PracticeConsultingConsulting survey: Goodbye to high salaries

Consulting survey: Goodbye to high salaries

The days of using high salary increases and huge bonuses to retain consultancy staff are over, according to the latest salary survey by Management Consultancy.

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The study showed that only 5% of consultancy firms questioned said pay packets would rise during the remainder of 2004.

Compared with MC’s last survey, salary expectation trends had dramatically altered. In the past, firms were only using one method to attract and retain staff – continued wage increases. During the last 12 months, firms have frozen many salaries across all job tiers, despite it being a period when the industry has slowly recovered.

Graph: Average basic annual salaries

Junior consultants have also seen little change in their salary in the last few years, despite inflation. Four years ago, a graduate trainee could expect to earn around £19,770, while most respondents to the survey this year said the same graduate would only receive around £20,000.

Growth in the lower echelons of the industry has also been stunted with a large proportion of firms saying they were either not recruiting graduates or they did not have any.

For those employees on the next level up who have had some business knowledge, but no previous consultancy experience, received £22,800 four years ago, while today the same employee can expect to earn around £25,000.

MC discovered that firms valued a blend of experience and seniority more than youth. The lower numbers of graduates employed show that demand for consultancy has not sufficiently recovered.

The survey also revealed that the biggest gains were made in senior positions where a combination of high salaries and total remuneration packages reaped the biggest rewards. The highest-reported basic annual salary for a principal consultant was £91,000, with a survey average of £68,400, proving that firms are doing all they can to hold onto their most-valued staff.

Niche firms were found to be the best payers with the highest figures typically arising from smaller companies with only a handful of staff and those concentrating on specialist areas.

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