How much management consultants earn – it’s higher than you think

Something a lot of people are dying to know.

The data is what Ive gathered from my own experience, current consulting friends, and public sources. They wont be 100% accurate but should be pretty close.

2 valuable resources on consulting include my blog – Management Consulted – and wallstreetoasis.com

Here are the numbers.

1st year out of college undergraduate:

Base salaries: $50-65K Signing bonuses: $5-10K Relocation/moving expenses: $5-10K Year-end bonus: $5-10K

Thats an average of $70-75K in first year compensation. As a summer intern, you can expect a comparable, pro-rated salary (minus the bonuses). Please note that this does not include retirement contributions.

First year out of business school/MBA:

Base salaries: $110-140K Signing bonuses: $20-40K Relocation/moving expenses: $10-20K Year-end bonus: $20-40K depending on firm

Thats an average of $160-200K in first year compensation. This does not include retirement contributions. My original estimates were a bit lower, but have been adjusted upward based on emails and the comments below.

Upward track through partner:

My numbers have a higher risk of being inaccurate as this is only from personal anecdotes, so if you have better information, please let me know.

Engagement manager/Project leader: $175-250K Associate principal/Senior project leader: $250-400K Partner/Principal: $500-800K Senior partner/Director: $1M plus At more senior levels the pay is increasingly variable and performance-based

How consulting salaries lose to finance:

At almost every position as a management consultant, your salary will be 30-50% lower than a comparable position in investment banking. This varies by year and median salaries in non-banking departments (such as research, asset management, sales & trading) are lower. The truth is simple: consulting is not a profession to make big bucks.

How consulting firms try to make up the salary gap with finance:

Better benefits – healthcare, life insurance, etc Retirement contributions – this one is important because at places like McKinsey, theyll contribute an added 5-10% of your base salary to your retirement funds, effectively a 5-10% year-end bonus! (A reader just informed me that his MBB retirement contribution starting fulltime in 09 was 4.5%, which is lower than Id seen in previous years) More generous expense and reimbursement policies, travel perks, etc

Hope you found that helpful. Good luck breaking into consulting.

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