At Columbia, Consulting Overtakes Finance As The No. 1 Career Choice - Poets&Quants

Columbia Business School graduation (Photo courtesy of CBS)

For the first time ever, more Columbia Business School MBAs accepted jobs in consulting than finance this year. Just over a third of the Class of 2018, exactly 33.6%, landed positions with consulting firms, while 32.2% took jobs in financial services.

For a school long known as a pipeline to Wall Street, Columbia has been reporting a steady decline in finance as an MBA career choice since the Great Recession. Only seven years ago, in 2011, 50.3% of Columbia MBAs headed into financial services. Just 22.3% took jobs in consulting. But this year, consulting became the number one job destination for CBS grads.

Seven of the top ten employers at Columbia this year were consulting firms, with McKinsey & Co. leading all hirers in employing 55 CBS grads. Bain (22), Boston Consulting Group (21), Deloitte Consulting (17), PwC Strategy& (12), A.T. Kearney (9), and KPMG (9) were all among the top ten. The only firms to break up the consulting party at the top was Amazon, which hired 18 Columbia MBAs this year, Goldman Sachs (16), and J.P. Morgan (9) (see the full list of major employers at CBS over the years).

TOTAL MEDIAN COMPENSATION UP 5.7% TO $155,248 — JUST $5K UNDER HARVARD BUSINESS SCHOOL

Despite the shift away from the highly lucrative financial sector, it was a banner year for pay at the school. MBAs reported median base salaries of $130,000, up $5K this year, median signing bonuses of $30,000, up from $25,500 a year earlier, and median other guaranteed comp of $28,500, up from $25,000. Signing bonuses were reported by 66.3% of the class, while other guaranteed was reported by 18.8% of the graduates.

All together, adjusted for the percentage of students reporting bonuses and extra comp, the total median compensation this year was a hefty $155,248—just $5K under Harvard Business School’s $160,268 total this year (see Harvard MBAs Now Landing Starting Pay Over $160K).

More schools are refraining from reporting other guaranteed compensation this year due to newly adopted reporting standards, though those guidelines do not prevent schools from revealing more compensation detail. Not surprisingly, schools where first-year guarantees reflect more favorably on their pay outcomes are more likely to report such information. That is especially true of schools that send significant numbers of students into finance where other guaranteed pay is a more prominent feature of a first-year starting package.

HIGHEST STARTING SALARY LANDED BY AN MBA IN PRIVATE EQUITY: $308,000

At Columbia, for example, more than half the MBAs going into finance report these extras. In investment banking and brokerage, 84.5% of the students report getting other guaranteed comp, with a median value of $50,000, a substanial boost to the median salary of $125,000. In fact, one MBA student expected other guaranteed comp of $215,624 in management consulting.

Even so, these are still conservative estimates of the full value of first-year compensation because they exclude tuition and relocation reimbursements, carry, and non-guaranteed performance bonuses. Nonetheless, even excluding the extras, the median salary and signing bonus at Columbia this year rose an impressive 5.7% to $149,890, up from $141,754 last year.

The highest reported MBA starting salary this year was $308,000 landed by a graduate in private equity, followed by a classmate who was given a starting salary of $233,500 in consulting and another MBA who got a $200,000 salary in tech at an internet services or e-commerce firm.

LITTLE COMPARATIVE LOVE OF TECH AT COLUMBIA BUSINESS SCHOOL

Columbia said that 94.1% of its Class of 2018 had at least one job offer within three months of graduation, up from 93.2% a year earlier. Some 90.1% of the students accepted those offers, also up from 89.3% last year.

Putting aside consulting’s rise, the bigger surprise in Columbia’s 2018 employment report is the comparatively fewer students going into the tech industry. Just 14.4% of the class accepted jobs with tech firms, less than a one percent increase over the 13.7% who went into tech last year. That’s on a par with Wharton’s 14.9% total this year. But at both Northwestern University’s Kellogg School of Management and Duke University’s Fuqua School of Business, a record 28% of this year’s class headed into tech. Tech companies also drew a record 20.3% of the Class of 2018 at Chicago Booth.

But tech generally doesn’t dangle the highest pay offers in front of students. CBS grads who joined hardware, software and telecom companies–roughly 5% of the class–earned median salaries of just $117,000, well below the $147,000 paid in consulting or the $140,000 paid in diversified financial services. MBAs who took jobs in e-commerce and internet services did better at $130,000, the class median, but still below most employed in finance and consulting, particularly when you add up all the extra compensation pulled down by MBAs in finance.

One of many photos posted to Instagram by celebrating Columbia Business School MBA students

JOB CONTENT NUMBER ONE REASON FOR ACCEPTING A JOB

Columbia does something unusual in its annual employment report. Beyond asking graduates the standard questions on pay and placement, it also seeks perspective on why MBAs accept a job offer and their satisfaction with the job they’ve taken. Some 93% of students this year rated their job satisfaction a four or five on a scale of one to five, with five reflecting the highest level of satisfaction.

The three top reasons why a Columbia MBA accepted a job offer? It’s not money, according to the survey. Number one was the actual content of the job (38.4%); second was the firm’s culture (28.5%), followed by the potential for professional and personal growth (21.3%). The previous Class of 2017 had a slightly different twist on the answers. That class put growth potential first (35%), job content second (31%), and firm culture third (22%). Less than 2% of the Class of 2017 cited salary as the primary reason for accepting a job offer.

In the financial services industry, the largest group of MBAs–12.3%–went into investment banking and brokerage jobs, followed by investment management (6.8%), private equity (4.9%), commercial banking and credit cards (2.7%), diversified financial services (1.8%), venture capital (1.6%), and hedge funds/mutual funds (1.6%).

THE SCHOOL FACILITATED 80% OF THE MBA JOB OPPORTUNITIES

Besides the shifts among consulting, finance and tech, 6.8% of the class went into a category that Columbia calls “manufacturing,” even though it includes consumer products and beverages. Another 4% went into real estate, with just 1.8% of the class choosing healthcare and retail, and a slim 1.6% headed into the combined non-profit, education and government sectors.

Columbia sid that 80% of the job opportunities for the class were sourced by the school. Some 44% came as a result of on-campus interviews, 16% by job postings, 8% by networking, 6% by corporate events, and 3% through alumni or faculty resume referrals. The remaining 20% of job offers were facilitated by students, with 9% attributing their offers to networking, 2% to job postings and 1% to their previous employers.

According to the school, out of its class of 727 MBA students, 85 returned to a sponsoring employer, 37 started their own businesses, and 15 went to a family business. The school’s compensation and employment data excludes these graduates.

Some of the largest employers of CBS grads

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