Management consulting vs tech: a comprehensive comparison

Roles, responsibilities and skills

Skills and responsibilities in management consulting

The role of a management consultant is clearly defined: helping clients in large organizations solve their most critical and complex problems. This involves undertaking a wide range of analytical and strategic activities, including:

• structuring the problem
• collecting insights
• analyzing data
• communicating findings
• bringing the client along with ways of thinking
• formulating a recommendation

To succeed, consultants are required to develop a set of clearly defined consulting skills, which include:

• problem solving
• analytical and numerical skills
• communication
• client relationship management
• working autonomously

As consultants become more senior, the firms place more emphasis on the additional skills of leading a team, developing clients from a commercial standpoint, and developing their expertise in either a section or function.

Skills and responsibilities in tech

By their very nature, tech companies have a wide variety of roles and functions, including engineering, marketing and finance. The areas that tend to appeal most to candidates who might also consider a career in management consulting tend to be:

• Business operations: a Business Operations Manager is responsible for driving business growth by aligning strategy and operations across all areas of the company. This is the role in tech that is closest to that of a management consultant.
• Product management: a Product Manager (PM) is responsible for developing and managing the company’s products or services, ensuring that they meet the strategic goals of the company and the needs of its users. This role combines many disciplines: design, technology, business and behavioral science. For instance, a PM might be in charge of designing the new version of Google’s search page.
• Analytics: Data Analysts collect, organize and interpret data to answer questions and provide the company with insight. For instance, a Data Analyst might analyze the user behavior patterns of an e-commerce website to recommend ways of improving conversions.

Recruitment and hiring

Recruitment in management consulting

Top consulting firms like McKinsey, BCG and Bain (MBB) are highly selective when it comes to hiring new consultants. With some of the world’s most talented candidates applying to MBB every year, the firms focus on choosing the ‘cream of the crop’ through a tightly structured and highly codified recruitment process.

MBB recruiters review applications and decide who to progress based on an evaluation of candidates’ resumes and cover letters. In some cases, candidates might also be required to complete an online test, such as McKinsey’s digital assessment.

Candidates who pass these initial screening stages are then invited to take part in consulting interviews with the firm. These consist of a case interview followed by a fit interview or, in McKinsey’s case, a Personal Experience Interview (PEI). The firms all use objective assessment criteria to evaluate each candidate’s interview performance and to determine who should receive an offer.

Recruitment in tech

Because tech companies all operate in different areas of the market and have a vast range of roles and functions to hire into, the recruitment process is neither as unified or codified as it is in management consulting.

However, the technical interviews for each type of role follow a similar format at most major tech companies. An interview for a Product Manager role at Meta, for example, might be similar to an interview for a similar position at Alphabet. This is because the companies are hiring the same kind of people for the same kind of job.

In tech, candidates also tend to be assessed against a firm’s set of values or other behavioral criteria. Amazon, for example, uses its seven leadership principles to do this. For some roles in certain tech companies, recruiters will be looking for candidates who can live and breathe the culture of the company. It’s therefore vital for candidates to familiarize themselves with the values and other core principles of the firm they wish to join.

In management consulting, the recruitment process is both predictable and consistent among the top-3 firms. Preparing for a consulting interview is therefore relatively straightforward, as long as candidates invest the required time and effort in doing so. In tech, however, interview preparation can be more challenging for candidates because the recruitment process can vary wildly among firms and roles.

Compensation and financial security

Compensation in management consulting

Top management consulting firms are among the best-paying employers in the market. At McKinsey, BCG and Bain, new graduates can expect to earn a total of $120-125K a year, while MBA graduates can expect to earn a total of $220-225K.

At every level of the consulting career path, compensation increases steadily in line with a consultant’s career progression. At Partner level, a starting compensation of close to $1,000,000 can be expected. This figure increases further to multiple millions of dollars for Senior Partners.

In addition to being generous, compensation for consultants is also predictable. For every firm and office, there is a unique base salary for each role from graduate level to Partner. McKinsey, BCG and Bain also use a formula – based on the performance of both the consultant and the firm – to calculate consultants’ end-of-year bonuses.

Compensation in tech

Generally speaking, the compensation available in the tech industry is as attractive as it is in consulting. The median starting salaries reported by graduates of the MBA classes of 2022 at MIT Sloan, Stanford and Harvard Business School who subsequently went into consulting were only around 10% higher than the median starting salaries of those who went into tech.

The source of this difference is likely to be the additional equity compensation, vested over time, that tech firms tend to offer new hires. This is not included in the business schools’ employment reports. With equity compensation taken into account, the total compensation in tech can sometimes exceed that available in management consulting.

However, this is largely dependent on the performance of the company’s stock over each period of employment. At the time of this article’s publication, Alphabet, Amazon, Microsoft and Meta are all among the world’s 10 companies with the highest market capitalization. Their stock price is therefore very unlikely to increase manyfold and may well even decline, reducing the expected value of equity compensation for employees.

Many candidates will favor the prospect of equity in a young startup, where the reward could be much higher in the event of the company going public or being acquired. However, careers in startups come with greater risk and, in many cases, less attractive compensation, than careers in both big tech and management consulting.

A greater degree of job security in consulting

Management consulting firms tend to be less affected by changes in the global economy than other types of company, which means that there is a high degree of job security for those who meet performance expectations.

In a downturn, firms can pay lower end-of-year bonuses, which is a large part of their cost base. They can also count on natural attrition as an outcome of their ‘up or out’ policy and the attractive exit opportunities offered to their consultants. They can also reduce their recruitment targets or delay new joiners’ start dates. Overall, consulting firms do not need to resort to rounds of layoffs to adjust to a more difficult environment.

Tech companies, on the other hand, can be more vulnerable to external forces than management consulting firms, which means that jobs in the tech industry are naturally less secure. In recent years, a number of high-profile tech companies, including Alphabet, Amazon and Meta, have had significant rounds of layoffs.

Work-life balance

Management consulting firms and top tech companies alike expect employees to work extremely hard. As a result, they tend to hire very driven individuals who do this naturally.

Consultants, in particular, work long hours under intense scrutiny and pressure. Consequently, the environment in consulting firms can be stressful. Despite being something of a perk and among the reasons why many people want to join a top consulting firm, the amount of travel that consultants are required to do can further compromise their work-life balance. And because management consultants move to a different project team every two or three months, it’s not easy for them to settle into a comfortable routine.

In tech, the hours can be just as long as they are in consulting, and the pressure can be equally as intense. However, big tech companies are known for providing comfortable working spaces, with areas for relaxation and social interaction, which can offer employees some respite. Additionally, there is usually far less travel involved for those who work in big tech companies, and individuals tend to stay in the same team for the duration of their time in a particular role. These differences all contribute to a somewhat better work-life balance.

Ultimately, hard work, long hours and stress are part and parcel of the employee experience at consulting firms and tech companies alike, but an adequate work-life balance is a more realistic prospect in tech.

Career advancement and growth

Career progression in consulting

Most consultants at McKinsey, BCG and Bain are on the firms’ generalist career track, which means they work on a variety of projects in a wide range of industries and functions. This track has three phases – consulting roles, project management roles and Partner roles – all of which evolve over the course of a consultant’s tenure.

To support their progression, consultants receive comprehensive formal training, along with mentorship and guidance from senior team colleagues, and frequent feedback from project managers and Partners.

The firms all have a highly codified performance review process in place, which offers the possibility of rapid career progression for top performers. At McKinsey, BCG or Bain, a high-performing new consultant can expect to progress to Partner level in eight to 11 years.

Career progression in tech

Tech firms employ a diverse range of talented individuals, some of whom want a career path that doesn’t require them to manage people as they become more senior. A a result, career progression in tech firms is often structured around two distinct ‘tracks’:

• The individual contributor track – for individuals who want to focus on deepening their domain expertise without managing team members
• The management track – for individuals who want to develop as leaders and managers

While some companies have different roles and levels of seniority within each career track, there is no single structure for career progression that’s applied widely across the industry, as there is in management consulting.

Career progression in tech is not underpinned by a consistent set of processes or policies. As a result, advancement for top performers is not necessarily guaranteed, and – in the absence of an ‘up or out’ policy – the fate of poor performers is far less predictable.

However, this more flexible approach to process also means that it’s possible for individuals in a tech firm to progress their careers in a wider range of circumstances. As a company’s product is taking off, for example, someone with a lot of potential can find themselves building a team and advancing to a senior position without having been required to reach any specific tenure beforehand.

A management consultant’s performance is assessed by multiple Partners across multiple projects, against a very well-defined set of skills. In tech firms, however, the outcome of the performance review process tends to rely almost entirely on the view of an individual’s line manager, making it less objective.

In summary, career progression in management consulting firms is structured, consistent and based on objective assessment criteria – with rapid career progression available for top performers. In big tech companies, the approach to career progression tends to be more flexible and less objective, which makes the outcome for employees harder to predict.

Exit opportunities

McKinsey, BCG and Bain are all prestigious and highly respected brands. This is among the reasons why a variety of attractive exit opportunities are available to former consultants. In fact, these opportunities are often so appealing that many people choose to leave consulting after two to four years in order to pursue them.

Major tech companies like Alphabet, Amazon, Apple and Meta are just as widely recognized as the world’s top-3 consulting firms, and equally prestigious. Those who leave a career in tech are likely to be in high demand by companies that are seeking to modernize and become more agile. A traditional bank, for example, might be particularly interested in a candidate who has worked for a digital disruptor in the banking industry.

Like former consultants, those who have worked in tech are often well placed to enter the world of entrepreneurship. Depending on when they joined their tech firm, they may have experience of working in a company as it undergoes rapid growth. Those from the tech world are also likely to have a strong grasp of the latest emerging technologies and how they can be leveraged to start a new company or launch a new product successfully.

However, what consultants have that tech professionals don’t is an abundance of highly transferable skills that can allow them to do any sort of job and transition into many different functions and industries. The options for those who leave a career in tech will naturally be slightly more specialized – and therefore more limited – than those available to former consultants.

In summary, a career in tech is a great route for those who are drawn to roles that support the development and delivery of cutting-edge products and services, and who want to achieve a reasonable work-life balance. Consulting, on the other hand, is an excellent way to gain exposure to a variety of strategic problems and industries, build a transferable skill set, and experience rapid and predictable career progression. Both options are attractive for those who want to receive generous compensation and be well positioned for a number of exciting career opportunities in the future.