Management Consulted has learned that BCG will be rolling out an updated compensation structure as of September 1, 2022. The big highlights? Base salaries for Associates (pre advanced degree entry level) will rise to $110,000. The Consultant base salary (post advanced degree entry level) will rise to a whopping $190,000.
In response, McKinsey and Bain have made plans to increase their base salaries as well, one-upping BCG to offer the highest base salaries in the industry. Specifically, the new McKinsey Business Analyst salary and new Bain Associate Consultant salary will now be $112,000 (pre advanced degree entry level). New McKinsey Associates and Bain Consultants (post advanced degree entry level) can now expect to earn $192,000.
While McKinsey and Bain have updated their entry level base salaries, Management Consulted has received confirmation that BCG is updating its entire compensation structure across levels. As a result, you’ll see a modest base salary bump in your second year at the firm. Second year Associates can expect to earn $115,000 in base salary, and second year Consultants can expect to earn $195,000 in base salary. Keep in mind that these numbers are just base salaries, and don’t take BCG performance bonuses into account. At the Associate level, you can expect to earn up to $20,000 in performance bonuses, while as a Consultant, you can earn close to $50,000 in performance bonuses.
This means that in your first year out of an MBA program at BCG, Bain, or McKinsey, you could earn close to a quarter million dollars in total salary.
If you’re going through the recruiting process now, the base salary in your offer letter will be higher than what was listed in our 2022 Consulting Salary Report. In addition, longer-tenured consultants will see more generous raises when they hit the next promotion cycle. Why did MBB raise salaries, and how will other top competitors respond? Read on for our take on the situation.
NOTE: Did you receive a 2023 consulting offer? Congrats! Help pay it forward to the next generation of consultants by anonymously submitting your offer info – it will be shared in our upcoming 2023 Consulting Salary Report.
Why is BCG Raising Salaries?
The salary increases apply not just to the entry-level undergraduate and post-MBA positions at BCG (Associate and Consultant, respectively). They apply across the career ladder at BCG – Project Leaders and Principals are also seeing pay bumps.
Our take? The current inflationary environment, as well as the tight labor market, is forcing BCG to up the ante when it comes to recruiting and retaining talent.
Consulting has expeirenced an exodus of experienced talent over the last three years – and firms like BCG are trying to incentivize more of their people to stick around instead of leave for lucrative opportunities in industry.
In addition, the firm hopes the additional money will entice candidates choosing between competitors in consulting (McKinsey, Bain, Strategy&, EY-P, L.E.K.), IB (Goldman, Morgan Stanley, etc.) and Silicon Valley.
Will the strategy work? We believe the answer to be yes. Candidates with multiple offers on the table will gravitate toward the firm with the higher dollar number on the offer sheet. In the frantic war for top talent it’s advantage BCG, McKinsey, and Bain (at least for now)!
Ripple Effects: How Will Competitors Respond?
Consulting firms experienced an explosion of demand during the pandemic (and that was on top of a decade-long streak of double digit growth!) This growth, combined with staffing needs that the pandemic exacerbated, have kicked consulting firms’ demand for talent up a notch.
As we’ve already mentioned, McKinsey and Bain have upped the ante, upping their entry level base salaries to a level that is $2k above BCG. We expect that other consulting competitors (EY-Parthenon, Strategy&, L.E.K., Kearney) will also shortly increase thier compensation packages.
This move by BCG (and the corresponding response by McKinsey and Bain) is evidence of the fierce competition for talent amongst consulting firms, and between industries like consulting and banking. Still, while demand for consulting talent is high, the supply of jobs is still much lower than the number of candidates. In fact, last year, McKinsey recieved 1M applications for just 10,000 open roles (that’s a 1% acceptance rate!)
Will the new-and-improved BCG Associate and Consultant salary be enough to attract and retain the talent the firm needs? Check back in with us later this year for an answer!