If you're working 80 hour weeks in the investment banking division (IBD) of a major U.S. bank, chances are that you've toyed with moving into a consulting firm instead. After all, consultants are generally held to offer a better lifestyle than banks. Junior bankers who've moved to the so-called MBB consulting firms of McKinsey & Co, Bain and Boston Consulting - have assured us they are having a better time of it.
However, there's a downside to moving into consulting: pay. The average consultant earns a lot, but earns less than the average banker. But if you manage to reach the top in a consultancy firm (ie. you come a partner) you might be paid on a par with people at the top of banks.
Boston Consulting Group has just released the results for its UK-based partnership for the year ending March 31st 2018. They show the average of its nearly 800 UK-based employees (including 484 consultants and 315 administrators) earning £94k ($123k) in wages and salaries over a 12 month period. The average of its 56 UK partners earned £967k. Both numbers were down slightly on the previous year.
While these are big numbers, banks' numbers can be bigger still. Average pay per head at Goldman Sachs in the UK is closer to £399k. Recruitment firm Dartmouth Partners says juniors in investment banking divisions (IBD) at major banks are earning £260k within six years. After a couple of years in a front office banking job, most people are earning six figures. However, 'code staff' in banks in the UK (senior staff and risk takers) typically earn around £1m, putting them on a par with BCG's partners.
The pay figures for BCG don't include wages paid to "outsourced consultancy" staff from other BCG Group companies who came to work in the UK during the year.
For bankers who want to move into consulting, the good news is that BCG is hiring. The firm added 53 consultants and 49 administrators in its last financial year. However, both revenues and operating profits remained flat at around £270m and £88m respectively.
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