Consulting is one of the most sought-after careers for graduate students looking to work in a high-responsibility and dynamic work environment. While almost everyone has heard about the prestigious careers in management consulting, there is a career that is quite similar and just as lucrative in economic consulting.
In this article, we will examine a few of the similarities and differences between these two attractive career alternatives.
Similarities
1. Salaries
The consulting industry in general is known for having very high paying jobs, and this is equally true for both management and economic consulting.
A college graduate starting at an entry-level position will make more than $80,000 in both industries (including signing and performance bonuses), with the pay differentiating more between firms than across industries.
The most well-known firms will pay a premium of about 20%. This includes MBB, Big Four, and Oliver Wyman for management consulting, and Analysis Group, NERA, Cornerstone, and CRA for economic consulting.
For students with a master’s degree (including an MBA), the starting salary is about $150,000 including bonuses.
2. Work-life balance
If you want a 9-5 job, consulting isn’t the best career choice. While the weekly hours you work will vary depending on what case you are assigned to, the average is about 50 to 60 hours per week, and it is not uncommon for consultants to work 80 hour weeks. That corresponds to between 10 and 16 hour days. The number is the same for both industries.
Differences
1. Day-to-day work
In short, management consulting is mostly about soft skills whereas economic consulting draws on hard skills.
In management consulting, you can expect to conduct research, do some low-level data analysis, and create slides for clients.
In economic consulting, you can expect to apply economic concepts to quantify a client’s problems, using econometrics and high-level data analysis on a day-to-day basis.
While most management consultants will not have to work with programming languages, an economic consultant is expected to be an expert in software packages like Stata, R, and SQL.
While working on one case at a time is prevalent for management consultants, economic consultants are often expected to juggle two or more cases in any given week.
An example of this difference can be seen in the interview phase. Management consulting companies will focus on the case interview to test an interviewee’s business and problem-solving skills, whereas economic consulting companies will ask for detailed information about previous research projects that included a lot of data analysis.
2. Clients
Consultants in each industry serve different types of clients.
Management consulting companies work mostly with Fortune 500 companies, international organizations, and governments on a wide range of different projects.
Economic consulting companies work almost exclusively on litigation and lawsuit cases, where the majority of their clients are law firms or financial institutions. While economic consultants might encounter Fortune 500 companies, it is much less common.
3. Colleagues
Almost all consulting companies embrace a collaborative work environment where consultants work in teams. As a result, the type of people you will work with is an important distinction.
Management consultants come from a wide range of different backgrounds, and on a single case you may be working with people who have a background in economics, history, biology, or numerous other fields. There are typically a few experts with PhDs and most of the higher-level consultants will have an MBA.
Economic consultants tend to have a more similar background, where a higher percentage studied economics or a STEM-focused subject and there are a lot more experienced employees with PhDs or law degrees. For some economic consulting companies, it is mandatory that you undertake postgraduate studies in order to receive a promotion, while this requirement is less prevalent for management consulting.
4. Exit opportunities
Management consultants have numerous exit opportunities. Some of the most popular routes include going into private equity, investment banking, joining a large company in a strategy position, or pursuing an MBA.
Economic consultants tend to favor software engineering or other job opportunities focused on data analysis, and in pursuing further studies there tends to be an emphasis on getting a law degree or a PhD.
The bottom line
Even though they might appear similar at a glance, there are quite a lot of differences between management and economic consulting.
Management consulting is a great opportunity for people interested in doing research, learning about multiple industries, solving different problems for a wide range of companies, and pursuing an MBA.
On the other hand, economic consulting is a great avenue for individuals keen on programming, data analysis, and focusing on litigation and expert testimonies rather than management and profitability issues. Economic consulting is also a natural pathway towards a PhD in economics or a law degree.
Tringa Krasniqi holds an MBA degree from The George Washington University. She is the founder and consultant at Ivy Journey, an educational consulting firm for gaining admission to universities and winning scholarships.
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