You have been through the interview process and have gotten multiple offers from management consulting firms. Congratulations! This is a great place to be and you can use this situation to your advantage to negotiate and make an informed decision about where you want to start your management consulting career.
Below are some great tips on how to evaluate and negotiate offers:
- Build a personal list of priorities: If you were lucky enough to get multiple offers, make sure you rank them based on your priorities. You should consider all of the factors below in your decision making. Then, rank order the offers you have and write down the reasons why you ranked the offers in that order. Make it clear in your mind what matters to you:
- Prestige of the firm
- Exit options
- Work-life balance on the job
- The firm’s particular strength in a industry (e.g. Financial Services, Retail,…)
- Location of the home office you will be part of
- The culture of the firm and attitudes of the people you have met
- Understand the total comp: The management consulting firms work hard to attract the best candidates for their firms. They in the business of selling expertise and want to have the employees with the best pedigrees. To attract these candidates, they offer highly competitive compensation packages. There are many components of an offer: Base salary, annual bonus, stock, vacation, 401K and other benefits. Make sure you evaluate all components of the total compensation.
- Base and bonus: Some firms have smaller base but bigger bonuses. Also try to understand what the bonuses are based on: Firm’s global or regional performance, your performance. What is the target % vs. actual pay outs in the last couple of years? When are the bonuses paid? These are all fair questions to ask
- Signing bonus: Many firms offer a one time signing bonus as part of their offer.
- MBA tuition reimbursement: This benefit is disappearing but you may still see some firms offering to pay part of (typically second year) of your MBA tuition as part of your offer. Mostly, this is part of an offer for an MBA intern who is extended an offer at the end of their summer internship. Some firms also offer MBA sponsorship for undergraduate hires, which the stipulation that they are expected to
- Stock: For many management consulting firms that are privately owned the stock, i.e. ownership in the firm is reserved for partners only. Smaller private firms may give you an ownership stake at lower levels. The publicly traded management consulting firms generally have some stock grant or discounted purchase program that you can be a part of as a entry level employee
- Vacation: Consulting is a high-pace, high-burn job, make sure you have sufficient vacation as part of your package. Also, many consulting firms offer flex-time policies like part-time programs, sabbaticals, secondments, internal rotations. These are great ways to rejuvenate between client engagements or try something new for a while without leaving the firm
- Retirement: Retirement benefits typically come in the form of 401K plans, some consulting firms offer firm contributions, matching contributions. There are still a few firms that offer pensions but typically, it is reserved for employees who stay with the firm more than 5 years
- Other benefits: Healthcare plan options, maternity/paternity leaves, etc. are typically included as part of a consulting firm’s compensation plan
- Ask what is negotiable: This seems very straightforward but you would be surprised how many candidates do not ask. If you ask what is negotiable and what is not, it will save you time and understand the levers you can negotiate.
- Do your benchmarking:
- Go to forums to get intelligence: There are several forums you can check out, Wall St. Oasis consulting forum is a good place to start
- Compare with Glassdoor: Company reviews and salary reports. The salary reports are organized by title and location and for larger companies, you will see many reviews and salary reports with fairly reliable info
- Network with recent grads in consulting: Finding and asking people who recently got job offers and how/what they were offered and what they were able to negotiate is a great way to test your own negotiation strategy
- Leverage other offers: Firms are much more willing to negotiate when you disclose that you have multiple offers. You can ask them to match particular aspects of a competing offer. Make sure that you do this in the order of priority you agreed on with your offers, that way you will not waste your and their time
- Align timing on decision making: Timing is critical, the offers will have incentives for early acceptance (e.g. MBA tuition reimbursement, signing bonus) and the firms want to lock down candidates as soon as possible so that they can do their capacity planning. You on the other hand want to have all the offers in hand and make an informed decision with plenty of time to think the options through. In reality, you will likely have a compromise, if you explain your situation and want to take a little time to negotiate and think through offers, you can ask for extensions on deadlines, but do not go overboard 1-2 weeks is likely ok, 1-2 months is not
That’s it folks, you are in a great spot and if you follow these tips you should negotiate the best offer possible and make an informed decision. Enjoy!