TL;DR

Major consulting firms including McKinsey and BCG have frozen graduate starting salaries for the third consecutive year as AI transforms their business model. UK recruitment could drop by half, with firms shifting from the traditional pyramid structure to models requiring fewer junior staff and more experienced specialists.

The Pyramid Under Pressure

The consulting industry’s traditional business model faces its most significant challenge in decades. Top firms including McKinsey, Boston Consulting Group, and Bain & Company have held graduate starting salaries flat for three consecutive years, whilst Big Four firms haven’t increased starting pay since 2022.

The driver isn’t simply market conditions—it’s artificial intelligence. “There are real productivity improvements from AI implementation inside firms,” explained Namaan Mian of Management Consulted. “The ability to wring more value from fewer junior employees is putting downward pressure on salaries.”

PwC’s global chair Mohamed Kande confirmed the shift, noting that AI had increased productivity and the firm was seeking “a different set of people”—including more engineers—rather than traditional generalist graduates.

New Structures Emerge

Industry experts are predicting fundamental changes to consulting’s iconic pyramid structure, where thousands of junior staff narrow to senior partners through “up or out” promotion culture. Several alternative models are emerging:

The obelisk structure features fewer layers and reduced reliance on junior staff. The hourglass model remains pinched in the middle as AI automates routine mid-level tasks. The box model, advocated by Alvarez & Marsal, matches senior staff more closely to junior numbers, emphasising experienced professionals over large analyst pools.

Two senior Big Four executives estimated UK graduate recruitment across major firms could drop by approximately half in the coming year—partly commercial, but significantly driven by AI anticipation.

Looking Forward

The transformation extends beyond hiring. PwC cut 150 US back-office staff citing digitalisation. McKinsey eliminated 200 global IT positions. Accenture reduced headcount by over 11,000 in three months.

Some former Big Four partners are launching AI-native boutiques designed to replace much of the traditional junior cohort entirely. As one noted: “The base will shrink as routine work is automated, but the need for experienced judgment at the top will become even more critical.”

Not everyone agrees the pyramid will collapse—McKinsey plans to hire 12% more graduates in 2026. But the consensus suggests significant contraction is inevitable, with the timing and ultimate shape of consulting’s workforce transformation still uncertain.

Source: Irish Times