An increasing reliance on AI is prompting the world’s largest consulting firms to freeze graduate pay and reduce new hires. This approach may significantly alter the industry’s traditional pyramid model. While the aim is to improve profitability by increasing productivity, it also threatens to limit opportunities for entry-level talent.
For 2024 and 2025, leading firms in the US are maintaining graduate salaries between $135,000 and $140,000, the same range offered in 2023. This points to a clear pay freeze. MBA graduates are being offered total compensation close to $270,000 to $285,000. In comparison, the big four consultancies have kept salaries unchanged since 2022, signalling heightened caution in hiring as AI technology continues to evolve rapidly.
The decision to maintain pay levels is driven by genuine improvements in output from generative AI tools. These systems reduce the need for large groups of junior analysts by automating tasks like data analysis, market research and slide deck preparation. Firms are starting to focus more on hiring fewer but more experienced professionals. The result is a projected drop of nearly 50% in UK graduate recruitment across major consulting firms next year. This strategic pause comes as AI pushes firms to shift from traditional strategy work towards technology delivery and AI integration services.
On a larger scale, the growing use of AI is putting pressure on the familiar talent model of consulting firms, where junior staff progressed upward or moved on over time. Some industry observers believe the pyramid model could be replaced by formats such as an obelisk or hourglass structure, both of which involve fewer junior roles and a greater emphasis on skilled specialists. A few firms are also trialling "box models" that reduce hierarchy and rely more heavily on senior professionals. Although some leaders still foresee continued hiring of graduates, the wider outlook suggests a significant shift under way.
