Big Three Consulting Firms Delay Start Dates for MBA Hires

The Wall Street Journal recently reported that the big three consulting firms—McKinsey, Bain, and BCG—have delayed start dates for MBA hires. The firms, together nicknamed MBB, are perennially among the top employers of MBA graduates, as is the broader consulting industry. 

McKinsey plans to onboard MBA hires in a staged manner from post-graduation through February 2024. Similarly, a BCG spokesperson confirmed that they too plan to stagger start dates for MBA hires from late 2023 to January 2024. 

Bain, taking a different tact, offered its MBA recruits compensation to accept an April 2024 start date. For those impacted, Bain’s financial incentives include $40,000 to work for a nonprofit, $30,000 to learn a new language or take on another academic endeavor, and even $20,000 to become a yoga instructor or take a safari. 

According to the WSJ, the Big Three are not alone in adjusting their hiring practices this year. The article highlighted a recent analysis by William Blair & Co., showing that job postings at EY, Deloitte, KPMG, and PWC have declined by 62 percent year-over-year. 

Poets & Quants reached out to MBA career center professionals for additional insight into how the delays are impacting students. Most maintained their optimism. 

“We have yet to see (knock on wood) any offers—consulting or otherwise—get rescinded. What is impacting our Class of 2023 MBA graduates are start dates being pushed back. Most firms employing Scheller MBAs have offered a range of dates that are definitely later than in prior years. And at least one firm has offered some financial incentive to students who accept later dates. That is about the extent of it at this point,” Dave Deiters, Associate Dean of MBA Programs at Georgia Tech’s Scheller MBA Career Center, said.

Jeff McNish, Assistant Dean of the Career Center at University of Virginia’s Darden, also describes the impact as relatively minimal. “To date, we have not been made aware of any frozen or rescinded offers for consulting in the class of 2023. We have had one company ask a small set of students going to a specific city to consider changing the start date to later this year or early next year. It has impacted fewer than six of our students. This is the extent of what we know at present,” he said.

One unnamed career center director at a top-20 MBA program hypothesized to P&Q that the delayed start dates are simply “a reset to previous years.” They explained that in hot economic times, consulting firms ask MBA hires to start work soon after graduation, but that in slower economic periods it is not atypical for firms to opt for later start dates.

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Salary Increases Outpace Inflation for Most MBAs

Are post-MBA salaries living up to the degree’s promise? In most cases, the answer is yes. 

Using their rankings data, Bloomberg Businessweek analyzed MBA starting salaries from 2018 to 2022 compared to the inflation rate during the same period (17.6 percent). And they found growth that outpaced inflation in seven industries, including two of the most prominent for newly minted MBAs. These include Consulting (salary increased by 19.5 percent between 2018 and 2022), Technology (+18.8 percent), Defense and Aerospace (+20.9 percent), Government/Politics/Lobbying (+19.4 percent), Telecommunications (+27.3 percent), Education (+43.8 percent) and Construction (+20.8 percent). 

The median salary growth for MBA alumni also outpaced inflation. The reported median earnings for MBAs six years post-graduation grew 28.1 percent between 2018 and 2022. The growth rate compares favorably to both the inflation rate (17.6 percent), and the national median earnings for all full-time workers (18.7 percent). 

Poets & Quants created a similar analysis using their data to determine how the growth in median earnings between 2018 and 2022 compared to the inflation rate amongst top-ranked MBA programs. They found that at the top 27-ranked schools, the growth in starting base salary between 2018 and 2022 averaged 24 percent, well above the inflation rate, and at the top seven schools it averaged 26.7 percent. NYU Stern garnered the highest growth rate (36 percent), followed by Columbia, Chicago Booth, and Dartmouth Tuck. In fact, just three of the top-ranked schools posted median starting salary growth rates below the inflation rate: UCLA Anderson (16.8 percent), UNC Kenan-Flagler (8.3 percent), and Washington University in St. Louis (9.1 percent). 

NYU Professor Urges MBA Students to Think Beyond Consulting, Finance, and Tech

A recent WSJ op-ed by Suzy Welch, CNBC Contributor, Author, and Professor at NYU Stern provides career advice for MBAs: Although consulting, finance, and tech are the most commonly sought careers post-MBA, they are not the only routes to success. Welch advises MBAs to seek work, “at the intersection of their authentic values, their strongest skills and aptitudes, and the kind of work that interests and excites them intellectually and emotionally.” But, she points out, despite most students entering MBA programs feeling awash with career possibilities, most leave with jobs in just three industries. 

Finding purpose is an idea that she’s put a lot of thought into. After the loss of her husband, the legendary Jack Welch, she realized her need to find an “organizing principle” in her life. Welch then developed, pitched, and is now teaching a course at NYU Stern on the topic. Designed to guide MBAs on an introspective journey towards a fulfilling career path, the course is titled “Becoming You: Crafting the Authentic Career You Want and Need.” She describes it, according to Poets & Quants, as the class she wishes that she’d been able to take before graduating from Harvard Business School and entering into consulting. 

In her WSJ article, Welch identifies two key patterns emerging within MBA programs that are reducing opportunities for graduates. The first is internal: groupthink. She described this phenomenon In an interview with Poets & Quants. “You go to business school and you think about strategy and the digital economy, but what about thinking about what you want to do with your life? Most people go to business school to pivot into a new career... So you get there and you are looking around and the choices get narrower and narrower because of groupthink. You arrive big-eyed and you end up squinting. Investment banking and consulting are the two big funnels, or maybe tech,” she says. 

While she notes that some MBAs may also be seeking financial security and a way to repay loans, she purports that it runs deeper. That, for many, taking a job in one of the big three—consulting, finance, or tech—is fulfilling a “group instinct” and is good for “optics.” And as is so often the case with groupthink, MBA students who opt not to apply for these lucrative positions, or those who turn down such offers, can feel foolish or like risk-takers. But she warns that many who do follow that path as a means for safety and security often end up regretful. “A lot of very smart, very capable people, usually in their late 30s and early 40s, wake up miserable one day. Over my years as a journalist specializing in the workplace, I saw this phenomenon so often I came to dub it “The Velvet Coffin”—a state of cushy creature comfort encased in emotional or intellectual dissatisfaction” she writes.

Welch also observes a second pattern and it is external. Industry, she calls out, does a poor job showing up to recruit and sell itself among MBAs. Whereas, consulting, finance, and tech recruiters not only show up but have excelled in creating touchpoints and programming, and defining a consistent and compelling “narrative.” 

“I heard it repeatedly, because my students parroted it back to me: Even if you don’t stay long-term, with our credential on your résumé and professional development programs, we’ll set you up for your career! The big three are so persuasive and make it so convenient to get a job that it ends up feeling inevitable,” she writes. 

Welch concludes that MBA students, like never before, are seeking meaning and purpose from their careers and their lives. And she advises them to think carefully about their goals, listen, and dare to consider opportunities beyond the big three industries.

Consultants with MBAs Report Higher Job Satisfaction

Considering a career in consulting? An MBA may do more than just improving your chances of landing a job. According to a recent Poets & Quants article, consultants who have MBAs report a better employee experience within consulting firms than those who have obtained an undergraduate degree alone. In fact, MBAs report higher satisfaction than their bachelor’s degree holding counterparts across all Quality of Work and Life dimensions that were measured in a consulting ranking by Vault and analyzed by Firsthand, an industry intelligence platform. 

MBAs noted significantly higher satisfaction with international opportunities, compensation, client interaction, level of challenge and benefits, while the two groups aligned more closely in satisfaction on “big picture items” such as business outlook, innovation in industry, firm leadership, and supervisor relationships. 

Below, we’ve included a chart showing the various Quality of Work and Life dimensions, along with the average satisfaction scores (with ten as the highest score) for MBAs and those with undergraduate degrees alone.

Source: Poets & Quants

MBA Programs Increasing Use of Virtual and Tech-Enabled Recruiting Processes

The MBA Career Services and Employer Alliance (CSEA) recently shared the results of its 2021 Fall Recruiting Trends Survey. The findings show that recruiting is bouncing back to pre-pandemic levels for full-time MBA students, particularly within the consulting, technology, healthcare, and financial services industries. But certain pandemic trends may be here to stay. The findings highlight the continued relevance of virtual engagement opportunities between students, career services, and employee recruiters. 

The survey includes responses from 77 CSEA member schools, who completed the survey in January of 2022. 

Among full-time MBA programs, just over two-thirds of schools (35 percent) report that on-campus recruiting opportunities for MBA students, which includes in-person or virtual interviews organized through the school, are up this academic year compared to last. Just 27 percent report that opportunities are down, a sharp decline from 47 percent in 2020. Similarly, the majority of schools (74 percent) report that off-campus recruiting and job postings have increased in 2021. 

Most schools report increases in recruiting activities for full-time post-MBA employment within the consulting (84 percent), technology (82 percent), and healthcare (69 percent) industries. Schools continued to see decreased recruiting activity within the hospitality sector (33 percent), although the number of schools that experienced these decreases was smaller in 2021 than in 2020 (61 percent). Most schools’ recruiting activity, 76 percent, increased among large firms (more than 500 employees), and 63 percent saw increases in recruiting by mid-size firms (100-500 employees). The survey results note that, in previous years, schools were most likely to indicate recruiting increases by firms not headquartered within the school’s geographic region, which in 2021 was the third-largest increase (63 percent). 

In the survey, schools were also asked how student engagement with various career support activities compared to the prior year. The biggest increases were with one-on-one coaching appointments (50 percent of schools), virtual career fair participation (48 percent), and group coaching sessions (47 percent). Conversely, student engagement decreased the most among in-person career fair participation (58 percent of schools), on-campus interviewing (49 percent), and information session attendance (42 percent). 

Fall 2021 also brought changes in students’ interactions with recruiting activities. Most schools report that employers’ use of virtual interview technologies increased (90 percent), as did the use of AI-powered pre-interview screening tools (75 percent). A large number of schools, 68 percent, indicate an increasing use of virtual multi-school events. Schools also note growth in alumni-initiated hiring (62 percent), and virtual career fairs (61 percent). Conversely, almost two-thirds of schools report a decrease in student engagement with in-person career fairs (64 percent). 

Similar to the full-time employment recruiting trends, both off and on-campus opportunities for internship recruiting were more positive in 2021 than in 2020. Almost two-thirds of schools, 65 percent, report an increase in off-campus internship opportunities for full-time MBAs. And, over one-third, 36 percent, report that on-campus activities have increased, which compares favorably to the 16 percent of schools that reported increases in 2020. Again, similar to the full-time recruiting trends, most increases in internship recruiting were within the consulting (73 percent of schools) and technology (71 percent) industries. Financial services (60 percent) came in third. 

A large proportion of summer internships in 2021 remained in a virtual format. More than half of schools (56 percent) report that over 60 percent of their students’ 2021 summer internships were virtual, whereas in 2020, over 83 percent of schools reported predominantly virtual internships.   

Find the full survey results here, including data on full-time and internship recruiting for part-time MBA and specialized masters programs. 

Post-Pandemic, Prospective MBA Students Express Greater Interest in Hybrid Learning and One-Year Full-Time MBA Programs

The Graduate Management Admissions Council (GMAC) recently released the 2022 results summary from its Prospective Students Survey. The survey, which was issued in 2021, garnered over 6,500 responses from prospective MBA students around the world. The resulting summary examines the shifting preferences of prospective students as a result of the COVID-19 pandemic and its impact on the delivery models of graduate management education. 

Below we provide a high-level summary of the findings. The full GMAC results summary is available here. 

While respondents do not feel that online and in-person formats provide the same value, there is growing interest in hybrid models. 

• Globally, respondents are still more likely to disagree that an online and an in-person graduate management degree offers the same level of opportunity in terms of networking (79 percent), value (73 percent), and career prospects (66 percent). But respondents are slightly less negative in 2021 than they were in 2020.   

• Globally, 20 percent of respondents in 2021 prefer a hybrid delivery model, an uptick from 14 percent in 2019. 

• Hybrid programs are particularly attractive to prospective students interested in an Executive MBA, Part-time MBA, or Flexible MBA, although interest in hybrid models increased significantly for all program types between 2019 and 2021.  

Consulting continues to top prospective students’ industry and job function preference lists, though interest in the technology industry continues to grow. 

• While both men and women express interest in consulting, men are more likely than women to select consulting as their industry (+8 percentage points) and job function (+9 percentage points) of choice. 

• Women are more likely than men to express interest in the marketing (+12 percentage points), media and communication (+9 percentage points), media/entertainment (+7 percentage points), and non-profit (+6 percentage points) industries.  

• Globally, interest in the technology industry increased three percentage points from 2019 to 39 percent in 2021. Among non-business undergraduate majors, technology is the most sought-after industry (49 percent). In 2021, a growing number of women expressed interest in technology compared to 2019 (+5 percentage points). 

• Prospective students most frequently list their post-degree career goals as: obtain a senior level position, get a raise/salary increase, obtain an executive level position, manage people, manage projects, and work for a company where they can travel internationally. 

• “Become the CEO of a company” provides a notable gender disparity within career goals. Globally, 31 percent of males list this as a career goal, while just 24 percent of females do. In general, U.S.-based respondents are less likely to name this as a goal (21 percent). 

• In 2021, the number of prospective students interested in changing industries or job functions (32 percent) returned to pre-pandemic levels after an uptick in 2020 (36 percent). Among U.S. respondents, a higher percentage are looking to make a career change (42 percent) which is, again, consistent with pre-pandemic levels (41 percent in 2019). 

International prospective students are more favorable on the use of standardized admissions tests.  

• Similar to pre-pandemic levels, about ten percent of prospective students say that having to take a standardized admissions test may deter them from applying. 

• About 60 percent of international students agree that standardized admissions tests improve fairness and reliability in evaluating applicants, and that they allow candidates to demonstrate academic readiness. Among U.S.-based prospective students, the number agreeing with those statements hovers closer to 50 percent. Similarly, while 63 percent of international respondents feel that standardized admissions tests increase transparency, just 55 percent of domestic respondents do. 

• While about half of respondents (52 percent) agree that test waivers make it easier to apply to a program, fewer agree that test waivers make it easier for applicants to gain admission (44 percent). 

• About 40 percent agree that the criteria to obtain a test waiver does not apply to a large proportion of applicants (43 percent) and the criteria to obtain a waiver is complex (40 percent). About one in five feel that schools should not offer test waivers for the 2021 admissions cycle. 

“Big Three” Consulting Firms Announce Increase to MBA Starting Salaries

McKinsey, Bain & Co., and Boston Consulting Group have once again earned top billing in Vault’s 2022 “Best Consulting Firms.” Bain & Co. took the top spot with McKinsey scoring just .001 behind in second, and Boston Consulting Group dropped one notch to third. The ranking, which aggregates survey responses from over 17,000 consultants and 130 firms, creates a composite score based on 16 variables including compensation, diversity, work-life balance, job satisfaction, and prestige, among others. 

Bain scored within the top five across all 16 components, including top scores for informal training and relationships with supervisors. McKinsey and Boston Consulting Group received 15 scores within the top five. McKinsey earned top billing for innovation, internal mobility, selectivity, and international opportunities, while Boston Consulting Group received the top rank for firm leadership, overall business outlook, health and wellness, promotion policies, as well as compensation and benefits. 

In even better news for prospective and current MBA students interested in pursuing a career in consulting, the big three also just announced that starting salaries for MBA hires will increase in 2022 by $10,000. This will bring the starting salary up to $175,000 and total compensation packages up by between four and nine percent. In addition, McKinsey recently announced that it will hire its largest summer internship class to date. The firm, which is expanding geographically and functionally, expects to recruit 800 interns, which will include a large number of first-year MBA students.

So, from which schools will they likely recruit? A recent Poets & Quants analysis explored the “feeder schools” for each of these companies, using data from the Wall Street Oasis 2022 Consulting Industry report. For McKinsey, the top feeder schools are University of Toronto, Northwestern, Harvard, University of Michigan, Dartmouth, and Georgia Tech. For Bain—UT Austin, UVA, Harvard, University of Michigan, and Duke. And for Boston Consulting Group—the University of Pennsylvania is by far the largest feeder school, followed by Yale, MIT, and the London School of Economics. 

Technology Growth Expected to Drive MBA Hiring

The 2022 hiring outlook for MBA graduates is strong. After the early stages of the pandemic caused demand to falter for 2020 graduates, both hiring and salaries have rebounded to pre-pandemic levels. The QS Global Employer Survey 2022, which included over 5,000 MBA employers from 40 countries, found that 70 percent of US employers expect to hire more graduates within their organization in the next year.

Technology firms, which have shown consistent growth throughout the pandemic, are expected to drive demand for MBA graduates. Technology recruiters' interest in hiring MBAs has grown over time according to the 2021 GMAC Corporate Recruiters Survey, with the number of technology recruiters planning to hire MBAs climbing from 80 percent in 2019 to 96 percent in 2021. Similarly, the QS Global Employer Survey found that just over 50 percent of US companies offered MBA graduates roles in IT and technology, in both 2020 and 2021, compared to 27 percent receiving those functional roles globally (2021). 

Amazon reported that in 2021 they increased MBA hires by 20 percent due to growth in demand for their products and services. Speaking to BusinessBecause, an Amazon spokesperson explained that the company hires were based on demand and that, “We work with business teams across Amazon to determine their need for student talent each hiring season.” The spokesperson also noted that they expect hiring to continue to increase in 2022. Other large employers of MBAs in technology include Google, Microsoft, and Apple. 

Consulting will also continue to play a large role in MBA hires. With the US management consulting market size projected to grow by 4.1 percent in 2022, demand for MBAs from consulting firms is expected to remain high. GMAC’s Corporate Recruiters Survey found that 95 percent of consulting recruiters plan to hire MBAs. And, In 2021, 46 percent of those recruiters said that they expected to increase their MBA hires, compared to just 21 percent in 2020. McKinsey, BCG, and Bain have historically employed the largest number of MBA graduates and will likely continue to do so. 

As companies throughout the US struggle with hiring and retaining the skilled workforce that they need, MBA graduates are well positioned to thrive. Economists are speculating that omicron could continue to impact the overall employment rate, pointing out that, across industries, quit rates have remained high, but hiring rates remain even higher. “Workers being able to quit their jobs to take better ones is a very good thing and signals an economy with healthy dynamism,” said Economic Policy Institute President, Heidi Shierholz. “A high quit rate combined with strong job growth is absolutely something to celebrate.”  

Related blogs:

Amazon to Include Larger Swath of Schools in MBA Recruiting Using Virtual Meetings

Our Ways of Working are Changing. How should MBAs Prepare?

MBA Employment Trends and Projections

Demand is high for recent MBA graduates. In 2017 in the U.S. and Canada, technology firms increased year-over-year MBA hiring by 22 percent and consulting and financial services firms increased hiring by 7 percent and 4 percent respectively. The same report (QS Top MBA Jobs & Salary Trends Report 2018)  projects that overall MBA recruiting in the U.S. and Canada will continue to demonstrate robust growth in 2018 (7 percent) and marginal growth in 2019 (2 percent).   

Technology: The growth in technology firms’ MBA hiring corresponds with reports that Amazon is hiring about 1,000 MBA graduates per year, almost double that of the next largest MBA employer, consulting firm McKinsey[i]. And the growth isn’t expected to slow in 2018. The QS Top MBA Salary Trends Report projects that recruiting in the U.S. and Canada by technology firms will continue growing in 2018 (15 percent) with more marginal growth predicted for 2019 (two percent).

In addition to Amazon, Microsoft and Google also recruit consistently within MBA programs, but with lower overall hiring. It is worthy of note that, among the Top 10 programs (US News and World Report), the largest percentage of 2017 graduates who accepted positions in the technology industry came from Berkeley Haas. 

Consulting: Consulting firms recruit a large percentage of MBA graduates (approximately a quarter to a third of each class at Top 10 MBA Programs) and this is expected to continue. The QS Top MBA Salary Trends Report projects that recruiting in the U.S. and Canada by consulting firms will increase by 15 percent in 2018 with a slight dip to 7 percent in 2019.

McKinsey, the second largest employer of MBAs, is the top employer of MBA graduates at Northwestern Kellogg, Chicago Booth, and Columbia Business School. Following McKinsey in MBA recruiting are Bain and Company, The Boston Consulting Group, and Deloitte.

At Stanford, the percentage of graduates securing roles in consulting is lower but trending upwards.

Finance: Developments in technology, political uncertainty, and greater competition from technology and other firms, has negatively impacted MBA recruiting by financial services firms. Wharton, as well as Chicago Booth, and Columbia Business School have experienced recent employment dips in the sector. According to a 2017 MBA Employment Survey by Training the Street, students reported lower interest in working for Wall Street and expressed wanting to explore options with companies, such as boutique banks, that may offer a higher quality of life.[ii]

The Salary Trends Report projects another year of modest growth for the industry in 2018 (4 percent) with a slight decline predicted for 2019 (-1 percent). 

[i] https://poetsandquants.com/2017/10/04/amazon-now-hiring-1000-mbas-a-year/

[ii] https://www.bloomberg.com/news/articles/2017-08-09/record-percentage-of-mbas-don-t-want-to-work-on-wall-street