What happens to your salary when you leave consulting for a start-up?

What happens to your salary when you leave consulting for a start-up?

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Summary

If you stay in consulting for most of your career, your pay will gradually increase to over £150k at director level (and over £250k at the same level in McKinsey, Bain or BCG).

But not everyone wants to stay in consulting – and not all analysts can become directors. So what happens to your salary when you leave consulting?

The average consulting salary

The average senior analyst-level salary in a large consultancy is £52k. If you are a consultant with McKinsey, Bain or BCG, that number is even higher – closer to £60k. If you stay in consulting for most of your career, your pay will gradually increase to over £150k at director level (and over £250k at the same level in McKinsey, Bain or BCG).

But not everyone wants to stay in consulting – and not all analysts can become directors. So what happens to your salary when you leave consulting?

Our comprehensive salary report answers this questions for the most popular industries (including corporates, boutique consultancies, large consultancies, private equity and start-up) with movemeon’s consultants and ex-consultants. To download the full report, just complete the form at the end of this article.

Alternatively, click here for some early insights based on the report.

In this article, we are going to look at the way your salary changes when you leave a large consultancy for the most popular industry: start-up.

Pay difference: large consultancy v. start-up

As a consultant, it can be difficult to break into the start-up scene – the strategy opportunities many consultants look for when they leave consulting don’t tend to be available. Start-ups might also look less attractive: at senior analyst level, the average start-up salary is £31k, compared to £52k at the same level in a large consultancy. And yet, start-ups are a wildly popular exit choice. Just in the last month, 908 start-up applications were submitted on movemeon. We’ve written about a few of the reasons why consultants join start-ups, including the importance of the experience and the learning opportunity, here.  

An additional reason is that start-up compensation increases with seniority far more drastically than pay in a large consultancy: the average start-up director’s total compensation is £261k. In a large consultancy, the average director makes £60k less per year. The difference is mostly due to the non-cash component of start-up compensation, which far outweighs the cash component. For our detailed analysis of start-up compensation, click here.

Looking at pay per hour, the real difference in large consultancy v. start-up pay is smaller than absolute pay levels suggest. At analyst level, the difference is -23% (i.e., start-up salaries are 23% lower than those in a large consultancy). At associate level, that difference is -25%, at manager level -11%, and at director level +45%. In other words, even in terms of pay per hour, directors earn more in start-ups than in large consultancies. And at the lower levels, there is a pay difference, but not a drastic one. The popularity of start-up roles on movemeon, and with consultants in general, clearly shows that the drop in compensation when leaving a consultancy for a start-up is considered, at worst, a necessary evil – and more likely, a necessary lifestyle adjustment.

Interested in startups? Have a look at some of our start-up related articles: 

Working in a rapidly growing start-up: an interview with Heist studios

6 tips on how to break into the start-up scene – by Pockit COO 

Start-up hiring: a summary from movemeon’s salary report

Some of the great employers movemeon worked with last month:
Rentalcars.com, Amazon, Coca Cola, Jaguar Land Rover & more

 

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