Salary Disconnect - MBAs, Management Consultants, and Design

Design Discussions design employment
1

It seems many non-entry level design research, design strategy, design innovation, and brand related positions that are advertised by the major research, brand, and design firms in NYC, Boston, SF include preferences or requirements for:

• MBAs, with
• Management Consulting experience with top firms, and
• X years of management/leadership experience (4, 6, 8 whatever).

Yet, when it comes to salary range, it seems that these advertised positions are typically paying $90,000, $110,000, or maybe up to $130,000. If a candidate looks for more than that, or expects relocation and/or sign-on bonus in addition, the discussion is over. Nice to meet you. B-bye.

The disconnect for me is this: fresh MBA grads (avg. 4 yrs. previous pro experience) from top 20 schools (i.e. one that an HR person at a design firm would be familiar with and interested in) are STARTING around $120,000-160,000 (total compensation). Then, they need to get or add a few years of management consulting experience to be able to claim management roles. Given the high bonuses possible and the significant raises when one is promoted in consulting at a McKinsey, this preferred or required candidate would then be at least in the $200,000s, possibly MUCH higher. Assuming they were promoted, this would be a sign that they have a shot at the next level and the potential for 7 figures in their future. And don’t forget the network such a person would be developing as they moved up in management consulting - how much is it worth to have friends in increasingly high places and lucrative positions?

So is anyone who really satisfies these preferences or requirements going to be interested in approx. $100,000, smaller bonuses, likely no relocation support, and DRAMATICALLY reduced earnings potential FOREVER? I understand management consulting requires brutal hours and there are lifestyle refugees, but do they really look to the sometimes similarly brutal field of design consulting at half their previous salary (or worse) and limited future upside as a good option? Wouldn’t design HR figure out that any candidate willing to take this drastic cut was a management consultant failure story - a dropout? Are brand and design offices so weak and clueless and starstruck that they are happy to employ the dregs and runaways of management consulting?

2

Or is this just another silly, mutually exclusive HR joke?

• “We want the best and we want it for nothing.”
• “Aggressive, confident, independent leader AND collaborative, humble, team player.”
• “A senior, leadership role in our totally flat organization.”
• “Must be youthful, energetic, fun, idealistic AND have over 30 years corporate accounting experience.”

Does design eventually end up settling for candidates who don’t actually meet the criteria? Do they turn to online, 6 month MBA program grads who’s uncle once set them up with an unpaid 3 month internship in the McKinsey mailroom? Do they continually extend the search for the impossible? Do they eventually raise the compensation offer? How many qualified and SUCCESSFUL experienced, former MBA management consultants is design actually getting?

Help me understand this seeming disconnect!

3

Where are you getting your salary numbers from?

To me, a “fresh MBA grad” even from a top school would not be starting anywhere near 100K. And if they are fresh grad, how do they have 4 years pro experience.

I can imagine a consultant with 4 years expereience maybe close to that level, but as always consultants (at least if freelance) are normally at a higher salary rate than corporate because of no support for benefits, lower taxes, higher risk, etc.

I think that a 100-130K salary at a research, brand, design firm as your state for a design researcher, branding position seems about right given 4 years of experience and the qualifications you mention. maybe even a little high if only 4 years experience, but around the right level for 6 or 8.

as for 7 figure salarys, I dunno where you work or who you know, but pretty much in any field those are the few top execs that can command that kind of cash, usually with more than 20 years experience with top companies and proven results.

if im wrong, just point me to where i can ask for 7 digits, and ill be all to happy to use you as a reference :slight_smile:

in c omparison of managament vs. design there may be a gap. but i expect not as large as you would indicate. some of it i assume comes from the MBA and extra years education required for the masters, and some i think is just the old world view of deisgn as more of a service compared to management. i do think that is changing however and would not be surprised to hear top design execs and management salaries are now inline with business and finance roles of comporable level. if anything design could be higher as there are generally less designers coming out of school and getting the experience to get to a high level compared with the large number of B schools and students in the marketplace.


R

4

• A few sources for total compensation numbers:

http://rankings.ft.com/rankings/mba/rankings.html?queryParam=&selectorField1=&selectorOption1=&selectorField2=&selectorOption2=&selectorField3=&selectorOption3=&x=38&y=10&lastSort=&sortBy=Rank+2007
(click on “Salaries” tab)

http://www.businessschool.cc/salaries.html

Keep in mind the qualifiers I stated in my post: I am referencing “top 20” schools, and “total compensation” or total pay package. Also, since I am discussing places like New York, Boston, San Francisco, my comments are referencing the situation in the U.S.A.

• They are “fresh MBA grads” with 4 years of pro experience because the average incoming MBA student worked for about 4 years between undergrad and beginning the masters program. No different than many MFAs, I believe?

• Perhaps we have a misunderstanding of the term “management consultant.” I use the term not to define a “freelancer” but to refer to a general discipline or career often known as management consulting or business consulting. Prominent, large firms in this field are McKinsey, Bain, Booz Allen, BCG, etc. These are companies with thousands of full-time employees worldwide. They receive benefits.

• 7 figure salaries. Yes, this is only for the best performers at the best firms. However, because of the generous bonus structures, partnership opportunities, and the business network that is part and parcel of management consulting, this kind of compensation is a possible future that people in this industry can shoot for. Here’s some information (dating from 1996!):

McKinsey (MBA, Junior Partner): $250,000
McKinsey (MBA, Junior Director): $800,000
McKinsey (MBA, Senior Director): $2 - 4 million

source:
http://www.cob.ohio-state.edu/fin/opler/salary.htm

• So if the above information is roughly accurate and sheds some light, the issue remains: If you really have the kind of background the design/brand offices are asking for, you are not going to be pulled away from McKinsey etc. for approx. $100,000. Maybe not even $200,000. (Unless, you are not from a top 20 MBA program, and you are not from a major consultancy, and you do not really have management experience, and you are not successful in your consulting role. In which case, why would a top design/brand office want you at all?)

5

7 figure salaries. Yes, this is only for the best performers at the best firms. However, because of the generous bonus structures, partnership opportunities, and the business network that is part and parcel of management consulting, this kind of compensation is a possible future that people in this industry can shoot for. Here’s some information (dating from 1996!):

McKinsey (MBA, Junior Partner): $250,000
McKinsey (MBA, Junior Director): $800,000
McKinsey (MBA, Senior Director): $2 - 4 million

Are you kidding me??? :unamused: Get real…

That was right in the middle of the Dot.com boom. That was unrealistic and unsustainable at the time and is certainly not the norm today, especially after SOX (Sorbanes Oxley) and 9/11.

Only Fortune 500 Presidents/CFOs/CEOs get that kind of compensation today.

6

Ya, I think your way outta reality with those salary numbers.

Maybe in some exclusive firm, for top wunderkids or execs, but you cant compare that to a “real” job like the 100K design research/strategy/etc. you mentioned in your original post.

The 100K for 4 years exp as I said before is high for this type of job. If you are expecting 200K + to 7 figures, itll be a long walk to the unemployment line…

R

7

• The McKinsey numbers were from the source noted - Ohio State’s business program. So, these are not MY salary numbers. You’d have to ask Ohio State if they are in the practice of publishing just “kidding” or “outta reality” numbers.

The numbers were shared just to show the type of compensation that an MBA can receive AFTER a promotion or some leaderhship experience - the kind of leadership or management experience expected or preferred by design/brand HR. So, if a fresh MBA from a top-20 school earns $120,000-160,000 (according to the source noted), then they are moving towards the $250,000 of a Junior Partner (according to the source noted) as they gain leadership experience.

The numbers towards the 7 figures were only ever mentioned in my post as pointing to the eventual POTENTIAL a SUCCESSFUL management consultant could SHOOT FOR - I was not making a direct comparison at this high end. The point being only to show the POSSIBLE upside of a long term career choice for management consulting, since a job seeker may consider both immediate financial benefits as well as the long term possibilities when choosing a position. In immediate compensation, management compensation and eventual potential, it appears that MBAs and management consulting is far above design/brand strategy positions.

Is the issue here that you just don’t like this reality, or can you rationally refute this general point as laid out in my posts? Do you have any data you could share to show the data/sources as being incorrect?

• The Ohio State/McKinsey numbers referenced 1994-1996 - this was certainly not “right in the middle of the Dot.com boom!” (Unless you are Al Gore) Many business professionals had not even heard of the web in the mid-90s, much less were throwing millions at McKinsey (who were not experts in this area) for help in this nascent area.

Just for perspective, the first MOCK-UP of www.IBM.com was proposed INTERNALLY in 1994. The general response was “How do you make money with this?” Didn’t Gates FIRST start figuring out what to do about the web around '95? So, even some of today’s biggest players didn’t have a clue or serious budget and revenue until later in the 90’s. No doubt the mid-'90s were an exciting time for college programmers and entrepreneurial pioneers, but the serious money, organized employment with benefits and big management consulting gigs didn’t arrive until later.

Do you have some sources you could share to show that 1994-1996 truly was the middle of the Dot.com boom in terms of employee compensation, and that McKinsey’s compensation numbers were skewed during these years because of it? How about some data or recent articles showing how today’s management consulting compensation is still significantly lower than it was in 1994-96 because of SOX or 9/11? Please post your sources so that I can learn and we can have a substantive discussion.

• I understand what the design research/strategy positions are paying, as noted in my original post. Thank you for verifying that they are in the 100K range. However, the question was not “what are these positions paying” or “what do you personally feel is a fair salary for this position.”

Please re-read the posts, check the sources/links or ask specific questions if you don’t yet understand my central point about a salary disconnect between the types of backgrounds that design/brand HR is asking for and the range of compensation people with these backgrounds can expect to earn in management consulting versus design/brand strategy.

From the information/data/sources presented so far, it is apparent that a significant disconnect DOES exist. I’m just trying to understand how this disconnect works itself out in the job search marketplace.

And are there any strategists, design/brand HR people, etc. out there who can share their perspective or experience?

8

So is anyone who really satisfies these preferences or requirements going to be interested in approx. $100,000, smaller bonuses, likely no relocation support, and DRAMATICALLY reduced earnings potential FOREVER?

No.

I understand management consulting requires brutal hours and there are lifestyle refugees, but do they really look to the sometimes similarly brutal field of design consulting at half their previous salary (or worse) and limited future upside as a good option?

Doubtful.

Wouldn’t design HR figure out that any candidate willing to take this drastic cut was a management consultant failure story - a dropout?

Likely.

Are brand and design offices so weak and clueless and starstruck that they are happy to employ the dregs and runaways of management consulting?

Probably not the good ones.

9

I smell a troll… :unamused: