- McKinsey & Co. is one of the most elite management consultancies and has more than 30,000 employees worldwide.
- It has built a culture of hiring young college graduates from elite universities and business schools.
- Data indicates that MBA grads at McKinsey can make an estimated base salary of $165,000, and that doesn’t include a $30,000 signing bonus and $35,000 first-year performance bonus.
- Headhunters who have a proven track record of placing candidates at McKinsey, Bain, Boston Consulting Group, and other elite management consultancies, told Business Insider that the best to get a job at the firm was through an elite school.
- Here’s how that started.
- Visit Business Insider’s homepage for more stories.
You have about a 1% chance of landing a job at McKinsey & Company.
In 2018, the consulting firm hired 8,000 people out of 800,000 applications. The firm steadily brought in another 8,000 in 2019, in which more than 12% came from business schools.
The 94-year-old firm sets the bar high. Like other top-notch consultancies, such as Bain & Co. and Boston Consulting Group (BCG), McKinsey has a reputation for bulk hiring MBA students. These three companies alone are responsible for hiring nearly 30% of this year’s MBA class from INSEAD, a business school in France. A McKinsey spokeswoman recently shared that about 36% of the firm’s employees have an MBA, and 83% hold an advanced degree.
Skimming the best from the world’s elite universities has become a common practice at top firms — especially McKinsey. In fact, the pathway between Cambridge and McKinsey was so well trodden it’s been referred to as “McHarvard.”
To wit, a full 24% of Harvard Business School (HBS) 2020 graduates entered the consulting field, and 17% of students in class of 2021 are pursuing consulting internships.
The link between Harvard and its peers and McKinsey is one of the quizzical corridors of the American elite. It’s one of the lynchpin places where power is ratified and money is made.
Take former presidential candidate and cabinet secretary nominee Pete Buttigieg, for example.
President-elect Joe Biden nominated Buttigieg to lead the Department of Transportation, Business Insider previously reported. Before dropping out of the Democratic race on March 1, Buttigieg faced pressure to share more information about his three-year employment at McKinsey, which has since come under increasing scrutiny. The New York Times previously reported that Buttigieg’s experience at the consultancy has served as a ladder for him to reach the top tier of the 2020 Democratic primary presidential contest.
Today, McKinsey maintains a global reach in 133 cities and 66 countries with more than 30,000 colleagues. More than 325 of the firm’s alumni have ventured out to become CEOs, a company spokesperson shared.
Though the firm shared that it’s diversifying its hiring strategy by recruiting from 325 universities, McKinsey’s original business model focused on training fresh-out-of-college graduates from America’s most elite schools. These MBA hires can make a base salary of $165,000, a $35,000 performance bonus, and a 50% MBA tuition reimbursement for returning interns. And for HBS graduates who had entered the consulting field — a $165,000 base salary is only its median pay.
The thing to note: McHarvard didn’t happen by accident.
The strategy behind McHarvard
McKinsey’s hiring tactic is a deliberate choice of youth over experience — a strategy that it originated and made standard starting in the late 1950s. That’s according to “The Firm,” a history of the company by Duff McDonald, a veteran business journalist who has also written book-length profiles of JPMorgan Chase head Jamie Dimon and HBS.
In 1953, McKinsey hired its first two top HBS graduates, despite skepticism from more experienced consultants and legendary managing director Marvin Bower. It quickly became a core strategy.
Between 1950 and 1959, as the proportion of consultants at the firm with MBAs climbed from 20% to over 80%, the median age of McKinsey consultants dropped by almost 10 years. Younger and hungrier — and a lot cheaper. Betting on potential has become one of McKinsey’s defining characteristics. The idea was simple: It was easier to mold a young mind than to change an older one. ‘Harvard …. doesn’t teach you accounting or finance,’ McKinsey Alum and convicted fraud Jeff Skilling once said. ‘They teach you how to be convincing.’
The people who end up at McKinsey are often what are called “insecure overachievers.” They’re intensely ambitious — very bright people have always had everything mapped out. Financial Times columnist Andrew Hill said in 2017 that Hermione Granger would have made for an ideal fit.
Then young and ambitious have to leave school and enter the real world.
James Kwak, a former consultant, told McDonald: “The people at these schools are driven by the desire for status and fear of failure. … When you graduate, you reach that terrifying point in your life when the next thing you do is not obvious, when there are a lot more choices than before. McKinsey makes it very easy for people whose primary goal is to keep their options open.”
Consultants get broad experience, a highly valuable line on their résumé, and access to a vast network of clients and alumni once they finally figure out what exactly they want to do. Most employees stay for three to four years before leveraging their consultancy background for a senior-level job and higher pay at large corporations. It’s finishing school for a kind of corporate elite.
Hiring in this way seems so obvious and common now, it’s easy to forget how brilliant and revolutionary it was.
As McDonald puts it, “McKinsey had perfected personnel development. It hired the young and inexperienced for a pittance, then made its clients pay for their further education.”
The firm gets C-suite executives of the world’s largest companies to trust their most secure data and most important business decisions to people decades their junior.
But by hiring from top-tier schools, having a notoriously rigorous hiring process, and putting consultants through brutal reviews that make sure only the best stay, McKinsey managed to create a perfect system.
It also helped turn the MBA into the highly prestigious and highly lucrative degree it is today.
More than 50 years after graduate business schools first appeared, they weren’t very well respected, according to McDonald. But McKinsey, by hiring so many MBAs and serving as a pipeline to prominent jobs elsewhere, legitimized the degree more than anyone else. As a result, HBS became a breeding ground for consultants who would soon make more than $170,000 at starting salaries. Meanwhile, the University of Pennsylvania says that Wharton School business graduates in consulting fields make a median salary of $165,000.
Through its extensive alumni network, job-placement expertise, and hiring practices, McKinsey has helped create the management and MBA elite that is so influential today.
By demonstrating that relatively cheaper youth can outperform expensive experience, they helped build a hiring culture that’s become a business standard. It’s yet another example of the massive influence of the firm.
Business Insider spoke with headhunters who have a proven track record with placing candidates at McKinsey, Bain, Boston Consulting Group, and other elite management consultancies. Their number one piece of advice: Go to an elite school.
McHarvard indeed.
Max Nisen wrote an earlier version of this story.
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