A top-tier MBA has become almost essential for reaching senior and mid-management positions at major consulting firms. Leading strategy consultancies have significantly increased their recruitment of MBA graduates. For example, McKinsey hired over 500 MBAs in 2005, with plans to increase this number in 2006. Booz Allen Hamilton, BCG, Bain, and IBM Consulting each hired over 100 MBAs in 2005 and also anticipated further increases in 2006. In contrast, larger banks hired considerably fewer MBAs, and the technology and industry sectors hired even fewer.
The surge in demand for MBAs in consulting is clear. The 2005 TopMBA.com Recruitment and Salary Survey indicated a remarkable 35% increase in demand within just one year (June 2004-2005), a trend that is projected to continue. The economic dip earlier in the decade led many consultants to pursue MBAs. Now, with the consulting market’s resurgence, firms are actively seeking these MBA graduates with prior consulting experience to meet their growing needs.
Interestingly, more MBA graduates are now being hired from non-consulting backgrounds. Cambridge University’s Judge Business School reported that in 2005, only 13% of those entering consulting post-MBA had previous experience in the field. Similarly, at INSEAD Business School in France, the proportion of graduates hired into consulting from diverse backgrounds, such as industry, rose from 36% to 47% in a single year (2003-2004). This shift is due to consultancies recognizing the value of diverse experience that candidates from non-consulting backgrounds bring, especially as the average age and work history of MBA students increase. There’s a rising need for consultants with specialized skills and knowledge, often acquired outside the consulting profession.
The UK market is particularly attractive to MBA graduates. Its robust economy and policies aimed at attracting highly skilled migrants make it the most popular destination for European MBA graduates. In 2005, the UK attracted 23% of INSEAD students. Of those remaining within Western Europe, the UK attracted a substantial 37%, significantly higher than France (18%) and Germany (8%).
Consulting remains a lucrative path for MBA graduates. The London Business School’s 2005 annual report showed that consulting jobs out-earned those in finance and industry, averaging £65,000 per year before bonuses, compared to £58,000 in finance and £55,000 in industry. Employees also received an average annual bonus of £25,000 and a sign-on bonus of around £10,500. Companies are also offering perks, like company cars and all-expenses-paid outings, to attract top talent.
However, salary isn’t the primary driver for MBA graduates choosing consulting. The majority cite career and lifestyle options as their main motivation. They seek stimulating and varied roles with opportunities for diverse career progression.