How much money does consulting pay?
Get the inside knowledge on total compensation
How much money can you actually make in Consulting?
This is a common question I get asked, having spent 8 years (so far) working in Strategy Consulting across 2 of the biggest Global Consulting firms in this space. The answer is quite varied depending on the firm, region, pace of progression, experience and even which area of Consulting you move into.
Below are the key general ranges based on role, and typical time it takes to progress through each level.
As you will see from the summary below – for Tier 1 (i.e. MBB) firms the bonus really starts to differentiate itself from the Tier 2 & 3 firms in terms of overall compensation.
Also to note the bonus figures are made up of more complex payouts as you go higher up the firm, for example an Analyst will simply get a cash payout versus a Junior Partner will receive a combination of cash, stocks and profit sharing which can have varying vesting periods (e.g. 3-5 years) which is a key way these firms tie you in long term the higher you go.
Also these ranges are based on the North America market, there are bigger variations when it comes to other regions. For example Europe pays significantly less for the same roles in the same companies. One of the first things I noticed when moving from Consulting in Europe to North America. If you would like to know more about typical ranges in Europe please let me know in the comments or get in touch here.
How much can you make at Tier 1 firms?
As you can see Tier 1 firms, really do pay well! If you have a goal of Financial Freedom in your 30’s like me, Consulting is a great way to reach it, given the total compensation noted above. But there are significant drawbacks to your overall life, and these firms do take their piece of you in return. For example, very little work life balance (in my case none for Monday – Thursday’s), extensive travel (trust me this will return once the pandemic is over) and constant, fast paced pressure from clients to deliver to an expected level without fail.
If you would like a full breakdown of some of the key positives and negatives, I put together a post here which you may find useful.
As you can see, you really can be making $250k+ at 30 years of age – in fact I have friends at a similar age who made $300k last year. I am making over $200k at 30 years old. There is a reason why these firms are so difficult to get into, they pay!
If you manage to stick out the grind and make it to Partner, the compensation is essentially unlimited, there are partners driving around in Ferrari’s and Lamborghini’s from these firms. Reminds me of an away day at my previous company. We were having an overnight stay in a hotel just outside the city. We had just wrapped up the final All Hands session after a night of a fancy sit down meal and free bar extended well into the early hours of the morning. I took full advantage, don’t you worry 🙂 I was walking to my car (a beat up, 7 year old Toyota) the next morning, slightly groggy, and my Partner walked over to his car at the same time. He pressed the key fob and a red Ferrari F8 Spider lights up. For reference these cars cost over $300k. That’s when it hit me, how much money can be made in Consulting. Some of these guys/gals are making over a million dollars a year!
How much can you make at Tier 2 firms?
Tier 2 firms, the likes of Oliver Wyman and Accenture Strategy are pretty phenomenal salaries too versus the average industry. As a 25 year old, 3 years out of University you can be making anywhere from $120,000 to $160,000 (including bonus) – pretty amazing right? There is no reason at this age you can’t be saving over 60% of your compensation given you should have no mortgage/kids that you need to support. If you are in this position, your 20’s and early 30’s are the time to be smart and save/invest consistently.
The main difference from Tier 2 to Tier 1, really starts to come through in the areas of Bonus payout. The bonuses are not quite up to MBB level but still are incredibly good. Once you get to Managing Director the payout is essentially unlimited and can be as much as a Tier 1 firm at this level – similarly a Partner at a Big 4 firm can make as much as a Managing Director at MBB. Once you hit the top of the food chain, everyone is a fat cat!
How much can you make at Tier 3 firms?
Finally, we have Tier 3 – or the Big 4 firms. To note there are plenty of other firms out there in the area of Strategy/Management Consulting and even more boutique firms. But I’ve focused on the big ones.
The Consulting arms of these companies for example EY Parthenon, Deloitte Monitor etc. do still pay extremely well. They are certainly not to be snubbed, you can make a lot of money here, and there tends to be a slightly better work/life balance versus Tier 2 and especially Tier 1 firms. Although there are a couple of more levels to jump through as noted above.
Whatever firm you are targeting or even currently are in, most pay within the top 1% of salaries by typical age. The tricky part is breaking in, and then finding a way to stick it out through the lower levels up to the big dollar payouts. Generally there is an up or out progression model that is followed. I put together a brief post on how I got into Consulting here. But get in touch if you have any further questions here or leave a comment below.
As always, if you would like to follow along on my journey, I keep my net worth updated here. Leave a comment and subscribe to my newsletter joining other Millennial Money Masters to stay in the loop on how I am getting on and to be notified of my upcoming posts.