MBA internships are excellent for many reasons that we covered in an earlier post (read How MBA internships work). The top two being – they take you closer to your dream job and they end the long no-income phase that the MBA forced you into. Interestingly, MBA internship salaries figure at the bottom of the priority list when students choose their companies. The other aspects that figure higher on the list are – the internship function, industry, company reputation and growth potential.
Despite all that, there’s no denying that the interns get paid top dollar by the best MBA recruiters to attract prospective employees early on i.e. before the formal placement season begins.
No. There’s no rule or bschool policy that mandates companies to pay their interns. In a tough economy, most business schools aren’t really in position to force companies to do anything.
In many cases, students are more than willing to work for an employer for free if the internship is in the right industry and role.
Other recruiters might pay a modest salary to interns to be on the right side of the fence, or they might agree to pay out-of-pocket expenses (commuting, canteen, pills to tackle stress & work overload etc).
The real fun is when you are attending a top-tier bschool and are competitive enough to enter one of the lucrative post-MBA careers in investment banking, consulting, technology, healthcare, FMCG or any other MBA friendly industry.
According to data collated by Poets & Quants, a leading source of bschool news, the average internship salary at the top bschools for the class of 2013 was $7,000 per month. Extrapolated for the whole year, that would correspond to $84,000 per annum.
We aren’t considering the components that impact this number in full-time jobs (like the 401K contribution, the equivalent of our provident fund).
Either ways, the average internship salary doesn’t really mean much unless you start digging deeper at look at the range of internship pay for specific industry.
Management consulting internships come up on top. At the top consulting firms, the median monthly internship salary was $10,500. That’s the equivalent of $126,000 annually. This looks way better than the general average.
Investment banking internships pay well too. The median pay for interns was $8,333 per month, which scales up to $100,000 each year. Within this broader sector, hedge funds paid more ($9,615 monthly or $115,000 per year) and venture capital funds paid lesser ($61,000).
Government and Non-profit internships offered more modest salaries. The average monthly pay was $4,800 (equivalent to $58,000 annually).
Tech start-ups, stuck in an era between dot coms and dot cons, seem to be the worst pay-masters when it comes to internships salaries. Not too many bschools have shared this data, but if Booth figures are any indication ($550), internet and ecommerce startups seem to have become less aggressive in chasing top talent.
|School||Internship salary (per month)||Financial Services||Management Consulting||Healthcare|
|Data Source: P&Q|
The companies that pay these salaries are the best in the business. We’re talking about the top consulting firms (McKinsey, Bain, BCG) and investment banks (Goldman Sachs, JP Morgan, Citi etc). Other companies that are a notch lower in the pedigree arena may have lower internship payscales.
Next up, we talk about the right companies to target for the best internship opportunities, which bschools they prefer and how you can convert your internship into a permanent job.