It's no secret that one of the things that attract many university and MBA seniors to the field of management consulting are high salaries and year-end bonuses. But what should you really think about when considering a management consulting salary package? The first thing to keep in mind is that the salary of a management consultant is usually not negotiable at the base salary level. Most firms, especially major strategy firms, want to keep salaries at a constant starting level for an incoming cohort. Compensation levels for management consultants' salaries are not flexible.
Other firms, such as PwC, for example, have a pay scale that varies by office. An associate in the PwC office in Atlanta would have a slightly lower salary than an associate in New York due to the higher cost of living in New York. Consulting firms usually don't even talk about salaries until their first offer letters are sent. However, once they are submitted, Bain, BCG and McKinsey sometimes “update starting salaries” based on salaries offered by other firms in this group of consulting firms. However, these “updates” are not always made.
Experienced employees have room for maneuver to negotiate the amount of their login bonus or relocation payment if they have a good reason (e.g. e.g.).However, experienced employees should not expect to be able to negotiate a substantial increase in their supply. Top consulting firms know that they have a strong reputation and that many people want to work for them. As an experienced employee with several years of relevant experience, the best thing you can do is to try to negotiate the level at which you enter the company.
Reaching a higher level would give you a higher base salary and a higher login bonus. However, in the end, consulting firms' compensation packages are fairly established. A lot of people wonder how COVID has affected consultants' compensation. This varies from company to company, but most top-tier consultants have been able to keep staff salaries the same, and partners are the most affected by their compensation. The focus of our consultant salary research was on the North American market. If you receive several offers from top-tier consulting firms, then you'll need to know how to compare them to each other.
As described above, some companies vary in their base salaries depending on the office. It is important that you know which companies do this and which have a salary for a level in a region. Generally, the salary of a Bain consultant, the salary of a BCG consultant, and the salary of a McKinsey associate will be the same regardless of the office that hires you. They only vary depending on the level at which you are hired (for example,. Large tier 2 and 4 companies, such as PwC, EY and Deloitte, vary compensation packages depending on the cost of living in different offices and the employee level.
In addition to a base salary, you will also be offered a significant performance bonus. However, this performance bonus will vary depending on many factors, most of which you can control and others you can't (such as the general demand for consulting services).So don't let a big number influence you without going deeper into that number. You should consider your first-year learning curve, the state of the business, and the way the company in question calculates its performance bonuses. The way performance bonuses are calculated varies from company to company, so if you have competing offers, it's important to write these things down so you know what to expect at the end of the first year.
If your performance bonus is based on the company's profitability, you should also ask how many consultants are “on the beach” or don't currently have staff hired by the client. Find out if that will affect your performance bonus. Generally, hiring teams are pretty good at hiring based on business needs, but no one can predict the state of business with precision, especially during COVID. Performance bonuses are an important part of the overall management consulting compensation package, so it's important to consider them when you receive an offer. Another important thing to consider is what percentage of the firm's consultants occupy the top level of its performance category. For example, let's say you receive an offer and your offer letter mentions that you can earn up to a 60% performance bonus.
Sign me up, right? What type of bonus do the rest of the staff receive? It's good to ask for and consider those statistics before assuming that you'll be at the highest level of paying a performance bonus. You'll also want to ask if you're eligible to receive bonuses right away. Login bonuses are another important aspect to consider when comparing compensation packages. This is where candidates discover that they have the most influence when it comes to negotiating. It's rare to be able to negotiate a base salary, but companies are more flexible with a single sign-on bonus, especially if the candidate has other offers on the table. It's important to note that some companies have amortization policies for their login bonuses.
Consultants offer high-salary packages to get the highest-performing candidates to work for them, but they also want to keep candidates long enough to recover the costs of hiring and training them. You may have to return a percentage of your login bonus or even the full amount if you leave the company before the specified time period. It doesn't look good to ask about amortization policy since it makes it look like you're thinking about leaving after a relatively short period of time. However, understanding these policies is essential when comparing offers from different consulting firms.
