There are three big consulting firms. Mostly.
They are “the” MBB – McKinsey, Bain, and BCG (Boston Consulting Group). But they have, in recent years, had stiff competition – from the Big Four: Deloitte, PwC, EY, and KPMG. Although these are traditionally accounting firms, they’ve ventured into management consulting, which now makes up the largest share of revenue across all firms.
Traditionally, MBB paid the best of the bunch. And based on data from executive coaching firm Management Consulted, that still seems to be the case – and the gap seems to be pretty far from closing any time soon.
In 2023, US figures suggest that an undergraduate student at an MBB firm is paid around $140k, compared to around $100k for a Big Four consultant. That’s actually a more significant difference than the difference in 2020, when an MBB consultant earned $107k - $117k and a Big Four consultant earned $80k - $102k.
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Most of the difference seems to be in a lack of performance bonuses for Big Four consultants. Whilst salaries are relatively similar - $80k to $95k at Big Four compared to $110k or so at an MBB firm – the latter can expect performance bonuses of up to $30k, per Management Consulted. Signing bonuses are also relatively uniform across the two, although Deloitte and KPMG are more generous than their competitors. They are also on the top end for salary brackets, too.
Compensation for MBA & PhD graduates have less of a disparity. Although MBB still leads, it’s by less of a margin, proportionally. Although Management Consulted didn’t have figures for Deloitte, the rest of the Big Four offered compensation packages between $210k and $245k, compared to MBB’s $267k to $285k. Given that Deloitte pays its undergrad consultants best of all, their MBA/PhD graduates likely earn even closer to the MBB bracket.
Much of that difference reduction might be because these graduates earn some sort of performance bonus – although they’re not as high as their MBB counterparts. Big Four MBA/PhD graduate consultants earned between $17k and $40k in performance bonuses compared to between $45k and $63k for MBB. Salaries were also lower too.
Both are significantly lower than what most financial services firms offer. Harvard’s MBA program posted graduate earning figures recently, showing that its graduates entering hedge funds and private equity earned $396k and $345k on average respectively, whilst investment bankers were earning $329k. Ouch.
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