Managementconsulted reports McKinsey and Bain raised their starting base salaries for MBA graduates to $192,000. Boston Consulting Group (BCG) will be starting its MBA graduates at base salaries of $190,000. The base salary will increase to $110,000 for associates who have four-year degrees. Bonuses typically range up to $20,000 for associates and $50,000 for consultants. In other words, MBA graduates can earn nearly $250,000 in their first year out of business school while gaining very valuable experience for their resume should they choose to exit consulting.
Starting MBA consulting salaries will reach $192,000 for the Class of 2023.
This latest news continues the trend of rapidly escalating MBA salaries. Quite simply, consulting firms such as Bain have experienced annual double-digit growth. The growth is attributed to the top-caliber talent the firms hire. Finally, the competition has only become more intense for this talent given the increased demand from big tech for MBA graduates.
There is also the high turnover these consulting firms historically experience. If higher salaries can lower this turnover, then clearly that also justifies the pay increase. As we alluded to earlier, consulting experience is extremely valuable on an MBA’s resume and many graduates go into consulting with the expectation they will springboard to another position within a few years. Consequently, we do not expect increased salaries alone to do much to stem these firms’ high turnover rates.
However, what may very well decrease the high turnover are other initiatives these consulting firms are also undertaking. For instance, these consulting firms have increased their efforts to limit the time their consultants are required to spend onsite at client locations and allow for more remote work opportunities. The firms are also providing more time off and parental leave.
While the increased pay and better work/life opportunities are impressive, we remain skeptical that the turnover rate will decrease significantly any time soon. Let’s remember to look back at our history and recall that several consulting firms began offering consultants the opportunity to work four days at the client site per week back in the 1990s.
