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Starting salaries in consulting positions with a bachelor's degree after bonus (analyst position) range from $40,000 to $80,000. Starting salaries with an MBA degree range after bonus (associate position) range from $90,000 to $180,000 (the recent median at top schools was $145,000 - one of the highest of any profession). These salaries vary with firms and with the region of the country you are in.
Typical Management Consulting salaries are as follows.
The typical deal to start for an undergraduate is a position as an Associate Consultant with a base salary of around $60,000 plus a signing bonus of $5,000 to $10,000.
The compensation is higher for MBAs. A typical MBA graduate is about 28 years old and has one to four years of prior work experience and two years of business education. A typical MBA would enter a consulting firm at a mid-level with a base salary of $125,000 and a signing bonus of $20,000. In addition, a typical relocation bonus would be $10-15K and at year end a reasonable bonus would be $30,000. In total, the first year total compensation would be in the $170,000 to $200,000 area.
Salaries tend to be higher in the top-ranked strategy consulting firms because these firms generate more revenue per consultant than do shops focused on operations, implementation and systems.
As careers progress, consultants end up making somewhat less than investment bankers but more than persons in most corporate positions. Consultants get more variety, less punishing work hours, a better training in business and broader exit opportunities. Bankers get worse hours, more money but also can have much less travel. Bankers also get to engage with the same clients for many years while consultants will generally move from client to client situation over the years.
The following aggregate placement for Harvard Business School shows the ups and downs of consulting industry recruiting and salaries (mainly up).
One question that often comes up is whether the same firm will make different offers at different schools. If you knew this, it would be helpful in the negotiation process (assuming you were being lowballed). There is remarkably little evidence that this happens. So, for example, when Accenture offers $119,000 at MIT and then turns around and offers $65,000 at a Purdue, what is going on is that different parts of the organization are making the offers for different jobs.
It is widely believed that entry level salaries among the top five or six firms are quite close to each other. One person we talked to mentioned that his firm would automatically give out raises to entry level consultants when it was learned that another rival firm had raised salaries.
This is particularly evident in the level of the median consulting salary and signing bonus offered to the MBA class of 2008 at top schools. Note that it was at or close to $145,000 across the board. In part, this was because McKinsey's deal was $145K to signing MBAs and they were a heavy recruiter.
Salaries in consulting should not be quickly compared to those in business and corporate management because the work is very different. Corporate managers have broader experience and administrate and implement. The work of management consulting, in contrast, is information collection and analysis. A skilled consultant will be able to use their expertise to analyze and integrate information to formulate courses of action to solve critical problems.
While there is substantial growth in expected compensation among consultants as they become more senior, starting wage rates are well above the national average for college students (obviously these data include more than college students though).
Salaries for senior-level consultants tend to be much higher than those for lower level consultants. Total compensation including bonus and other fringes would increase this significantly. For example at one office of a prominent Bix 5 consulting firm, the total compensation for partners ranges from $300,000 a year to over $1,000,000 a year.
Is Consulting Pay Related to the Size of the Firm?
In many businesses, pay is lower in smaller firms. For example, Robert Half International reports that in smaller accounting firms, partners earn significantly less than partners make in larger firms. An accounting partner (and for that matter a corporate administrator) is compensated for their management skills. Managers in bigger firms typically have larger responsibilities which translate to increased salaries. Interestingly, the consulting business does not work that way. The reason is that the best people may prefer the autonomy and impact that they can have in a smaller firm. The responsibilities of a consultant are significant, regardless of the size of the practice. Its much more like being an attorney; an attorney in a small firm can have a very large case. The largest firm in management consulting is Accenture. They do not offer the highest entry-level salaries in the industry. It is readily apparent from the literature that there isn't necessarily a relation between consultant pay and the size of consulting firms.
Why Do Consultants Get Paid What they Do?
The product consultants produce is ideas, advice and suggestions. Problem-solving and new ideas are essential to creating a successful, well-led and functional organization. Consultants add value by helping organizations do what they do better, faster, and cheaper. That's why most successful consulting firms rely on a small cadre of highly skilled, thoughtful professionals. A few really bright people can create much more value than a larger group. Consulting is a cerebral business where understanding, expertise and analytical skills are highly valued. Increasingly, consulting is done in the context of relationships which involve working with an organization over many years to ensure continued monitoring, discussion and implementation of new ideas. Because consultants are hired to produce results and because they have a high profile in a client organization, consulting firms typically hire the "best and the brightest." Most firms in consulting are relatively small, but use persons with superlative experience. Some of the brightest minds working for government and business (ranging from Henry Kissinger to Michael Hammer to Tom Peters) are in small consulting firms.