In this article, we take a look at how the top consulting firms (McKinsey, BCG and Bain) compare to the “Big 4” (EY, PwC, Deloitte and KPMG).
If you’re applying to one of these firms then understanding how they differ is important when putting together a successful application.
The Top 3 firms are much smaller than the Big 4
It’s worth noting that the Top 3 consulting firms are around a tenth of the size of the Big 4. McKinsey has 27,000 employees, BCG 20,000, and Bain 8,000 (2018). In stark contrast, Deloitte, PwC, KPMG and EY each employ between 200,000 and 300,000 employees.
Although the vast majority of the Big 4’s staff belongs to divisions other than consulting (e.g., audit, tax & law, transaction services), their consulting practices are several times bigger than any of the Top 3 consulting firms.
So what does this mean for you as an aspiring consultant?
The Big 4 need to recruit a much larger number of people per year to sustain their size, whereas the Top 3 need a much smaller number of new recruits.
This means that purely based on the numbers game the Top 3 are far more selective than the Big 4.
The Top 3 focus on strategy while the Big 4 do implementation
Most of the work McKinsey, BCG, and Bain consultants do for their clients is focused on big strategic questions across general strategy, organization, marketing, operations, digital, and M&A issues. These are C-suite level problems.
The Top 3 firms do not offer audit, assurance, tax, and other similar accounting services to clients, which is the majority of the type of work done by the Big 4.
Most of the Big 4’s consulting work is concentrated in their ‘Advisory’ practice. They focus on the implementation of transformations, responding more to a “help me do it” question type than to a “what should I do” question type. For example, a project may involve implementing a new process or technology across multiple areas of the client business or a reorganization of business units. Accordingly, Big 4 consultants tend to work with the client’s middle-management, rather than with its C-suite.
The Big 4 do have strategy consulting practices, such as Strategy& at PwC, Parthenon at EY, and Monitor at Deloitte, but this is a very small percentage of their total revenue. And these divisions are significantly smaller than any of the Top 3 management consulting firms. They have often been built by acquiring boutique firms rather than by growing organically. Consultants within this area of the business do similar work to the Top 3’s.
The most notable work that the Big 4 do probably resides in their Transaction Services or Deals practices. They blend these firms’ accounting and consulting expertise to provide specialized advice to the C-Suite on M&A opportunities. This is where the Big 4 charge their highest fees.
Top 3 consultants stay generalist while Big 4 consultants specialize
Big 4 consultants who work in their advisory practice often spend 6-12+ months working for the same client and therefore become embedded into the client’s organization, similar to the client’s employees. They tend to become specialized in certain industries early on in their career.
On the other hand, Top 3 consultants often spend 2-4 months or less working for one client and rarely specialize in one industry until much later in their career. Their work is more varied, while Big 4 consultants will often do more repetitive work due to their specialization.
So, how do these differences impact your career?
Consultants at Top 3 firms experience accelerated learning because they receive mentorship from some of the best minds. The work there is more challenging and diverse than in many other jobs.
By joining a Top 3 firm you are signaling to future employers that you belong to a small, elite group of the top available talent. This gives you better exit opportunities, such as moving into private equity or senior management at top companies.
The pay is higher as well. Top 3 firms charge clients 3-4 times more per day than Big 4 firms due to the nature of the work, and this gets reflected in the average compensation for consultants. A partner at a Top 3 firm will often make three times more than a partner at a Big 4 firm.
You can also expect a faster career progression by working at a Top 3 firm. The speed at which a new consultant can make Partner is typically faster at the Top 3 firms (~9 years) than the Big 4 (~15+ years).
Overall, there are more differences between the Top 3 and Big 4 consulting firms than initially meets the eye, and it’s well worth understanding the nuances in order to successfully apply to the firm that suits you most.
Feeling inspired to apply to a top tier consulting firm?
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