensation - $6,500


Performance bonus - $14,750


KMPG Salary Structure


·      Associate


Base wage - $68,000


Relocation compensation - $2,000


Performance bonus - $8,160


·      Consultant


Base wage - $145,000


Signing bonus - $35,000


Relocation compensation - $5,000


Performance bonus - $25,000


PwC Salary Structure


·      Associate


Base wage – $72,000


Signing bonus - $5-10,000


Relocation compensation – $2,000


·      Senior Associate


Base wage - $134-140,000


Signing bonus - $25,000


Relocation compensation - $2,00


Performance bonus - $27,000


Strategy& Salary Structure


·      Associate


Base wage - $90,000


Signing bonus - $10,000


Relocation compensation - $8,000


Performance bonus – up to 10% of base salary


Retirement - 6% of base salary and up to 5,7% of the bonus contributed to 401k. 5-year vesting period


·      Consultant


Base wage - $147,000


Signing bonus - $25,000


Relocation compensation - $3,000


Performance bonus - $47,000


Retirement – 6% of base salary and part of a bonus contributed to 401k. 5-year vesting period


Student loan repayment - $1,200/year for six years, or until employee becomes a manager


Accenture Strategy Salary Structure


·      Analyst


Base wage - $77-85,000


Signing bonus - $10,000


Relocation compensation - $5,000


Performance bonus - $8,500


Retirement – 6% overall income payed into a retirement fund after a year of work


Stock – 15% discount on buying Accenture stock


·      Consultant


Base wage - $147,500


Signing bonus - $25,000


Relocation compensation - $8,000


Performance bonus - $44,400


Retirement – 6% overall income payed into a retirement fund after a year of work


Stock – 15% discount on buying Accenture stock


Tuition compensation – up to $80,000 after taxes


FTI Consulting Salary Structure


·      Associate


Base wage - $68,000


Signing bonus - $7,000


Relocation compensation - $1,000


Performance bonus - $10,000


Alvarez & Marshal Salary Structure


·      Associate


Base wage - $75,000


Signing bonus – $5,000


Performance bonus - $19,000


Mercer Salary Structure


·      Associate


Base wage - $65,000


Signing bonus - $3,000


Relocation compensation - $10,000


Performance bonus - $18,000


Retirement – 7% of annual income payed into a retirement fund


·      Consultant


Base wage - $110,000


Signing bonus – $25,000


Relocation compensation - $9,000


Performance bonus - $35,000


Retirement - 7% of annual income payed into a retirement fund


Huron Salary Structure


·      Associate


Base wage - $67,500


Signing bonus - $5,000


Relocation compensation - $2,000


Performance bonus – 10% of base income


Retirement - 7% of annual payed to 401k


Travel Bonus - $3,750


Stock – 25% of personal investment is matched up to $20,000


Booz Allen Hamilton Salary Structure


·      Associate


Base wage - $75,000


Relocation compensation - $5,000


Performance bonus - $11,250


·      Consultant (Dubai)


Base wage - $120-145,000


Relocation compensation - $25,000


Performance bonus - $36,250


Housing Allowance - $32,000 (if married of has a dependable family)


ZS Associates Salary Structure


·      Associate


Base wage - $75,000


Signing bonus - $5,500


Relocation compensation - $4,000


Performance bonus – up to 10% of the base salary


Retirement – 3% match to 401k


IMS Salary Structure


·      Consultant


Base wage - $130,000


Signing bonus - $25,000


Relocation compensation - $8,000


Performance bonus - $16,250


Infosys Structure


·      Consultant


Base wage - $122,500


Signing bonus - $20,000


Relocation compensation - $3,000


Performance bonus - $25,000


Oliver Wyman Salary Structure


·      Associate


Base wage - $80,000


Signing bonus - $10,000


Relocation compensation - $2,000


Performance bonus - $16,000


Kalypso Structure


·      Consultant


Base wage - $124,000


Signing bonus - $15,000


Relocation compensation - $3,000


Performance bonus - $15,000



Concluding Thoughts

Consulting salaries will vary somewhat over time as the pool of talent and the fortunes of the industry fluctuate. We will keep this article updated with the best current information.

However, it must be noted that what it takes to earn these salaries does not fluctuate over time. The bar which you must clear to be employed at a top consulting firm remains unchanged and remains very high - in short, you must be the very best.

Accordingly, the selection process is brutal and you will need to do everything within your power to make it through. In particular, consulting case interviews are a qualitatively different and vastly more demanding than anytiung you are likely to find in other industries.

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