Big consultancy firms are avoiding salary inflation by loading rewards towards fringe benefits and performance related payouts, according to a new survey from the Industry Research Group.
IRG managing director Philip Abbott said: “I looked at the total remuneration package as opposed to salaries for operational staff, not partners or directors. The larger firms are not necessarily offering the largest salaries but the value of the total package is far greater.”
According to Abbott, larger firms offer a spread of benefits, ranging from healthcare to profit sharing.
“Senior consultants with teams reporting to them, in charge of projects, could have a base salary of #50K-80K,” says Abbott. “Profit-sharing could add another #50,000, plus a performance-related bonus that could add another #50,000.”
The advantage of this, says Abbott, is that the firms have the ability to adjust their wage bill to a recession without necessarily making large numbers of staff redundant.
“In a downturn the profit share goes, and the performance bonus is trimmed down – they’re not committed to paying the salary,” he said. “In any case, the bonuses are not across the board – they only pay the high achievers. Others get nothing.”
Abbott said he was also surprised at how low salaries were at the opposite end of the scale, even though only the top 100 firms were surveyed.
“A business consultant on a smaller project, say a graduate with up to four years’ experience, is often on less that #25,000, with a package limited to basic healthcare and some pension contributions,” he said.
Sectors attracting a premium salary are strategy and financial sector, currently running at around 20 per cent above average, while manufacturing and local government are about 5-10 per cent below. IT skills appear to attract no premium.
Consultants also seem resistant to the lure of the company car.
“There are a lot of Ford Mondeos out there,” said Abbott. “Where they go for cars it’s generally standard fleet models. But most don’t provide cars. But if a consultancy is active on a European basis or internationally it’s far more important to be able to fly them around than give them a car.” Abbott added that where cars were offered, consultants frequently opted for the cash alternative.
Consultancy Remuneration Packages, published this month, costs #460 from the Industry Research Group, 0181 542 3466.
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