Top Consulting Firms Freeze Starting Salaries Amid Tougher Job Competition: ‘Hangover After The Party’

Leading consulting firms globally, including McKinsey and BCG, have decided to maintain their starting salaries for new graduates at 2023 levels in the U.S., a shift from the previous trend of increasing wages. This change comes as competition for jobs becomes more intense.

This decision is a notable departure from the scenario a year ago when these firms boosted salaries by the largest percentage in over two decades. The sustained high inflation means that the actual value of a new consulting job will significantly decrease next year, reported the Financial Times.

Fiona Czerniawska, CEO of Source Global Research, described the situation as “the hangover after the party”.

She explained that consulting firms are striving to bolster profits by constraining hiring and keeping salaries steady due to declining customer demand in some areas and pricing pressure across the board.

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According to data from Management Consulted, McKinsey offers a base salary of $192,000 for a new business school recruit, while candidates with an undergraduate degree are offered $112,000. Bain & Co. offers the same, but BCG’s base pay is $2,000 less. However, signing and performance bonuses could increase the first-year pay to $267,000 or more for MBAs and at least $140,000 for undergraduates.

Namaan Mian, COO of Management Consulted, stated that it’s the most competitive market he has seen in a decade with fewer jobs available and more applicants due to people seeking safety away from investment banking and tech.

Some firms have even asked their 2023 hires to postpone their start dates to 2024, further reducing the need for additional campus hiring this year, Mian added.

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