Top Consultancies Freeze Starting Salaries as AI Threatens 'Pyramid' Model (ft.com) 54
Major consulting firms including McKinsey, Boston Consulting Group and Bain have frozen starting salaries for the third consecutive year as AI reshapes how these companies think about their traditional reliance on large cohorts of junior analysts. Job offers for 2026 show undergraduate packages holding steady at $135,000-$140,000 and MBA packages at $270,000-$285,000, according to Management Consulted. The Big Four -- Deloitte, EY, KPMG, and PwC -- haven't raised starting pay since 2022.
The industry's classic "pyramid" structure, built on thousands of entry-level employees who crunch data and assemble PowerPoint decks, faces pressure as AI automates much of that work. Two senior executives at Big Four firms estimated that UK graduate recruitment would fall by about half in the coming year. PwC has already cut graduate hiring in 2025 and said in October it would miss a target to add 100,000 employees globally by 2026 -- a goal set five years ago before generative AI's rollout.
The industry's classic "pyramid" structure, built on thousands of entry-level employees who crunch data and assemble PowerPoint decks, faces pressure as AI automates much of that work. Two senior executives at Big Four firms estimated that UK graduate recruitment would fall by about half in the coming year. PwC has already cut graduate hiring in 2025 and said in October it would miss a target to add 100,000 employees globally by 2026 -- a goal set five years ago before generative AI's rollout.
Since when are pyramid schemes a good thing? (Score:2)
I always thought pyramid schemes were scam.
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The one who does the least is at the top, who also gets paid the most.
The trend continues as you get lower on the pyramid
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Don't believe everything you hear or see, and especially what you think.
Oh no (Score:1)
Won't someone think of the poor MBAs!
Wow (Score:5, Insightful)
This just opened my eyes to just how overeducated a numbskull these people have to be to be so easily replacable by AI.
And they earn THAT much pre graduation?
America sure is a weird and silly place.
Re: Wow (Score:2, Offtopic)
The summary says UK.
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This just opened my eyes to just how overeducated a numbskull these people have to be to be so easily replacable by AI.
And they earn THAT much pre graduation?
America sure is a weird and silly place.
A lot depends on what they do; many of the Big 4 undergrad hires go into Oracle, PeopleSoft, etc. jobs, coding, detailing as built, writing specs, etc.; some of which can be turned over to AI, especially as it gets better. Once you get to the MBB (McK, Bain, BCG) MBA hires it's a lot less that and a lot more problem analysis; some of which can also be done by AI. AI could certainly create a deck using McK's or other firms template, that eliminating a more junior staffer and letting a more senior one edit
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Wow, talk about outing yourself as a moron.
The article was about the UK, not America.
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In general, these salaries are significantly lower than in US. Very much dependent on a country though. Luxembourg is going to be close and sometimes even exceed US salaries, Bulgaria is going to be way lower, and everyone else is going to be somewhere in the middle.
Most people really don't understand just how badly EU stunted growth of its member states. Many of developed European nations were pretty close to US in terms of productivity (which in turn generates salary levels). But we were stagnant due to E
Win-Win-Win! (Score:4, Interesting)
FTFA:
"Some industry executives say that the more conservative hiring practices are in anticipation of productivity gains from AI, not because those gains are necessarily yet being realised."
"Clients are quite legitimately asking, what are you doing?" said Rob Hornby, co-chief executive of the consulting firm AlixPartners. "That's become a new credentialisation, to explain how you are applying AI to your firm."
So my take on this is that it's a win-win, pay fewer people less and then use that savings to attract new clients by showing that AI will cut costs. And the best part and final win? You don't need any actual AI!
Frozen starting salaries, but ... (Score:2)
Major consulting firms including McKinsey, Boston Consulting Group and Bain have frozen starting salaries for the third consecutive year ...
Have they frozen upper management (their) salaries? (Probably not)
Consultant business model (Score:2)
Re: Consultant business model (Score:2)
I think more typically, management consultants are brought in to rubber stamp the ideas of the person who brought them in. It's often corporate politics intended to push through that person's ideas over detractors. They fabricate endless charts and data to support the prescribed view.
Which also sounds like a good job for LLMs...
And there was much rejoicing! (Score:3)
"If you combine 'con' and 'insult', you get 'consult'."
https://www.ianchadwick.com/blog%20pics/2016/dilbert/dogbert_01.jpg [ianchadwick.com]
Frozen at starting salary of $135K? (Score:2)
Nobody in the real world makes that much money right out of college. Maybe the industry was due for a reset.
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Good eye, this is not The Real World. It's the made-up world of finance.
However, it makes sense to pay them well. You have to pay these people a lot or they will steal from you.
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Apparently, it doesn't make as much sense as it used to.
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Apparently, it doesn't make as much sense as it used to.
It does, but these people don't work on sense. The idea that we live in a meritocracy is a deluded one. They are not at the top of the financial ziggurat because of merit, but because of a lack of it — they will do anything to anyone any time for money.
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Pay has never been a meritocracy, at least, not directly. Like the cost of everything else, pay is a function of supply and demand. If you are a business owner, and you can get the person you're looking for for $X, you're not going to pay $X + $Y to get somebody. And if you're a person with a skill that is in demand, and you can get $X + $Y, you're probably not going to settle for $X. So pay is a negotiation between an employer and an employee, nothing more, nothing less. Merit has nothing to do with it, ot
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It ain't what you know, it's who you know.
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I know right, it's a conspiracy, nan! Everything is a conspiracy!
Only once in my 37-year career, have I gotten a job because i "knew" somebody. In that one case, I knew the CEO as a friend. Worst mistake I ever made, was working for him. The pay wasn't great, and at the end, we were no longer friends.
All the rest of the times, and I've had more than 10 jobs, I got them the old fashioned way: I turned in my resume, filled out applications, went through interviews. I turned down jobs that didn't pay enough, a
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My 41-year career has mostly been the opposite.
I haven't had a job interview since 1991 or so, nor have I asked/applied for employment since then. I just know the right people. They know what I can do and invite me to tackle whatever-it-is as an employee, consultant, or co-founder. Sometimes I'm interested, sometimes I'm not or I have too many o
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Yes, I'm aware of the proverb, and I'm aware that in some cases (like yours) it's true. But most people who quote the proverb, use it to complain about their own "outsider" status, wishing they "knew" somebody. What they don't realize is that people who "know" somebody came to know people because they worked at building relationships.
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The jobs that pay those salaries are typically in cities with a very high cost of living. $135k in London or New York isn’t a bad junior salary but people can do better on a lower salary somewhere else. And many of them do, which is why the pyramid is huge at the bottom.
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According to Salary.com, a "Junior Accountant" in NYC makes an average of $72K. https://www.salary.com/tools/s... [salary.com]
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Your college friend isn't typical. And accounting firms don't pay junior accounts "big bucks." Salary.com says that, in NYC, they make about $72K. https://www.salary.com/tools/s... [salary.com]
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Can you point me to your sources for salary numbers? Usually, salary.com is pretty accurate, but you are apparently saying they're not in this case.
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People working their hours in exceedingly challenging environment generally earn way more. These are basically the only people in the West who actually suffer from Karoshi - death by overwork.
The expectation is that you're working 6-7 days a week, flat out, all day. You get a few hours of sleep, and then you're back at the office. You eat at the office. You live at the office. You may or may not take showers at the office, but you almost certainly shit at the office, and probably with your laptop in your la
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People working their hours in exceedingly challenging environment generally earn way more.
No they don't.
Early in my career, I watched coworkers work 80 hour weeks in pursuit of that next raise, or promotion, or the IPO payoff. I decided that I didn't want those things enough to kill myself for them, so I worked normal office hours, devoting my evenings and weekends to my family instead. At work, I worked hard. At home, I pointedly did not work (for the company).
And guess what...I was promoted, and earned those pay raises, just as fast as my overworked coworkers. My boundaries didn't slow down my
Re: Frozen at starting salary of $135K? (Score:2)
How bad do you have to be at your job to need 100 hours a week to do it?
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You don't understand what these people do for a living, which is why you typed out this "but in a completely different field, this doesn't work".
True. In your field, it probably doesn't work. But for junior analyst, this is the only way to make it work. The job is to trawl through time sensitive raw data and pre-collated data sets, to generate collated topical data sets for senior analysts. Ingestion of data is constant, creating constant need for junior analysts to trawl through the next data set.
This is a
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Where are you finding your data? Yes, it is insane, and makes no sense. They used to call such workplaces "sweat shops."
Young, fresh graduates are not experts in their fields. They are green, and don't know what they are doing, even if they have a high IQ. *That's* why older people won't do these crazy jobs, they're too smart to submit to that BS.
And long hours does not equal high pay.
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Again, this is a very specific, unique field, and you're trying to generalize it over the rest.
This case is about City of London financial analysts. They're a very unique position in the world. About the only other place in the world that is comparable is New York's financial analysts, and those have even higher starting salaries because NYC is even more expensive than City, while actually having less intense work schedule.
In large part because NYC is not quite the global financial hub that City is in terms
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Again, this is a very specific, unique field, and you're trying to generalize it over the rest.
That's a load of BS. Every employer that wants to abuse their employees, talks about how special and unique they are, to puff them up and make them think they are doing a service to humanity by working themselves to the bone. No, I don't buy it. The knowledge and skills of these *JUNIOR* analysts is not *that* special.
And literally nobody considers the UK a "developing country."
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Google "UK is a developing country attached to London".
In fact, let me give you the crown jewel of UK's propaganda apparatus, the people with extreme interest in claiming that UK is great being "nobody considering UK a "developing country"".
https://www.bbc.com/news/busin... [bbc.com]
If you perform the search I listed above, you'll find countless others.
As you appear utterly ignorant of what UK is and how its systems work, I probably should also inform you that City of London is not the same thing as London.
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OK so right, there's obviously "somebody" out there saying just about anything, including that the world is flat. Just Google it, there's a ton of such people. I should have said, nobody *credibly* claims that the UK is a developing country.
And, your linked story doesn't claim such either.
And the 20-hour-day requirement is also still BS.
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I see you haven't bothered to type a single search criteria and then vet the sources, which tells me you don't care about investigating the topic, you just care about being right.
That's fine, but I don't think this discussion can go anywhere if your sole point is going to be "I don't know, therefore it can't be, and I don't want to know".
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You're right, I don't really care about whether the UK is called a developing nation or not. I just thought it was a silly thing to say.
Just like it was a silly thing to say that some financial analysis jobs require 20-hour workdays. No, that's a sign of poor planning and organization, not actual need.
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It will never cease to be interesting to me how some people get completely random emotional attachment to some random subjects, and go full on "I don't know, it doesn't exist and I don't want to know any different".
In this case, you're literally going "globally recognized best of the best of the industry are akshually just poorly planned and organized".
Even the most cursory observation of reality will point at the obvious opposite, but you don't want to know that. So you actively shield your eyes from reali
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And you're doing a great job of avoiding the real topic by fixating on an off-topic quibble about whether the UK is "developing." This has nothing to do with the topic at hand.
Re: Frozen at starting salary of $135K? (Score:2)
Quants do. But they are pretty rarified. Many have PhDs and work in roles where value is easily recognized because it has a direct and clear relationship to profit.
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According to Salary.com, a Quantitative Analyst in NYC averages $82K per year. https://www.salary.com/tools/s... [salary.com]
Re: Frozen at starting salary of $135K? (Score:2)
The info I found was specific to one of the mentioned firms. It listed starting salaries at like $100k-$140k.
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Can you please share a link?
Oh noes..... (Score:2)
You mean we won't have an army of these kids fresh out of school filling our inboxes with gigs of eye chart spreadsheets and powerpoints? How can we survive? Oh wait, we can get more or less the same tripe with feeding the same data to some fairly easy to recreate AI models?
Save yourself LOTS of time/cash and black hole the domains of these "big 4" firms at your border now.
Represents a Broader Change in Training Model (Score:2)
Positive development? (Score:2)
I can't think of any negative effect this could possibly have on society. Management consultants? Is there any more worthless parasite than a management consultant?
Fuck MBB, big 4, megacorps, and private equity (Score:2)