Davis Nguyen specialises in helping college seniors begin a career in management consulting. It’s an industry that historically pays well: even before the pandemic, some of the biggest firms offered undergraduates salaries that often approached the six-figure mark.
However, in the current market, Nguyen’s clients are doing particularly well. “They’ll come back and say ‘I have two great offers’,” explains the founder of My Consulting Offer, based in Georgia, US. “One is for $120,000 (£91,630), the other is for $140,000 (£106,900). Today’s climate means graduates can earn much more money than a few years ago.”
Management consulting is among the sectors in which graduates are increasingly walking straight from the lecture hall into six-figure roles – earning pay packets most people will never see in their lifetimes. In Big Tech, entry-level software engineers are often starting on such wages. At the largest banking corporations, pay for first-year analysts has spiked nearly 30% – a $110,000 (£83,979) base salary, in some cases. At the biggest London law firms, some newly qualified solicitors begin their careers on a £107,500 salary ($141,115). Nguyen says “20-year-olds earning $100,000 from the get-go” has increasingly become the norm since the pandemic.
Often, these young employees are joining firms where colleagues began with lower pay, and had to work hard for years to earn six figures. Such organisations would argue it’s a response to market needs: the hiring crisis means the competition for talent remains fierce; if an employer wants the best candidates willing to put in long hours, they have to pay a high price for them.
However, beyond matching the market rate, does offering graduates huge pay packets actually bring benefits, like incentivising longer hours or boosting work ethic? Or can it create unintended consequences, for both the young high-earner as well as the wider workforce?
‘High pay is an expectation’
Wages for graduates have been steadily rising for years. According to 2021 data from US non-profit the National Association of Colleges and Employers, the starting salary for some entry-level workers in particular fields has spiked dramatically: for example, the average wage for a computer-science major has risen to $72,173 (£55,100) – a 7% hike in just one year.