How Much Money Will You Make as a Management Consultant?
With the global economy on the rise, the consultancy industry is closely tied with it. Today, the total value of the consulting sector is said to be around $250 billion. At this number, it is also one of the largest and one of the most mature markets in the professional services industry.
Management consultants are a dire necessity. Increased competition and a need to outdo the competition is greater than it has ever been in the past. A management consultant can offer a business specialized performance supervision to help organizations get to the top. From operation consultants and financial consultants to human resources, risk and compliance, and strategy consultants, all types of management consultants are in demand.
It is no wonder then that management consultants are not only much sort after but also well paid. Here is a breakdown of the salary of a management consultant:
Average management consultant salary
Before getting into the salary breakdown of a management consultant at different stages of their career, let’s look at the average management consultant’s salary. In the United States, the average management consultant salary is $86,543.
But the average salary of a management consultant in the USA would vary from one state to another. For example, according to Glassdoor, the average salary of a management consultant in San Francisco, CA, is $1,13,306. Other sources state that it is $104,644 per year, which is 20% above the national average. In Florida, the average salary for a management consultant is $64,814. This is 25% below the national average.
Then again, the average salary would vary according to the company that hires them. For example, some companies offer a salary as high as $148,472 per year, while others offer $85,835 per year. The average salary of a management consultant of an hourly intern would be around $34 per hour.
The average annual salary of a management consultant would also depend on their specialty. For example, a risk management consultant in the United States would make an average of $111,214 per year. The average annual salary of a financial consultant is $67,078 per year.
To summarize, the average salary of a management consultant would vary according to state, organization, and specialty.
According to the comprehensive guide for management consulting salary, 2019, the average entry-level salary for a fresh graduate in the United States from a recognized undergraduate institute is $83,500. This is only the base pay. Performance bonuses are anywhere between the range of $12,000 and $18,000. Signing bonuses are an average of $5,000 for entry-level management consultants.
Top tier firms offer an entry-level salary of around $83,500. The average performance bonus at these companies for an entry-level management consultant is around $15,775.
McKinsey offers its fresh graduates who enter management consulting a base salary of $83,000. Along with performance bonus, relocation assistance, and signing bonus, a fresh graduate can earn around $108,000 to $116,000.
Bain offers a slightly higher base salary but a lower performance bonus. A fresh graduate can earn anywhere between $103,025 and $109,025.
BCG offers the highest base salary at $84,000. Along with performance and signing bonuses and relocation assistance, a graduate can earn between $107,800 and $113,800.
The average annual consulting salaries for entry-level jobs in the US also varies according to the specialization. An entry-level strategy consultant can receive an average annual salary as high as $82,297. An entry-level financial consultant gets an average annual salary of $59,856.
Management consultants with MBAs salary
The value of a management consultant with an MBA is much more than management consultants without an MBA.
The biggest consulting firms also hire more MBA graduates than any other type of company. An MBA in consultancy helps graduates to cultivate business expertise and offers them deep insight into businesses.
According to the 2019 edition of Management Consulted, an MBA graduate can earn nearly double of what an Undergraduate or a master’s degree holder will earn. So, if a fresh graduate or master’s degree holder earns an average of $80,000, an MBA can earn $150,000.
While the signing bonus of a fresh graduate is $5,000, the signing bonus of an MBA holder is roughly $25,000.
Add performance bonuses to the above figures, and graduates can earn $12,000 in performance bonuses as opposed to $44,000 earned by MBAs as performance bonuses.
Consultancy giants McKinsey, Bain, and BCG (MBB) have all increased the starting pay of MBAs to $165,000 in the last year.
A new trend is for organizations to put graduates and master’s degree holders in the same bracket, and MBAs and PhDs are put in the same bracket. So, instead of spending time getting a master’s degree or a Ph.D., management consultants are better off when they possess an MBA from a reputed institute.
Project management consultant salary
A project management consultant has a very complicated role that includes very detailed planning, attention to detail, foresight, and also access to the right tools to execute orders. They should also have the ability to give orders. A project management consultant’s job is very complicated, and therefore, they are also paid higher than other management consultants.
An entry-level project management consultant with 0 to 2 years of experience can earn between $65,386 and $77,895 – depending on the state they work in.
A mid-level project manager can earn between $85,584 and $101,957 – depending on the state they work in.
Senior-level project managers with over six years of experience can earn between $104,959 and $118,566 – depending on the state they work in.
The value of a project manager is higher in southeastern US states like Louisiana, Alabama, Kentucky, Florida, North and South Carolina, and Mississippi. New Jersey is also the best place to work as a project manager; however, the cost of living here is very high.
The average hourly wage of a project management manager in the United States is $65.
Senior management consultant salary
The National average salary of a senior management consultant in the United States is $129,000. ZipRecruiter, a leading recruiter firm, says it sees salaries as high as $162,000 and as low as $90,000; however, most senior management consultant salaries are between $106,000 and $149,500. The average monthly salary for senior management consultants across the United States is $10,750. The weekly salary is an average of $2,481, and the hourly salary is an average of $62.
Why management consultants are highly paid?
A common question is why management consultants are paid such ridiculously high salaries.
A management consultant or a management consultancy can help an organization become more productive and efficient. Management consultants can help organizations reach their corporate goals – even during the toughest financial crises. Being experts in their field, management consultants are privy to management skills and trends the most companies may not be privy to.
A management consultant is extremely valuable to an organization. They can help an organization improve its productivity, company image, and other aspects of the business. They have the expertise to identify current problems and potential risks, and then help organizations to overcome them by laying out clear-cut plans and goals.
The tasks of a management consultant include developing, recommending, and implementing improvements in an organization to make it more successful than it already is. Recommendations and implementing improvements are also made to help organizations get out of big problems they find themselves in.
A big part of a management consultant’s job is also to train clients on business development processes.
Besides the above reasons, even junior consultants do most of the work that companies pay big money for. They have to convince corporate executives to trust their strategies. Consultancies, on their part, hire the brightest as they are the most sought-after.
Insurance for management consultants
Sometimes, clients might experience failure because of the advice given to them by their consultant. When this happens, the client often files a case against the consultant as well as the business organization the consultant works for. The client could accuse the consultant of negligence, miscommunication, omission, error, or improper services.
For this reason, all management consultants and management consulting firms should consider purchasing professional liability insurance for management consultant. Professional liability insurance covers the costs of a legal claim filed against a management consulting company and its employees (management consultants). It can cover the costs related to a settlement, court judgment, as well as the fees for hiring a lawyer. Very often, a client will require that you are insured with professional liability insurance for a management consultant before hiring you.
So, whether you are planning to become a management consultant or are already one, and no matter where in the United States you practice, professional liability insurance can protect your business assets.
Insureon. 2019. most in demand consulting jobs. [ONLINE] Available at: https://www.insureon.com/blog/post/2019/03/04/most-in-demand-consulting-jobs.aspx. [Accessed 3 September 2019].
Consultancy.UK. 2019. Consulting Industry. [ONLINE] Available at: https://www.consultancy.uk/consulting-industry/global. [Accessed 3 September 2019].
TechPrevue. 2019. Management consultant firms great demand. [ONLINE] Available at: https://www.techprevue.com/management-consultant-firms-great-demand/. [Accessed 3 September 2019].
ZipRecruiter. 2019. Risk management consultant salary. [ONLINE] Available at: https://www.ziprecruiter.com/Salaries/Risk-Management-Consultant-Salary. [Accessed 3 September 2019].
PayScale. 2019. Management consultant salary. [ONLINE] Available at: https://www.payscale.com/research/US/Job=Management_Consultant/Salary. [Accessed 3 September 2019].
CaseInterview.com. 2019. Consulting salary. [ONLINE] Available at: https://www.caseinterview.com/consulting-salary. [Accessed 3 September 2019].
MBA Crystal Ball. 2019. Consulting salaries freshers entry level. [ONLINE] Available at: https://www.mbacrystalball.com/blog/2019/04/08/consulting-salaries-freshers-entry-level/. [Accessed 3 September 2019].
Poets and Quants. 2019. What MBAs earn at top consulting firms in 2019. [ONLINE] Available at: https://poetsandquants.com/2019/01/15/what-mbas-earn-at-top-consulting-firms-in-2019/. [Accessed 3 September 2019].
ProjectManager. 2019. Project manager salary 2019. [ONLINE] Available at: https://www.projectmanager.com/blog/project-manager-salary-2019. [Accessed 3 September 2019].
Salary.com. 2019. Project management manager hourly wages. [ONLINE] Available at: https://www.salary.com/research/salary/benchmark/project-management-manager-hourly-wages. [Accessed 3 September 2019].
ZipRecruiter. 2019. Senior manager consultant salary. [ONLINE] Available at: https://www.ziprecruiter.com/Salaries/Senior-Management-Consultant-Salary. [Accessed 3 September 2019].
Glassdoor. 2019. San Francisco management consultant salary. [ONLINE] Available at: https://www.glassdoor.co.in/Salaries/san-francisco-management-consultant-salary-SRCH_IL.0,13_IM759_KO14,35.htm. [Accessed 3 September 2019].