Post-Undergraduate vs. Post-Graduate School
There are many reasons why you might be considering working in Management Consulting: the variety of projects, the fast-paced learning environment, the experience of working with so many intelligent, capable individuals… and of course, the frequent flier miles and hotel points! But it is important to understand what exactly you are getting into. Below we describe the roles and responsibilities of junior Management Consultant from two possible entry points:
- Directly after being an undergraduate student
- After being a graduate student (typically MBA)
Knowing these details can help you make an informed decision about whether to pursue Management Consulting as a career—and note that your entry point (pre-Grad vs. post-Grad School) makes a real difference in your prospective role at the firm:
- Firms have many different names for this position – at McKinsey, it’s called the Business Analyst (BA) position; at Bain, it’s Associate Consultant (AC), and so on. What this junior Consultant really is, however, is a data-crunching, slide-making workhorse extraordinaire!
- When Consulting firms say that “they use data to drive to the answer…” that means the junior Consultant’s hard work. The junior Consultant is at the heart and soul of every project. During a typical project, there are often large data sets to analyze. For example:
- On a customer segmentation project, the client might want to understand the average spending by customer segment and the mix of products purchased. To do this, the junior Consultant must work with a client representative to pull thousands (or millions!) of records of customer purchase history data, and then analyze it with software to calculate the answers to these questions.
- On a Private Equity due diligence project, the junior Consultant might be responsible for locating industry data on market growth trends and building a model forecasting the target company’s revenue.
- And of course, in both scenarios, the junior Consultant will be responsible for presenting this data in client-ready format. In other words, once all the difficult number-crunching is done, the junior Consultant must oversee the creation of presentation slides to present the information to the client. As a result, analysts at Consulting firms become experts at both Microsoft Excel and Microsoft PowerPoint, plus any other software packages used on the projects (such as SAS, SPSS, JMP, R, Microsoft Access, Microsoft SQL Server, etc.)
- Most firms consider the analyst role to be a 2-3 year program only. After this time, many junior Consultants move on to business school, or other jobs: Private Equity, Venture Capital, Industry, etc. (We discuss exit options from Consulting later in this chapter.) At some firms, top-performing Consultants can stay longer—some firms offer direct promotion to the Post-Graduate level (see below) after a few years, or some may offer programs to sponsor returning Consultants to complete an MBA or other graduate degree.
- Overall, the Consulting Post-Undergraduate Analyst role in Consulting is considered an excellent launching pad for a business career, as it allows the Analyst to gain exposure to multiple industries and business problems in a short period of time. Even if Consulting is not your long-term objective, the skills and contacts gained through a Consulting Analyst program will serve as a great stepping stone to whatever career you may want to pursue afterwards.
Post-Graduate School Role
- Joining Consulting after graduate school (usually MBA, but occasionally other degrees, such as Law and Doctorate programs) is very different from joining straight out of college. If the newly-graduated job candidate doesn’t have much experience in a business setting, it certainly can provide a strong breadth of business exposure and learning in a short amount of time—just as it would for a Post-Undergraduate Analyst.
- If the graduate candidate does have business experience, however, he or she should know what his or her objective in taking on the Post-Graduate Associate Consulting role is: to become a Manager or Partner at the firm; to gain experience in Industry X; to put a strong brand on his or her resume in preparation for the next opportunity, etc. Because this candidate is older and more experienced, and has likely worked at a multiple companies by this point in his or her career, selecting Consulting as the next step is an important long-term career move.
- In terms of the role, the candidate’s transition is from serving as a “workhorse” Analyst to serving as more of an advisor, manager, and project-seller. That does not mean the Associate totally leaves analysis behind–far from it. There are certainly instances in which the Associate Consultant will build a model or analyze data. However, the Associate’s role is more about communicating the outcome of those analyses to clients, working more directly with clients to help them accomplish their business goals, and managing Analysts to carry the workload.
- On a Consulting project, Associates are likely to be assigned to a peer at the client. The Associate will communicate with this peer on a regular basis to develop and manage a work plan that the Consulting team will execute, all the while updating the client on the team’s findings. For example, on a post-merger integration project, the Associate will likely be at the client site daily, working with the client to manage the detailed process of integration (for example, supply-chain integration could be one component of this overall project). On a growth-strategy project, the Associate might meet with client representatives once per week to provide them with updates on the latest analysis and implications. The Associate is therefore the key contact for the client, and a true partner in this situation; the Associate is most directly responsible for helping the client team succeed.
- As already mentioned, the other major difference between a Post-Undergraduate Analyst and a Post-Graduate Associate is that the Associate will usually be managing part of the Consulting team. This can be an incredibly challenging aspect of the Associate workload, as for many Associates, it will be their first experience directly managing people. However, it can also be an extremely rewarding part of the job. After all, the analysts at the firm are incredibly bright, talented individuals. An Associate who can demonstrate his or her ability to bring out the best in the Analysts that work for him will be a valuable asset to the client and to the Consulting firm alike.
- The Associate is also responsible for ensuring that Analysts have clear guidance on what they should be working on (prioritization and direction), and ensuring that their output is error free (double-checking their work).
- The path to the next senior role (e.g. Engagement Manager at McKinsey, Manager at Deloitte, etc.) usually takes about 2-3 years, depending on the performance of the Associate and firm-specific factors. This period can certainly feel intense at times, but Associates can expect to learn an incredible amount about management and client relationship-building; Associates will also further hone their analytical and communication skills during this time period.
A Consultant’s Workday
The often-repeated phrase is true – no workday in Management Consulting is the same and certainly no project is the same. Each day as a consultant varies depending on the project, the deliverables and the client. Thus Consulting tends to be far more varied than law or investment banking.
Here is an example of a workday in Management Consulting as described by a current Management Consultant from a top-tier firm (using a pseudonym to protect client confidentiality):
Johnathan, 2nd-year Analyst: London
Context: We are working with a major healthcare company on an Eastern European entry strategy. It is a preliminary analysis about which markets are most suitable for the Company’s products. There are two analysts, one Consultant (associate), one project leader and two partners on the project. Phase 1 of the project is expected to last six weeks and we are currently in week three. I am in my home London office today.
7 a.m.: Wake up, check iPhone to make sure nothing urgent is needed (thankfully not today), go for a run, dress, and go to the office.
9 a.m.: Meet with Consultant (associate) for feedback on Poland market analysis model, which I have been working on. Consultant offered feedback on some aspects of the model that could be improved and also provided me with some blank slides to show output from the model.
9: 30 a.m.: Work on updating model and creating output slides that will be shared with the project leader in the afternoon. Also have to answer multiple email questions regarding the Hungary market analysis model we completed last week (there are continuous tweaks).
11:30 a.m.: Client call. I do not talk, but listen and take notes as the project leader updates the client on our work to date and answers questions about the preliminary work forwarded to the client yesterday (the client is a mid-level executive who will co-present our work to the CEO at the end of Phase 1).
12:15 p.m.: Grab lunch and continue working on the Poland market analysis and output.
1:30 p.m.: Full team meeting. Partner provides an update on deliverable timelines. Phase 2 of the project will likely commence in three weeks and it will involve preparing an implementation plan for the entry strategy–we will be working alongside our firm colleagues in Eastern Europe. Project leader updates full team on earlier call with client and adds an extra piece of analysis to each market around penetration of health insurance.
2:30 p.m.: Continue to complete preliminary output for meeting with Consultant at 4 p.m.
3:30 p.m.: Send updated Poland market analysis and slide output to Consultant for review. Catch up on emails, grab a coffee and prepare for the 4 p.m. meeting.
4 p.m.: Present slides to Consultant and get feedback to make changes to prepare for 6:30 p.m. meeting with project leader. Overall, the Consultant was happy with my output, although one number did not total correctly due to a formula error in the model. I have to work on not making such mistakes because they make superiors lose trust in you. Consultant requests updated output by 5:30 p.m. so that he can prepare for meeting with project leader. Continue tweaking slides and addressing feedback.
5:30 p.m.: Send updated slides to Consultant. Consultant will combine these slides with slides of another analyst and put together an executive summary and a few other details so that the overall output is coherent and clear when presented to the project leader. Some time to check emails, order GMAT books (I am preparing to apply for business school) and order dinner for team for 6:30 p.m.
6:30 p.m.: Consultant shows full presentation to project leader over dinner. Project leader likes the output but wants a few aspects shown in a different manner and also requests regression analysis for some of the output data. I will be doing this work, having just found out that I am not leaving early. We eat dinner together and I start the regression analysis.
10 p.m.: Send analysis and updated output to Consultant for review. Consultant is now working remotely.
10:30 p.m.: Consultant is content with the output after making a few tweaks and sends the updated output to project leader, who will review and hopefully not have any further late-night or early-morning feedback (as it is supposed to be sent to the client at 9:30 a.m. ahead of a 10:30 a.m. call). Consultant says that I can go home.
11 p.m.: Have a drink with an old friend from Undergrad (while watching my iPhone) before heading home.
12:30 a.m.: Off to sleep. Set alarm early in case there is early-morning feedback from project leader.
Management Consultant Compensation
We have surveyed Consultants compensation at a wide variety of firms. Compensation varies among firms but overall the leading firms have a similar pay scale, especially at the more junior levels. The survey data is based on consultants working in the United States. We will offer more data on other geographies over time.
- Analyst/Associate Consultant (Undergraduate entry-level, 1st Year): $55K-75K
- Associate/Consultant (MBA and other advanced degrees or direct promote, 1st Year): $110K-140K
- Manager/Engagement Manager: $150K-210K
- Principal/Senior Manager: $200K-250K
- Vice President/Partner: $250K-400K
- Senior Partner/Director: $300K-600K
It is also worth noting that across the board, salaries increase marginally within titles, and post-MBA, salaries increase marginally across titles. For example, a 2nd-year analyst base salary is approximately 5-15% more than a 1st-year analyst at most firms. Likewise, the high end of the Associate salary is close to the low end of the Manager/Engagement Manager salary.
Note: Base salary data excludes health insurance, 401K contributions, sign-on bonuses and relocation packages (all of which impact the result).
A full-year bonus at most firms depends on the consultant’s individual performance and the overall performance of the firm. The higher a Consultant’s position, the more the Consultant’s bonus is aligned to the overall firm performance. Bonuses therefore vary widely from year to year. Partners who sell large projects to clients can often receive large, multi-million dollar bonuses.
- Analyst/Associate Consultant (Undergraduate entry level, 1st Year): $10K-20K
- Associate/Consultant (MBA and other advanced degrees or direct promote, 1st Year): $15K-60K
- Manager/Engagement Manager: $40K-120K
- Principal/Senior Manager: $75K-150K
- Vice President/Partner: $250K-$1M
- Senior Partner/Director: $500K-$2M+
Note that these figures also include signing bonuses—for some firms, part of the bonus is paid up-front upon the signing of the offer. Also, this figure includes expected compensation available at firms like Bain & Co. for Pay for Performance (PFP) and Measurable Business Results (MBRs) schemes, in which Consultants derive some of their income from partial/full equity (or quasi-equity) payment, or from tangible value added to clients during the year (for example, cost savings associated with a post-merger integration project). The trend for some of the compensation to be derived from these types of performance and equity-based measures began in the late 1990s with the dot-com boom, as Consulting companies were struggling to retain their best employees in the face of increased competition from start-up Internet companies. These compensation schemes continue today in many firms.
For profit-sharing programs, a certain percentage of a Consultant’s base compensation is applied to shares in the profit sharing pool. These shares take time to become fully vested (typically 2 or 3 years), after which time the Consultant will receive this additional profit-sharing income.
All-in, first-year Analysts can expect compensation in the $75K-100K range, and first-year Associates can expect about $150K-200K in most cases.
For more detail on the compensation schemes available for new hires at various firms, please see this Management Consulting Salary Survey from 2013.
Compensation at Niche and Smaller Firms
Small elite firms tend to have a similar, albeit slightly lower, compensation structure. However, most other niche/boutique firms tend to be considerably lower. An entry-level analyst would typically earn 20-30% lower at a boutique firm while a partner might earn 50% less than at the most prestigious firms.
Prominent Former Consultants
Without a doubt, one of the benefits of securing a job at a top Management Consulting firm is the springboard it provides in terms of remarkable career opportunities. Below is a select list of 50 ex-consultants in leading positions in the worlds of business, finance and government.
- Prasad Hedge (Alix Partners): Core Management, Bridgewater Associates (Hedge Fund)
- Alison Davis (A.T. Kearney): Board Member, Royal Bank of Scotland and Unisys
- Uwe Kruger (A.T. Kearney): CEO, Atkins plc
- Mitt Romney (Bain): Former Governor of Massachusetts, co-founder of Bain Capital, 2012 Republican Presidential candidate
- Kenneth Chenault (Bain): CEO, American Express
- John Donahoe (Bain): CEO, eBay
- Meg Whitman (Bain): CEO, Hewlett Packard; Former CEO of eBay
- The Lord Feldman of Elstree (Bain): Chairman, British Conservative Party
- Jeff Immelt (BCG): CEO, General Electric
- John Paulson (BCG): Founder, Paulson & Co. (Hedge Fund)
- Indra Nooyi (BCG): CEO, Pepsi
- Michael Dornemann (BCG): Chairman & CEO, Bertelsmann Entertainment
- Martin Halusa (BCG): CEO, Apax Partners (Private Equity)
- Jean-Christophe Babin (BCG): CEO, TAG Heuer
- Benjamin Netanyahu (BCG): Prime Minister of Israel (1996–1999, 2009–Present)
- Arthur D. Collins, Jr. (Booz): Former CEO & Chairman, Medtronic Inc.
- Azran Osman Rani (Booz): CEO, AirAsia X
- Barry McCarthy (Booz): Partner, Technology Crossover Ventures (Venture Capital)
- Brian Murray (Booz): President & CEO, HarperCollins Publishers
- Deven Sharma (Booz): President, Standard & Poor’s
- Eric Spiegel (Booz): President & CEO, Siemens Corporation
- Jonathan S. Bush (Booz): President & CEO, Athenahealth
- Wendy Alexander (Booz): Labour Party Leader & Member of the Scottish Parliament
- Martín Redrado (Booz): President, Central Bank of Argentina
- Todd Larsen (Booz): President, Dow Jones & Company
- Josh Silverman (Booz): CEO, Skype
- Jim Lawrence (L.E.K.): CEO, Rothschild North America
- Reinhard Gorenflos (L.E.K.): Managing Director, Kohlberg Kravis Roberts (Private Equity)
- Tim Sims (L.E.K.): Managing Partner, Pacific Equity Partners (Private Equity)
- Robert Boyle (L.E.K.): Director, British Airways
- Ronald Cohen (McKinsey): Founder, Apax Partners (Private Equity)
- Vittorio Colao (McKinsey): CEO, Vodafone
- John C. Malone (McKinsey): Chairman, Liberty Media, CEO, Discovery Holding Company
- Louis V. Gerstner, Jr. (McKinsey): former chairman & CEO of IBM and Chairman, The Carlyle Group (Private Equity)
- James P. Gorman (McKinsey): President & CEO, Morgan Stanley
- Stephen Green (McKinsey): Chairman, HSBC
- Marius Kloppers (McKinsey): CEO, BHP Billiton
- James McNerney (McKinsey): Chairman & CEO, Boeing
- Helmut Panke (McKinsey): Former chairman & CEO, BMW AG
- William Hague (McKinsey): Foreign Secretary, United Kingdom
- Christopher A. Sinclair (McKinsey): Former chairman & CEO, PepsiCo
- Kevin Sharer (McKinsey): CEO, Amgen
- Peter Wuffli (McKinsey): Former CEO, UBS AG
- John Moore, Baron Moore of Lower Marsh (Monitor): Chairman, Rolls Royce plc
- Michael Porter (Monitor): Renowned professor, Harvard Business School; leading authority on competitive strategy and international competitiveness; Monitor Group Founder
- Ian Smith (Monitor): Former CEO, Reed Elsevier
- Rahul Gandhi (Monitor): General Secretary of the Indian National Congress; Member of Parliament
- Richard Dearlove (Monitor): Head of the British Secret Intelligence Service
- Premal Shah (Oliver Wyman): President, Kiva.org (Non-Profit)
- Andrew Youn (Oliver Wyman): Founder, One Acre Fund (NGO)
Management Consulting vs. Other Fields
Job candidates who are interested in pursuing Management Consulting as a career step frequently find themselves potentially interested in a couple of other career paths as well: Investment Banking and Law come up as potential alternatives time and time again. This section is devoted to helping a potential Management Consultant decide whether that field is best for him, or perhaps Investment Banking or Law is better instead.
vs. Investment Banking
What are the merits of Investment Banking versus Consulting? This is a very common question that you’ll encounter many undergraduate and MBA students talking about and debating. There is no easy answer and it depends on your interests, the type of career you are seeking after your banking/consulting position, and the importance you place on lifestyle and your personal life. Below we offer our comparison across a number of key categories.
Compensation: Higher in investment banking—especially as you progress in your career. While Consultants are certainly paid well, investment bankers can earn significantly higher bonuses. Note however that the income-generating climate for bankers is more variable, as it is dependent on active deal flow. Regardless, even in poor M&A and other investment banking activity markets, as it once was, bankers typically make more money. If compensation is your primary goal, banking is probably the more attractive option.
Culture/Lifestyle: This category tends to be considerably better in Management Consulting, especially at the junior and middle levels. Consultants work far fewer hours than their banker friends (a reasonable estimate is 50-70 vs. 90-100 or more per week for junior bankers!), and there tends to be a much more collegial atmosphere at the office. There are far fewer “horror stories” in Consulting than there are in investment banking. Specifically, Consultants do sometimes work late hours during the week, but on weekends, they have a much higher chance of being off than their banking counterparts do.
One potential drawback for Consulting is that it does typically involve much more travel than investment banking—often, Consultants must be on-site at the client’s office in another city. That said, for some people more work travel is a plus.
Learning/Training/Professional Development: It is not automatic whether Management Consulting or investment banking is better in these areas—much depends on an individual’s experience, as well as that individual’s desired career path afterwards. Bankers tend to develop stronger finance and overall financial modeling experience, while consultants tend to gain better overall business management and strategy-related skills and experience. It really does depend on the group the Consultant works for and the projects the Consultant works on.
That said, Consulting firms have many more formal training programs, which can be of benefit, though it is debatable whether such training is more valuable than the learning that occurs naturally on the job in either field.
Consulting positions at the junior levels offer more global learning experience opportunities than are typical in banking—for example, the ability to spend a period of time working in another global office, being staffed on an international project, or doing an externship with a global client.
Career Opportunities: If a financial career (e.g., private equity or hedge funds) is your goal, then banking is the better option as this greatly increases your chances of transitioning into those fields. However, Consulting offers a broader range of career opportunities outside of Finance, provided that you work at a top Consulting firm. Consulting firms also lend to much more time and effort helping to place its Consultants in great positions at clients and other firms relative to investment banks, where there is much more of a “you’re on your own now” vibe. Finally, there are some Private Equity and Hedge Fund firms that specifically seek to hire a portion of their incoming Analysts and Associates from Consulting firms rather than hiring investment bankers only.
Overall, both are excellent, lucrative careers and both rank among the best launching pads for future careers in other fields, across a broad range of business, not-for-profit and government organizations.
In addition to weighing Management Consulting vs. investment banking, many students also deliberate whether to pursue law school or a career in law rather than pursuing Management Consulting. It has also become increasingly common for junior lawyers at major firms to consider Management Consulting as an alternative career. More recently, some Management Consulting firms have even been formally recruiting students directly from leading law schools.
We will say upfront that it is challenging to make the move from a law firm or law school to a consulting firm, but it is certainly possible. A person’s experience in both fields depends on the firm, the projects, and the team; we spoke with three lawyers who have made the move (one from law school and two from a law firm) to gain insights into the key differences between law and consulting, and into making the switch to a consulting firm. It should be noted up front that the differences between these two fields are striking; while in both cases we are talking about potentially rewarding, lucrative careers for talented individuals, Law and Management Consulting could hardly be much more different than they actually are.
- The structure of the workweek is very different. Consulting tends to be as intense, or moreso, during the workweek. However being free on weekends tends to be much more valued at Consulting firms. As an associate at a major law firm, you are very much on-call, as if you were an ER doctor.
- Mastery of facts and details is important in both law and Consulting, but in law, decisions are based primarily on factual details whereas in Consulting, decisions are much more impacted by trends and analysis based on assumptions and estimates.
- Consulting is much more team-based whereas in law, outputs tend to be driven much moreso by individuals.
- Interpersonal relationships among colleagues in Consulting tend to be less hierarchical.
- In both Consulting and law, clients can be grateful and easy to work with, or they can be resistant to answers from outsiders— it really depends on individual relationships and internal client politics. Thus in either case, having one “bad” client can have a serious negative impact on an individual’s experience at a firm in either industry.
- Compensation: 1st-year Associates at top tier law firms earn ~20% more than Associates at top tier Management Consulting firms. However, after 2-3 years, compensation is very similar at top tier firms in both industries.
- Lifestyle: Consultants tend to have a better lifestyle, especially in the more junior years. Very importantly: Lawyers account for time in 6 minute increments v. no time increments in consulting. We cannot emphasize this enough. It is life changing. A few free days at a consulting firm is a great thing; at a law firm, your utilization can go down and severely affect your bonus and positioning. Additionally, lawyers at top firms must be extremely cautious to monitor exactly how they spend their time, while Management Consultants are usually dedicated to only 1 or 2 clients at a time.
- Learning/training/professional development: Consultants at top firms develop a broader range of business skills, but lawyers can gain certain focused expertise that can help them maintain or develop their career in that specific area. In that sense, lawyers can become leading experts in specific areas after only a handful of important, related cases.
- Career opportunities: Consultants have much broader career opportunities in the field of business. Though lawyers in a specific area have certain advantages (e.g. bankruptcy lawyers account for ~40% of distressed debt investors), their overall skill set is more suited to staying in law.
In a nutshell, our recommendation is this: we would recommend law over Consulting only if you are fairly certain you want to be a lawyer. It is difficult to transition from one to the other, and for those who are uncertain, our viewpoint is that Consulting is likely to work out better, since it opens the door to career opportunities in so many different areas.
Switching from Law to Consulting Firm
For those who are already in the law area (either as attorneys or law students), here are a few tips for making the transition to Management Consulting if you feel it appropriate for you:
- If you are at a top tier law school or law firm and are serious about shifting to Consulting, reach out to HR at any firm you might be interested in during the recruiting season and you will likely be considered.
- Other than needing to clearly demonstrate why you are serious about Consulting rather than law, the recruiting process will not be different for you than it is for anyone else. In that regard, it might be helpful for you to brush up on some of the basics of the Management Consulting industry.
- We have heard that both in the interviews and once you start at a consulting firm, lawyers are more carefully scrutinized to prove their quantitative skills again and again. Therefore be sure to heavily prepare for the quantitative aspect of the interview. In particular, read up on and practice some of the analytics that Management Consulting firms tend to perform in client Engagements.
Management Consulting: Opening Career Possibilities
Like going to a top school or working in Investment Banking, working at a top tier Management Consulting firm is a step that will help create many career opportunities. However there truly is no typical career path— some Consultants have a long career in Consulting while others shift into a variety of other careers. The learning curve as a Management Consultant is steep—the job is extremely challenging to anyone who newly enters the field. This pays handsome dividends at exit time, because Consultants with experience find they have developed highly valuable skills and knowledge in the marketplace. In addition, firm alumni from a Consultant’s firm can play a major role in opening up exit opportunities for Consultants looking to explore career options in many different fields.
Here are just a few paths an exiting Consultant might take:
Private Equity and Venture Capital
After the two-year analyst program, many junior Consultants are recruited by private equity firms such as Carlyle, KKR and Bain Capital. It is an extremely selective process. Approximately 1/4 of private equity analysts come from Consulting firms (with most of the remainder coming from investment banks). If you are interested in making this transition, please see our Private Equity Training course for background information on the Private Equity industry and how to secure a position at a Private Equity firm.
Hedge Funds/Money Management
Hedge funds tend to be less structured than Private Equity firms in terms of their recruiting cycle; also, most Hedge Funds hire primarily from investment banks (although there are a number of hedge funds that so hire consultants). Consultants that show a clear interest and knowledge of investing are certainly capable of securing Hedge Fund jobs. There is a presumption that if an applicant really wanted to work at a hedge fund he/she would have done banking and not consulting, so you may have to fight that opinion. More commonly, ex-consultants join Hedge Funds and other investment firms after attending business school. If you are interested in making this transition, please see our Hedge Fund Training course for background information on the Hedge Fund industry and how to secure a position at a Hedge Fund.
The Corporate World
Consultants are in significant demand by many corporations due to the analytical capabilities, strategic thinking, and managerial experience a former Consultant can bring to a company. While many corporations hire Consultants to effectively be in-house Consultants in their strategy department, there are many other attractive positions such as Business Development, operating positions, and executive management that are suitable for Consultants. Ex-Consultants can often start at surprisingly senior positions—especially relative to what they might have achieved if they had joined that company straight out of college. Many managerial-type job advertisements at leading corporations specifically mention Management Consulting experience as a requirement or a strong plus.
A very high number of former Consultants join start-up companies and/or start their own ventures. This is more common now than many years ago. Working at a leading Consulting firm not only provides you with sound business and analytical skills but also with credibility and a strong network to maximize the chances of success for a new or early-stage company. It is not uncommon for partners of a Consulting firm to invest in start-ups led by firm alumni and to use their networks to help such ventures.
Some Consultants select to apply their developed skills to the not-for-profit field. Increasingly, there are well-funded not-for-profit organizations that can greatly benefit from the Consultant skill-set. There are also not-for-profit Consulting firms, such as the Bain spin-off The Bridgespan Group, that can provide an excellent launching pad for individuals interested in working in the not-for-profit sector.
MBA and other Advanced Degrees
A large number of Consultants go on to graduate school, most commonly to business school, directly after their time in Consulting. The acceptance rate of Consultants from top consulting firms applying to the top business schools is extraordinary. With so many alumni from top business schools in these firms and the schools’ knowledge that these students will have significant career opportunities, often including returning to the firm, this success rate is not very surprising. Estimates suggest, for example, that about 20% of HBS and Stanford GSB’s incoming class every year had previously worked at a leading Consulting firm.
Some Consultants also go on to law school and other Masters or PhD programs. As with the MBA, having a prestigious Consulting firm on an applicant’s resume generally increases the chances of securing a spot in a top program at a leading school.
Graduate School Sponsorship
As we have seen, working at a Management Consulting firm certainly offers many perks and opportunities. One question we are commonly asked is, “Do Management Consulting firms sponsor Graduate School for its employees?” At some firms, yes, you can have your graduate school paid for. That’s right—all $100K+ of it. So how does this work and what is the catch?
The first question is: Is it common for firms to offer sponsorship? The majority of the top-tier firms including McKinsey, BCG, Deloitte and Bain have sponsorship programs. For top-performing analysts who they would like to see return after graduate school, they provide an offer to return to the firm at the post-graduate school position (e.g. Associate, Consultant) and to cover tuition (in addition to a returning bonus). Smaller firms may offer such programs as well, though their programs tend to be less formalized. Why do firms spend so much money on paying for Consultants’ graduate school? In essence, they’ve realized that it’s a great way to retain experienced and talented Consultants and to provide an opportunity for those Consultants to expand their skill sets. It is a lot less risky and arguably cheaper for them to sponsor graduate school for a top performer than to take a chance on a new, unproven candidate that does not always work out.
The leading firms say that they will sponsor all strong candidates. Our surveys show that approximately 50% of analysts who request sponsorship actually receive such sponsorship; this percentage also differs quite a bit by firm (for example, a higher percentage of McKinsey Consultants are granted sponsorship relative to Deloitte Consultants). The majority of this sponsorship is for an MBA at a top-tier business school.
The second question is: What is the catch? In exchange for covering a Consultant’s tuition expenses and providing him or her with job security during the program, sponsored candidates are bound to work for the firm for a minimum number of years (usually two) after school. Over that time post-schooling time, the tuition payment owed back to the firm is amortized down to zero. Should the Consultant leave prior to fulfilling his or her commitment, he or she is responsible for paying the remaining portion of it back. So, for example, if the firm has paid $100K towards a Consultant’s tuition, and that Consultant has a two-year commitment post-schooling, that Consultant will have to pay back ~$50K if he or she decides instead to leave the firm after one year.
Certain firms also require that Consultants pay back all or part of their signing bonuses and/or other such financial awards, depending on how soon you leave. Leaving early and breaking your commitment can also be seen as “burning a bridge” with the firm, though the relationship can be maintained if managed tactfully and respectfully.
Overall this opportunity sounds attractive, which leads to the third question: Who would turn such an offer down? The reality is that if you’ve worked at a leading Management Consulting firm, you will have many career opportunities upon graduation from an MBA program; part of the value of attending business school (or another type of graduate school) is to explore such opportunities. If you decide to accept sponsorship and thereby return to Consulting immediately after graduate school, you might miss out on another opportunity–one that may be harder to shift into once you have repaid the firm. Therefore, we would recommend accepting the offer only if you are quite certain that you would like to return to Consulting upon graduation.
One additional points is that some firms will offer additional bonuses for sponsorship the earlier a Consultant accepts such an opportunity. We strongly recommend accepting as late as possible (even if you miss out on some of the retention bonus), as it is worth exploring other opportunities before committing many years ahead.