Salary is one of the main advantages of being a strategy consultant. An average annual package of €60,000 when you start out, rising to several hundred thousand euros if you reach the position of Partner. Strategy consulting firms attract and retain top talent with these attractive remuneration packages. The package refers to the fixed and variable parts of the salary, but it's also worth discussing the other benefits offered by strategy consulting firms. Package and benefits are determined by several factors, including workload and pace, but also the competitive war between firms. McKinsey, BCG, Bain, Roland Berger, Oliver Wyman, Kearney and others are engaged in a major battle to offer the best to the best.
In this article, you'll find out what makes up a strategy consultant's salary, what determines it and, finally, what remuneration is offered according to rank and firm in the Paris marketplace.
The composition of a strategy consultant's salary: fixed, variable and other benefits
The fixed part of a strategy consultant's salary: the guaranteed minimum
The first component of a strategy consultant's salary is the fixed part, which is the minimum remuneration independent of individual and firm performance. On average, the fixed salary increases with each promotion, i.e. every 12-24 months. In general, it is more or less the same in a firm of the same rank. For example, it will be very similar at McKinsey, BCG and Bain, and similarly at Roland Berger, Oliver Wyman, Kearney, etc.
The variable part of a strategy consultant's salary: what can boost your package?
This is the most interesting part of a strategy consultant's package: the variable part. Depending on the grade, it can represent anything from 5% of the lowest variable to 100% of the highest fixed part. Strategy consulting firms considerably increase the packages offered to their consultants thanks to this variable component. It is often based on the performance of both the strategy consultant and the firm. The consultant's performance is measured by the results of his appraisals. Firms are very secretive about their appraisal systems, which are built around several criteria: individual performance, achievement of objectives, results on assignments, customer feedback, team feedback. At each grade level, appraisal criteria evolve to reflect changes in the consultant's roles and missions. So, the more senior you are, the more your variable will be linked not only to your individual performance, but also to your customer relations skills, your managerial skills and your sales development efforts. Finally, the variable part of a strategy consultant's salary can be broken down into these different bonuses:
- Annual bonus linked to individual performance
- Collective bonus linked to overall firm performance
- Profit-sharing bonus
- Tenure bonus based on consultant's length of service with the firm
The fixed portion reaches a ceiling at Partner grade, while the variable portion has no limit, generally increasing in value faster than the fixed portion.
Other benefits offered to strategy consultants in addition to salary
The salary is very important, but strategy consulting firms also offer their consultants other benefits. These benefits are more related to day-to-day life, mostly during working hours and sometimes outside. The larger the firm - McKinsey, BCG, Bain - the more interesting and important these benefits are.
- Signing bonuses: Some strategy consulting firms offer signing bonuses to make their proposals more attractive than the competition's and thus attract the best candidates. This is particularly true of Roland Berger, Oliver Wyman and Kearney.
- Travel allowance: Since strategy consultants may be required to travel frequently on client assignments, they may receive travel allowances to cover all expenses such as airfares, hotels, food and transport. Even more so if the assignment involves travel abroad.
- Meal reimbursement: Depending on the geographical location of your firm's office, you may have your meals paid in full. For example, in some of MBB's foreign offices, lunchtime meals are paid for, as are evening meals if you work late on your assignment.
- Cab reimbursement: In addition to assignments that require the consultant to travel, some involve working late, or even very late after midnight, within the firm. Often, in such cases, all or part of the consultant's cab fare home will be covered.
- Sports and leisure bonus: Some firms offer a sports and leisure bonus to enhance their employees' well-being. This may, for example, enable a consultant to pay for all or part of his or her gym.
- Co-optation bonuses: As part of the war for talent between strategy consulting firms, consultants can receive a bonus for the successful recruitment of a candidate they have recommended.
In addition to these financial benefits, consultants at the best strategy consulting firms have access to many other advantages, such as paid training throughout their career, up to and including MBAs from the world's most prestigious universities.
Read also : TOP 5 reasons to join a strategy consulting firm
Determinants of a strategy consultant's salary: why this remuneration?
Attract the best candidates with attractive salaries justified by the scarcity of profiles
The job of strategy consultant is a highly demanding one, which is why candidates are hand-picked through extremely difficult and selective interviews. In fact, strategy consultants have rare profiles with excellent problem-solving and analytical skills, and remarkable qualities such as rigor and the ability to adapt to any situation. On top of that, they come from the best engineering schools (X, Centrale, Les Ponts, Les Mines) and business schools (HEC, ESSEC, ESCP, EM Lyon), usually with prestigious internships in investment banking, investment funds, start-ups and major corporations. In short, to attract them, you need to know how to pay them at the right price, with a better offer than the competition.
Read also: Everything you need to know about strategy consultants: assignments, careers, salaries
The most attractive remuneration package compared with direct and indirect competitors
Strategy consultants' salaries also reflect a war for talent between firms - direct competition - and other professions, which pay very high salaries - indirect competition. The aim is to offer attractive, competitive salaries in relation to these two types of competition.
- Direct competition: These are the other strategy consulting firms, mainly those of the same rank, which is why salaries are never very different. For example, the salaries of McKinsey, BCG and Bain are very similar, and the difference will generally be made on the variable part, on prospects of increase and welcome bonuses. But the salary game with rival firms doesn't stop at entry-level salaries and competition between similarly ranked firms. If McKinsey raises these salaries considerably, BCG and Bain will fall in line, driving up overall salaries. Then, the other firms will follow, to a lesser extent, but will be forced to align themselves with the firms just ahead of them. Through this trickle-down effect, all strategy consulting firms will increase their salaries. For example, in 2022, EY-Parthenon, on the strength of a salary comparison with 7 other firms, has increased the entry package for new consultants to €65K. Find out more here in a Consultor article.
- Indirect competition: Beyond the competition on salaries between firms, there's also competition with other professions, notably investment banking and French Tech. Many strategy consulting candidates have had M&A internship experience, and will therefore compare the salaries on offer. It's not uncommon for candidates to think: "If I don't get a Top 6 firm, the ones that pay the best, I'd rather go back to investment banking. The best banks pay an entry-level package of €100K/year, but be warned: the pace has nothing to do with strategy consulting. French Tech and startups are another alternative for strategy consultants, usually after a few years' experience. These are companies that have often raised large sums of money and have the budget to recruit the best consultants.
Once you've attracted the best candidates with an attractive remuneration package that's more attractive than the competition, the challenge now is to keep the consultants, despite an intense workload.
Keeping the best profiles despite the pace and workload of strategy consulting
The workload of strategy consultants is very heavy, with long hours and an intense rhythm. A typical consultant's day runs from 9am to 8pm. However, depending on the assignment, the day can start at 8:30am and stretch to 11pm or more. However, unlike investment banks, where these working hours are more common, strategy consulting firms pay more attention to work-life balance. In addition, a strategy consultant is more likely to travel to client sites or on assignments abroad. Then, at times, the number of assignments can increase considerably, stretching staffing schedules. This was particularly the case during the recovery from the covid-19 crisis, when consultants worked more than 70 hours a week, according to this Consultor article. Finally, the pressure of the job also plays a part in the consultants' overall workload and pace. To cope with the more negative aspects of the job, firms are obliged to offer attractive salaries throughout the consultants' careers, if not more so when they are more senior. Indeed, after 3 to 4 years' experience, strategy consultants are very much in demand on the market by companies who may offer them a slightly lower salary, but above all a much more pleasant workload and pace. Many consultants leave after a few years to join a large company or an entrepreneurial project, as illustrated by the Echos article on this subject published here in March 2023.
Salary scale for strategy consultants by grade and type of firm
Salaries are one of the main retention levers for practicing strategy consultants.
Generally speaking, new consultants plan to spend 3 to 4 years of their career with the firm before leaving. On average, strategy consultants receive a salary increase of around 10% per annum, accompanied by a larger increase with each grade progression. Bonuses, linked to individual and firm performance, make up a significant variable part of remuneration, ranging from 5% to 20%.
The salaries shown below include both fixed salary and bonuses, reflecting the average packages offered by strategy consulting firms.
In a few words, a winning strategy for strategy consulting firms offering very attractive salaries
From an average starting salary of €60,000/year, right up to the highest ranks, with packages of several hundred thousand euros for Partners, strategy consulting firms make considerable efforts to attract the best candidates with attractive salaries, including fixed and variable components. Beyond their salaries, strategy consultants enjoy a number of other benefits to enhance their quality of life. Despite the profession's intense workload and challenging pace, competitive salaries are a crucial argument for strategy consultancies in retaining top talent. However, other factors are increasingly important to new consultants, such as CSR, climate change and the quest for meaning.
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