charles aris strategy consulting compensation study 2015
DESCRIPTION
Consulting Comp and payTRANSCRIPT
-
Charles Aris, Inc. | Wells Fargo Tower | 300 N. Greene Street | Suite 1800 | Greensboro, NC 27401 | 336-378-1818
2015 Strategy Consulting Compensation StudyJanuary 30, 2015
-
This information is confidential and was prepared by Charles Aris, Inc solely for the use of our client; it is not to be utilized by any third party without our prior consent
Compensation Data Key Facts
2
All compensation data points for this study were collected between January 1, 2014 andDecember 31, 2014. Its important to note that most firms raise base salaries for theirconsultants in the December/January timeframe, and the most recent set of raises (i.e.those that took place approximately one month ago) will not be reflected in this study. Inaddition, one Big 3 firm provided an additional one-time special raise in October of 2014,which effectively resulted in two raises during the calendar year. Given that we collect datapoints throughout the year, only a small percentage of data points that reflect this specialincrease will be incorporated in this study.
Most firms pay year-end bonuses in the December-January timeframe as well. The targetbonus percentages indicated at the top of each bar in slide four reflect what consultantsexpected to receive at year-end and are not verified after the fact.
Compensation data points are self-reported by consultants and are not verified through anyother means. While this implies that consultants have the opportunity to be less thanhonest about their compensation, we feel extremely confident that the data are accurategiven the consistency in responses we received across consultants and firms.
We eliminated a small percentage (less than 5%) of outlier data points that would haveadversely skewed the data. We also excluded Partner compensation data points from thisstudy. During the course of 2014 we spoke with many Partners with MBA graduation datesin the range of our study, but their higher compensation dramatically skewed the data to apoint where it would no longer be useful for our clients.
Charles Aris, Inc. is pleased to present our 2015 Strategy Consulting Compensation Study. Key facts about the data compiled for the study are as follows:
Copyright 2015 Charles Aris, Incorporated. All rights reserved. Not to be utilized by any third party without the prior consent of Charles Aris, Incorporated.
-
This information is confidential and was prepared by Charles Aris, Inc solely for the use of our client; it is not to be utilized by any third party without our prior consent
Input Data by Consulting Firm
3
0%
25%
50%
75%
100%
McKinsey & Company
Parthenon-EY^
621 Total Data Points
Input Data By Consulting Firm
During the course of 2014, Charles Aris recruiters spoke with over 3,500 strategy candidates, of which over 99% were actively employed with industry leading consulting firms, corporations and private equity firms.
Detailed discussions around compensation happen only on an as needed basis (once a candidate expresses interest in moving forward with an opportunity). For the purpose of this study we have distilled only those compensation data points from candidates that were actively employed by leading consulting firms.
Our 2015 Strategy Consulting Compensation Study is driven by 621 data points from consultants across nine firms.
63.3% of the data points come from The Big Three firms: McKinsey & Company, The Boston Consulting Group and Bain & Company.
Of the 621 total data points, 379 come from post-MBA consultants and 242 come from pre-MBA/undergraduate consultants.
Copyright 2015 Charles Aris, Incorporated. All rights reserved. Not to be utilized by any third party without the prior consent of Charles Aris, Incorporated.
Bain & Company
Strategy&*
Oliver WymanA.T. Kearney
L.E.K. Consulting
The Boston Consulting Group
Monitor Deloitte
*Formerly Booz & Co., now owned by PwC^Formerly The Parthenon Group, now owned by EY
-
This information is confidential and was prepared by Charles Aris, Inc solely for the use of our client; it is not to be utilized by any third party without our prior consent
Average Compensation by Graduation Year
4
Average 2014 Compensation* for Strategy Consultants by Graduation Year
Copyright 2015 Charles Aris, Incorporated. All rights reserved. Not to be utilized by any third party without the prior consent of Charles Aris, Incorporated.
$300,000
$50,000
$100,000
$150,000
$200,000
$250,000
2011Undergrad
2012MBA
2011MBA
2010MBA
2009MBA
2008MBA
N = 22 137 61 22 40 107 75 63 40 28 26Std Dev.** = $4.9k $16.5k $31.9k $46.1k $13.0k $30.5k $26.9k $40.2k $59.2k $47.2k $45.4kMedian** = $85.9k $91.8k $110.2k $137.4k $170.2k $185.6k $212.9k $229.5k $256.8k $275.3k $300.5k% Change1yr^ = N/A 17.6% 30.5% 23.8% N/A N/A 19.0% 15.1% 14.7% 5.2% 14.0%% Change2yr^^ = N/A N/A 58.5% 55.9% N/A N/A N/A 28.3% 28.9% 13.7% 16.7%
2012Undergrad
2013Undergrad
$02013MBA
$173,974
$138,518Salary
$35,456Bonus
$193,791
$150,658Salary
$43,133Bonus
$214,640
$163,024Salary
$51,616Bonus
$233,755
$169,157Salary
$64,599Bonus
$259,606
$184,150Salary
$75,456Bonus
$270,443
$190,252Salary
$80,192Bonus
$305,287
$207,042Salary
$98,245Bonus
$85,670
$74,182Salary
$95,500
$82,660Salary
$117,147
$97,697Salary
$140,960
$112,182Salary
2010Undergrad
2007MBA
$28,778Bonus
$19,450$12,840
$11,488
*Base salary plus target annual bonus only. Does not include retirement contribution, profit sharing, sign-on, car allowance or other such cash equivalents.**Standard Deviation and Median numbers are calculated for base salary plus target annual bonus, i.e. the number at the top of each columnPre-Partner data points only, i.e. we excluded compensation data points from anyone at Partner level or equivalent as it skewed the data significantly.^% Change1yr equals the percentage change in total annual compensation (base salary plus target annual bonus only), from 2013 to 2014, for that graduation year.^^% Change2Yr equals the percentage change in total annual compensation (base salary plus target annual bonus only), from 2012 to 2014, for that graduation year.
-
This information is confidential and was prepared by Charles Aris, Inc solely for the use of our client; it is not to be utilized by any third party without our prior consent
Average Increase in Annual Compensation
5Copyright 2015 Charles Aris, Incorporated. All rights reserved. Not to be utilized by any third party without the prior consent of Charles Aris, Incorporated.
2011 2012 2013 2014
18.0%
10.4% 9.2%13.1%
0%
15%
20%
25%
30%
2011 2012 2013 2014
17.9%
24.1% 23.9% 24.1%
Post-MBAAverage Increase in Annual Compensation
Across All Post-MBA Graduation Years
Pre-MBAAverage Increase in Annual Compensation
Across All Pre-MBA/Undergraduate Graduation Years
10%
5%
0%
15%
20%
25%
30%
10%
5%
The average post-MBA strategy consultant experienced a 13.1% increase in compensation in 2014, a noticeable increase over the previous two years.
The stronger percentage increase relative to previous years was driven by consulting firm retention efforts, which was driven by an increase in demand for strategy talent from corporations, private equity firms and other professional services firms.
Pre-MBA/Undergraduate consultant compensation grew by over twenty percent for the third year in a row.
The available supply of pre-MBA consultants is less than post-MBAs, as pre-MBAs have a wider set of opportunities, including attending MBA school.
Corporations and private equity firms often provide pre-MBA candidates with a double digit raise upon recruiting them, and therefore the consultantancies need to do the same to retain these individuals.
-
This information is confidential and was prepared by Charles Aris, Inc solely for the use of our client; it is not to be utilized by any third party without our prior consent
Trends in Compensation Expectations
6
During the course of 2014 Charles Aris, Inc. noticed the continuation of a trend in the marketplace: consultants are expecting more in total compensation from Corporate America than what they are currently making in consulting (and even more than what we saw in 2012 and 2013).
Copyright 2015 Charles Aris, Incorporated. All rights reserved. Not to be utilized by any third party without the prior consent of Charles Aris, Incorporated.
Most consulting firms remain effectively at capacity and therefore are paying strong salaries and bonuses to retain talent. Consulting firms that acquired a peer firm instituted retention bonuses, some of which will pay out
in 2015 and beyond, and consultants at those firms expect corporations to pay more to offset those future payouts.
One Big 3 firm provided a one-time mid-year raise in 2014, which effectively resulted in two raises during the calendar year, and at least one other firm has announced plans to follow suit in 2015.
Knowing that they are stepping off the steep compensation curve that consulting provides, consultants strive to get out ahead of the curve so as not to lose their strong compensation position after only one year of service in Corporate America.
With so many Corporate America opportunities competing for their services, consultants believe that they have the luxury of saying no to any one opportunity with the expectation that another, higher paying opportunity is right around the corner.
The continuation of multiple factors are behind this trend:
*Source: Charles Aris, Inc. anecdotal data.
Consultant compensation expectations when joining Corporate America*
2009 2010 2011 2012 2013 2014
10-20%LESSthan
consulting
BREAKEVENwith
consulting
10-20%MOREthan
consulting
5-10%MOREthan
consulting
5-10%MOREthan
consulting
10-20%MOREthan
consulting
-
This information is confidential and was prepared by Charles Aris, Inc solely for the use of our client; it is not to be utilized by any third party without our prior consent
7
Below you will find a subset of 2014 offers that were accepted by Charles Aris candidates from Tier 1 Strategy Firms.
Education Consulting FirmConsulting $$
(Base + Bonus%) Industry Offer* Offer TitleCompany
Description
B.S. 2013 Top 9 $80k + 8% $90k+14% Strategy Manager Corporation
B.S. 2012 Top 9 $83k + 40% $100k+10%+$10kS Senior Analyst Corporation
B.S. 2012 Big 3 $90k + 35% $100k+100% Associate Private Equity
B.S. 2011 Big 3 $97k + 29% $135k+41% Strategy Analyst Hedge Fund
MBA 2012 Big 3 $145k + 30% $160k+20%+$20kE Sr. Manager Corporation
MBA 2012 Big 3 $145k + 20% $150k+20%+$20kS+$20kE Sr. Manager Corporation
MBA 2012 Big 3 $140k + 30% $155k+25%+$20kS Associate Corporation
MBA 2012 Top 9 $165k + 40% $165k+30%+$10kS+$50kE Director Corporation
MBA 2011 Top 9 $140k + 7% $155k+25%+$16kS Associate Corporation
MBA 2010 Top 9 $180k + 35% $200k+23%+$35kE Director Corporation
MBA 2009 Top 9 $160k + 45% $170k+35% AVP Corporation
MBA 2009 Big 3 $210k + 40% $200k+75% Director Hedge Fund
MBA 2008 Top 9 $150k + 17% $175k+20%+$20kS Sr. Manager Corporation
MBA 2008 Top 9 $210k+5%+$13kE $190k+25%+$30kS+$57kE Director Corporation
MBA 2007 Big 3 $180k + 60% $205k+35%+$40kS+$75kE Sr. Director Corporation
*First two numbers equal base salary plus target annual bonus (%). S=Sign-On bonus. E=Annual Equity Grant. Does not include other cash equivalents.EXAMPLE: $160k+25%+$15kS+$40kE = Base Salary of $160k, Target Annual Bonus of 25%, Sign-On of $15k, Annual Equity Grant of $40k
PostMBA
PreMBA
2014 Sample Industry Offers
Copyright 2015 Charles Aris, Incorporated. All rights reserved. Not to be utilized by any third party without the prior consent of Charles Aris, Incorporated.
-
This information is confidential and was prepared by Charles Aris, Inc solely for the use of our client; it is not to be utilized by any third party without our prior consent
2014 Offer Ranges by MBA Year
8Copyright 2015 Charles Aris, Incorporated. All rights reserved. Not to be utilized by any third party without the prior consent of Charles Aris, Incorporated.
Below you will find 2014 corporate offer ranges*, at the 25th, 50th and 75th percentiles, for each Post-MBAgraduation year.
2012 MBATitle
Base Salary
Annual Bonus
Annual Equity
Total Package
25th 50th 75th
Associate Manager Sr Manager
$135,000 $150,000 $165,000
10% 20% 30%
$0 $0 $20,000
$148,500 $180,000 $234,500
2011 MBATitle
Base Salary
Annual Bonus
Annual Equity
Total Package
25th 50th 75th
Manager Sr Manager Director
$150,000 $165,000 $180,000
15% 25% 35%
$0 $20,000 $40,000
$172,500 $226,250 $283,000
2010 MBATitle
Base Salary
Annual Bonus
Annual Equity
Total Package
25th 50th 75th
Sr Manager Director Sr Director
$160,000 $175,000 $190,000
20% 30% 35%
$20,000 $35,000 $50,000
$212,000 $262,500 $306,500
2009 MBATitle
Base Salary
Annual Bonus
Annual Equity
Total Package
25th 50th 75th
Director Sr Director V.P.
$175,000 $185,000 $195,000
25% 30% 35%
$30,000 $45,000 $60,000
$248,750 $285,500 $323,250
2008 MBATitle
Base Salary
Annual Bonus
Annual Equity
Total Package
25th 50th 75th
Director Sr Director V.P.
$180,000 $190,000 $200,000
30% 35% 40%
$35,000 $55,000 $75,000
$269,000 $311,500 $355,000
2007 MBATitle
Base Salary
Annual Bonus
Annual Equity
Total Package
25th 50th 75th
Sr Director V.P. V.P.
$190,000 $205,000 $220,000
35% 45% 55%
$50,000 $75,000 $100,000
$306,500 $372,250 $441,000
*Source: Charles Aris, Inc. anecdotal data.
-
This information is confidential and was prepared by Charles Aris, Inc solely for the use of our client; it is not to be utilized by any third party without our prior consent
2014 Offer Ranges by Undergraduate Year
9Copyright 2015 Charles Aris, Incorporated. All rights reserved. Not to be utilized by any third party without the prior consent of Charles Aris, Incorporated.
Below you will find 2014 corporate offer ranges*, at the 25th, 50th and 75th percentiles, for each Pre-MBA/ Undergraduate graduation year.
2012 Pre-MBA
Title
Base Salary
Annual Bonus
Annual Equity
Total Package
25th 50th 75th
Analyst Analyst Sr Analyst
$80,000 $90,000 $100,000
5% 10% 15%
$0 $0 $0
$84,000 $99,000 $115,000
2011 Pre-MBA
Title
Base Salary
Annual Bonus
Annual Equity
Total Package
25th 50th 75th
Analyst Sr Analyst Associate
$90,000 $100,000 $110,000
10% 15% 20%
$0 $0 $0
$99,000 $115,000 $132,000
2010 Pre-MBA
Title
Base Salary
Annual Bonus
Annual Equity
Total Package
25th 50th 75th
Sr Analyst Associate Sr Associate
$100,000 $110,000 $120,000
15% 20% 25%
$0 $0 $15,000
$115,000 $132,000 $165,000
*Source: Charles Aris, Inc. anecdotal data.
-
This information is confidential and was prepared by Charles Aris, Inc solely for the use of our client; it is not to be utilized by any third party without our prior consent
Consultant Competencies
10
The matrix below defines the expected competencies for consultants at each level for the 2014 recruiting year.
Breakdown of Consultant Competencies by Position
Years of Experience
1-3 yrsPre-MBA
1-2 yrsPost-MBA
3-4 yrsPost-MBA
5-7 yrsPost-MBA
8+ yrsPost-MBA
CurrentEducation
2011-2013 undergraduate
degree
2013-2014 MBA
2011-2012 MBA
2008-2010 MBA
2007 and earlier MBA
25%
50%
75%
100%
(Consultant Competencies defined on next slide)
Project Mgmt.
Case Cracking
Analytics/ Slide Building
Analyst Manager
Influencing/Leading
Case Cracking
Project Mgmt.
Analytics/SlidesPrincipal
Selling/ Influencing/
Leading
Case Cracking
Project Mgmt.
Partner
Selling/ Influencing/
Leading
Case Cracking
Project Mgmt.
Associate
Analytics/ Slide Building
Project Mgmt.
Case Cracking
Influence/Lead
Analyst Associate Manager Principal PartnerTitle at
Consulting Firm*
*Note that titles differ significantly by firm. These are meant to serve as generic titles that work across all firms.
Copyright 2015 Charles Aris, Incorporated. All rights reserved. Not to be utilized by any third party without the prior consent of Charles Aris, Incorporated.
-
This information is confidential and was prepared by Charles Aris, Inc solely for the use of our client; it is not to be utilized by any third party without our prior consent
Consultant Competency Definitions
11
Analytics/ Slide Building
Conduct quantitative analyses in a defect-free manner. Possess mastery of Microsoft Excel.
Leverage Microsoft PowerPoint to create impactful, concise, and defect-free slide loops.
Selling/ Influencing/
Leading
Generate revenue by selling consulting services. Establish vision, frame key issues and set high
level strategy. Influence key executives and stakeholders to
support significant change.
Project Management
Understand strategic direction as set by the hypothesis driven approach, set milestones, scope analysis, assign resources, manage execution and report findings.
Serve as quality control lead.
Case Cracking
Understand the problem at a more granular level and establish a hypothesis driven approach through which a solution can be derived.
Effectively, solve the problem. Write the storyline.
SeniorLevel
Competencies
JuniorLevel
Competencies
Copyright 2015 Charles Aris, Incorporated. All rights reserved. Not to be utilized by any third party without the prior consent of Charles Aris, Incorporated.
-
This information is confidential and was prepared by Charles Aris, Inc solely for the use of our client; it is not to be utilized by any third party without our prior consent
Charles Aris, Inc. Strategy Practice
12
Jody KaravanicSenior Practice Leader336-378-1818 ext. [email protected]
Caroline WilsonSenior Practice Leader336-378-1818 ext. [email protected]
Copyright 2015 Charles Aris, Incorporated. All rights reserved. Not to be utilized by any third party without the prior consent of Charles Aris, Incorporated.
Steven StewartSenior Practice Leader336-378-1818 ext. [email protected]
Jillian JitimaProject Manager336-378-1818 ext. [email protected]
Chad OakleyPresident336-378-1818 ext. [email protected]
Charles Aris, Inc. is a national executive search firm that was founded in 1969. The Strategy & Business Development division at Charles Aris is led by Chad Oakley, a former Bain & Company consultant and Wharton MBA.
Since its inception in 2003 the Strategy & Business Development division has placed over three-hundred candidates, at multiple levels, including Vice President, Director, Manager and Analyst.
The division's client base falls into three categories: the Corporate Strategy teams of industry leading Fortune 500 companies, the investment and portfolio management teams of leading Private Equity firms, and professional services firms, including consultancies and the like.
The candidates that we place typically work for top tier strategy consulting firms and possess undergraduate and graduate degrees from the world's leading educational institutions.
For more information, please contact any of our team members as shown on this page or visit www.charlesaris.com.