Hi, I'm Jenny Rae La Roux, Managing Director of Management Consulted. And
we do an extensive salary report every year, where we cover multiple firms
and multiple positions. Today I'm gonna aggregate some of our learnings together,
so that you can understand how salary structuring works at consulting firms.
Let me start at the beginning. The beginning of every aspirational
consultants process, is to think about an internship. And consulting firms hire
interns mostly from two places. Juniors and undergrad, and MBAs in their first
year. The internships are summer internships and they're pretty similar.
They're paid at very different rates, but the structure is the same. The internship
is prorated for some of the strategy firms as a percentage of your overall
salary. It is usually not included with a signing bonus or with a bonus, unless you
succeed in the summer internship than the you'll receive a full signing bonus
for your full time salary. And then you're expected to work an unlimited
amount of hours for that pro-rated amount. Now many other firms like big
four firms, do pay by the hour for the summer. And so if you're going to do a
lot of overtime, those can be attractive places to work for the summer.
Interestingly, you do have full benefits when you're on the job in the summer but
there aren't bonuses, relocation, and other benefits like 401k matching that
kick in as an intern. All of that changes when you get hired full time. And so
undergrad full-time hires coming out of your senior year in undergrad, and MBA
full-time hires coming out of your second year of MBA, are paid very much
the same. And this is where the bells and the whistles kick in. You have your base,
but you also have your bonus and the target bonus is a pretty good
approximation of what you're likely to make. It's not like some firms that will
promised a certain bonus, and then scale back significantly.
You can certainly underperform, but most people don't, most people perform on the
target or slightly above the target. In addition, you have 401k matches.
Consulting firms are very generous with their 401k matches. In addition you have
relocation bonuses, you have signing bonuses, and then sometimes they're even
firm-wide profit sharing bonuses. So you have multiple different elements of your
compensation. On top of all of that, your travel will be entirely covered,
sometimes per diem, so you can pocket some of that of you're frugal. And
sometimes just on an expensed basis. But either way, you're going to get some
additional perks and benefits beyond the standards of your job. Now it starts to
get interesting when you move beyond those initial analyst roles, into
Engagement Manager or Manager Positions, where your compensation begins to be
scaled back on a guaranteed level, and adhering more to your performance basis.
You also, in some firms, begin to gain equity in the firms. And you will either
have to pay toward getting some of that equity, so you'll pay into it, or you'll
receive it as a portion of your compensation. Once you move up to the
final senior levels, the Partner, the selling levels inside the organization.
The ranks really begin to flip-flop. Your base compensation, levels out. And it's
still very attractive, it's in the high six figures,
but you're still working on bonuses that will become the majority of
your compensation. And your bonus will be contingent on the volume of projects
that you sell, the way that you up-sell them, the way that you cross-sell them with
other organizations, and projects that you work on as an expert that you didn't
sell. So there's a highly variable portion of compensation once you move
into the partner ranks. Consulting firms sometimes will require a buy-in, but not
always. Sometimes the buy-in will be staggered over time. So they operate a
little bit differently than engineering consulting firms, or law firms in that
way. It's important to understand two final things about compensation in
consulting firms. First of all, you can expect a pretty significant jump in your
base salary and commensurate to that, your bonus, in every year that you work
in a consulting firm. It's accelerated versus other places. So, it's 15 to 20
percent in a standard year, and then 30 to 40 percent in a promotion year, which
is usually every two to three years. So you have these huge accelerated jumps in
your compensation over time. The final thing that's really important for you to
understand, is that negotiating for consulting salaries is pretty unheard of
internally, and it's also unheard of when you come into a consulting firm. You
don't negotiate on the numbers, you negotiate on the position. Because the
positions are pretty clearly defined. This is meant to keep a team oriented
attitude where the people that are performing the same roles, are
compensated at the base in the same way. And they simply allow for your
performance feedback to be the variable portion of your compensation. Ultimately
there are these four levels: 1) Pre-mba and post MBA, which operate very similarly.
2) Managers who are a blend between the more junior style of compensation,
and 3) the more senior style of performance compensation.
4) And then finally Partners. Who are really incentivized along with how much they sell and how much they deliver for the firm.
If you're interested in joining a consulting firm, or want to know if your salary is fair,
where you're currently working, we would love to work with you.
If you're interested in doing a salary study,
across multiple firms we also can help with that. Just contact us at
www.managementconsulted.com