MBA holders versus direct promotes in the post-consulting talent market

The market for strategy talent is competitive, and consulting firms have had to be creative to retain their top-performers throughout the years.

One important way firms have done this is by promoting top-performing pre-MBA consultants into post-MBA roles without having these consultants actually obtain their degree (e.g., effectively skipping past a two-year MBA degree).

Our clients often ask us about the difference between hiring traditional MBA holders versus these “direct promotes” in the post-consulting talent market. To answer this question, we must first understand the consulting promotion structure.

Who gets promoted, and why?

Consulting firms have varying titles and promotion structures, but the “Big Three” (i.e., Bain & Company, Boston Consulting Group and McKinsey & Company) tend to follow this general timeline for their consultants: business analyst > associate > manager > principal > partner.

The promotion from business analyst to manager would typically require a consultant to start directly out of undergrad, spend 2-3 years as a business analyst, leave the firm to complete their MBA and come back to consulting at the post-MBA level (associate). Then, usually after two years and a strong track record of performance, these consultants are eligible for the manager promotion (i.e., “MBA holder”), giving them at least seven years of total post-undergrad experience, potentially more if they had another experience pre-MBA outside of consulting.

But for top performers at the pre-MBA level, there is an opportunity to move directly to the post-MBA level without completing their MBA (i.e., “direct promote”). Every consulting firm does this on a different timeframe, but it’s typically 2-3 years post-undergrad. Specifically, McKinsey & Company started offering a “direct to engagement manager” promotion a few years back. This promotion gives top-performing business analysts the option to become engagement managers after only two years post-undergrad, a move typically reserved for two-year post-MBA talent.

Key differences:

An important reminder for any organization debating whether to hire a strategy consultant with an MBA versus a consultant who received a direct promotion is that every candidate has unique strengths and development areas, and every organization has different hiring needs. However, there are several distinctions we see in these two categories of consultants once they hit the post-consulting talent market:

MBA holders:

These individuals possess the traditional consulting toolkit and the tenure that many corporate strategy teams require. For more established corporate strategy teams, the leaders must consider internal parity. While some of our clients require an MBA, a lot don’t. Even still, the extra years of experience matter to ensure that companies don’t have multiple people performing the same role with vastly different levels of true work experience.

Also, given the high level of exposure that corporate strategy teams tend to have, the extra experience often brings a stronger maturity level and stakeholder management toolkit that corporations value highly and that pre-MBA direct promotes may lack.

Direct promotes:

Consultants who went straight from business analyst to manager without an MBA enter the post-consulting talent market with fewer years of experience than MBA holders, but they often have similar compensation expectations because they performed in a similar role. This creates a dilemma for clients who may appreciate the effort and dedication it took to receive a direct promotion but can’t justify paying a salary usually reserved for candidates with more experience.

However, direct promotes are often a favorite for organizations that are looking for candidates with the universal top-tier strategic toolkit at a more junior level. Additionally, for net new or smaller strategy functions, we tend to see more flexibility around the required years of experience given there is less concern around internal parity.

The takeaway:

Every role requires a unique skillset, both culturally and technically, and the dedication it takes to either complete an MBA or receive a direct promotion is valued differently across companies and industries.

If you’re adding to your strategy team and are looking for someone directly out of consulting, here are a few questions to ask before aligning on the target profile:

1. How important are the years of experience? Would someone with 3-4 years of total work experience meet the cultural and technical bar for your company/role? Plan for how a candidates’ years of experience, specifically within consulting, will factor into their target compensation.
2. How important is “real-world” industry experience? Often, direct promotes will only have professional services experience from a top firm, given a lot of pre-MBA consultants join consulting directly out of undergrad, whereas other candidates at the post-MBA level could have corporate experience prior to earning their MBA.
3. How critical is it to be an industry expert? Depending on the level they’ve risen to, direct promotes may still be considered generalists and not yet align with an industry vertical. If you need an industry expert, you may want to look for someone with that experience pre-MBA or consider someone who is aligned to a particular practice area, and this type of talent is most typically seen at more senior levels within consulting.
4. How important is leadership experience? Direct promotes with 3-4 years of total experience typically have less reps leading teams and work streams independently compared to their counterparts with over seven years of total experience. How critical is it for this person to be a seasoned leader on day one?

If you’re interested in learning more about industry compensation or our recruiting capabilities in corporate strategy, please reach out to Julia Opaleski at (336) 217-9132 or julia.opaleski@charlesaris.com.