According to 2018 stats, McKinsey, the undisputed leader of the consulting world, had over 27,000 employees spread across 127 offices worldwide, and a revenue of up to $10 billion. Started in 1926, it has been a trailblazer in the management consulting industry, attracting the very best staff, and working with up to 90% of the world’s top companies.
Especially if you are considering an application to McKinsey, though, perhaps the fact you want to know most is what your remuneration will be like working for the firm. That is, if you manage to jump all the hurdles to get through resume screening, the McKinsey Digital Assessment, and multiple rounds of case interviews – what’s the pay like?
Of course, you could also just be curious. This company, which has spawned any number of fortune 500 CEOs and eminent politicians – surely they must be paying quite well?
Whichever is the case, wonder no more! This article looks at how much McKinsey Consultants earn and what factors influence their salaries.
How Much Does McKinsey Pay in the US?
While McKinsey keeps exact pay figures close to its chest, we have an excellent idea of the average US salary for each promotion level. Let’s take a look:
Other Factors Determining Exact Salary
Of course, in a global company like McKinsey, many other factors determine what any staff member will correctly receive in their pay packet.
Let’s take a look at the main variables:
The place, i.e., city or country, determines the salary you receive. So, staff on the same level at McKinsey, but working at different geographical areas may not earn precisely the same amount.
Several factors contribute to this; the divergent work culture, the cost of living in the area, and the regional labor market.
These factors are worth paying attention to when choosing a target office, as the differences may not track the cost of living and tax rates very well.
Other than the salary, also look at the cost of living and taxes before you relocate to another city as these, too, may eat into your salary.
For example, in New York, consultants get paid a lot more than in London, despite similar costs of living across the two cities. Also, consultants in London will get paid less and still pay more tax than those in Dubai.
Even professionals working at the same level in a country, but within different cities, may still have different paychecks.
The highest-paid consultants at McKinsey are those working in NYC. Also, LA, Chicago, San Francisco, and Seattle join the list of different cities with handsome remuneration.
Take a look at the average salary distribution for consultants across different cities in the US:
2. Specialist Roles
Offices in different locations will often specialise in prominent local industries. Thus, an office in a fossil fuel rich nation might have a strong oil and gas focus.
How much you get depends on what regional office you apply at and the relevance of your skills. It also determines your significance and, thus, the chances of them accepting you.
Applying to the right office that matches your skills expands your exit opportunities. With experience in your field of specialty, you build your profile. So, when you opt to parachute out of consulting, you would have strong bargaining points.
At McKinsey regional office that works mainly with financial companies, you enhance your chances of winning a better offer in the financial sector when you eventually decide to leave.
What’s more, some sectors pay well than others. Some lucrative segments include Business Strategy, Capital Markets, Change Management, and IT consulting. Gurus in those sectors may earn 15% more than their counterparts in Data Analysis, Financial Markets, and Sales & Marketing.
Due to the gruesome nature of management consultancy, like most leading players in the industry, McKinsey uses the up or out policy! It demands that you keep the upward trajectory, but if you cannot, they let you go. There’s no room for complacency here.
Accordingly, promotion is not optional but a necessity if you must continue working with them.
Your negotiation power for better pay, nonetheless, hinges on your skills and experience. A fresh graduate may not have enough skills to leverage. With time, they can use their accumulated expertise to demand better compensation and more flexible work conditions.
Generally, McKinsey uses internal factors such as profitability, and external factors like competition and the candidate pool, to determine the salary rates.
As you gain experience, you progress to higher ranks, get managerial roles, or even get into partnerships. With more skills and experience, comes more power to negotiate and determine your salary increases.
Here is the salary distribution among different levels in consulting firms:
Bonuses are one of the most significant factors determining the overall income of almost any management consultant.
Bonus structures vary between consulting firms with various profit sharing and other arrangements in place in different companies.
At McKinsey, consultants can hope to earn a performance-related bonus of up to 20% per annum. A nice top-up to a generous pay packet!
Something to Bear in Mind
Whether you thought of applying to a consulting firm or were just curious about what life is like at McKinsey. It might sound strange at first, but a consultant continues earning money via McKinsey long after they leave the firm.
Well, let’s explain! McKinsey would be paying you a salary or a bonus. Instead, it pays through the expertise you acquired during your time with them. Every firm wants an employee with skills horned at McKinsey.
By sheer association with the brand, many lucrative opportunities and employment doors open up for you. In this sense, being a McKinsey alumnus pays a premium for the rest of your life.
Challenging but rewarding for life
Working with McKinsey management consulting is one of the most prestigious opportunities. Though it is very demanding, it comes with excellent remuneration and career expanding opportunities.
You don’t have a reason to sit on the fence. If you have a sharp mind, good grades, and have the desire, the drive, and specific, quantifiable goals, McKinsey is ready for your application.