Since a brief recession at the start of the pandemic in 2020, consultants have benefited from a surge in corporate demand for advice on digital transformations and M&As companies reshape their businesses following the coronavirus crisis.
The growing pressure on companies to reduce their environmental impact has also been a boon for management consultancies, which have quickly built businesses to provide advice and strategy. One in five companies had to turn down work because they didn’t have enough staff with the right skills, according to research from Source Global.
The decision by three of the most prestigious consultancies to raise salaries underscores the pressure the financial services industry faces to attract new employees. Last year, several major Wall Street banks, including JPMorgan Chase and Citigroup, raised salaries for junior bankers.
Corporate law firms have also been embroiled in an aggressive pay war. Consultants are improving pay and other benefits in response to increased competition in “a very hot market for talent,” said Keith Bevans, partner and head of consultant recruitment at Bain.
“The competition we face is broader than ever,” said Mr. Bevans. “We’re meeting people on campus who are interested in big tech, are interested in other consulting firms, are thinking about starting their own companies or a search fund, or are looking to go directly into private equity.”
Companies have also improved benefits such as paternity leave. “While compensation remains important, our research shows that to attract, retain and develop talented colleagues, considerations such as clear career growth opportunities, flexibility and purpose are equally important,” McKinsey said in a statement to the Financial Times.
The firm received around a million applications for 10,000 jobs last year despite criticism of its role in helping to “boost” sales of addictive opioids in the US.
Candidates now pay more attention to other benefits, but salary is “definitely the most important factor” in attracting recruits, said Namaan Mian, chief operating officer of Management Consultad, which advises students applying for jobs in the sector.
This year’s pay increases for new hires at McKinsey, Bain and BCG were the second largest in the past decade, he said. It took about four years for consulting firms to repair their profit margins after significant wage increases at the turn of the century, Ms Czerniawska said.
Despite the “rough economic waters,” companies were still hiring long-term because if they “turned off the tap during a recession” it would be hard to hire consultants fast enough when things got better, Mian said.
Recruits who have completed a bachelor’s or master’s degree but do not have an MBA will also receive six-figure pay packages. Base salaries for graduates joining Bain and McKinsey in the US will increase 12 percent to $112,000 a year, according to people familiar with the salary increases.
Counterparts joining BCG in the US have been offered $110,000, said a person who had seen a job offer from the firm. BCG, Bain and McKinsey declined to comment on their salary figures.
Firm salaries vary by region and are significantly lower in most countries outside the US Firms don’t disclose their earnings, but many partners receive seven-figure sums a year.