The management consulting industry overall tends to have a relatively low transparency in the area of remuneration policy. Basic salaries are hardly communicated in job ads, and in addition consulting firms tend to tightly hold back details over their benefits & rewards packages during recruitment events and job application procedures (until the last round).
In addition, there is a large variety in remuneration across the advisory industry, depending on a range of factors such as the type of firm (business model, performance management system), the type of industry/service area a consultant is working in and individual performance.
Although remuneration data such as salary, benefits and bonus does not lie out in the open, there are a number of sources that regularly conduct research in the field (typically recruitment firms specialised in the industry and/or analyst research firms). An overview of estimates on salaries and benefits*:
The data reveals that average total salaries in the UK consulting industry range from roughly £44,000 for junior consultant to just under £170,000 for partners. On average additional benefits represent nearly 10% of the basic salary, while bonuses equate to 7% of salaries, although the bonus % rises gradually as consultants grow through the ranks. The bonus of a junior consultant on average represents 4% of the basic salary, for partners the percentage rises to 12%.
Salaries per market segment
As mentioned above, salaries of consultants differ widely. One of the key explanatory factors is the type of services – as a general rule of thumb: the more prestigious a firm and/or consultant role, the higher the pay. Data shows that junior consultants employed by the leading strategy consulting firms earn substantially more than their peers in operations consulting (+30%) or project management (+25%). Differences remain throughout a consultant's career path, although they according to the data diverge, mainly the result of an increasing importance of variable-based pay. For example, at Manager level the differences between remuneration are significantly smaller across the main areas.
Firm type, region and more
Another factor that has an impact on the height of salaries and benefits is the type of employer. A recent international study shows that for exactly the same level (junior consultant) and role (Finance) the Big 4 firms pay slightly more than other large peers (mid-sized professional services firms, large IT consulting firms) and nearly 5% more than mid-sized management consultancies.
A third factor is geography. According to recruitment firm Beament Leslie Thomas consultants in the London area earn the most, while peers in for example Manchester or Birmingham are paid on average 5% less. Scotland is from a remuneration perspective the least attractive area in the UK, salaries are 88% of the London baseline, a statistic that was recently also recognised by a recent salary survey from Michael Page. The gender of consultants (unfortunately) also still plays a role. Although data in the UK is not available, recent studies conducted abroad reveal that on average male consultants in every level earn more than their female counterparts. The gender pay-gap increases as consultants progress through the ranks, although this too can be explained by among others differences in work-life attitudes and the design of performance management systems.
More than just pay
It is important to keep in mind that total remuneration covers more than just primary and secondary benefits such as salary, benefits and bonus. Contracts typically also include other financial aspects such as holiday allowance, private health coverage, pension contribution schemes and lease agreements. To properly compare remuneration an integeral view should be taken to ensure all elements are included.
In addition, consulting firms are increasingly adopting non-financial incentives that can largely benefit the well-being of consultants. Examples include flexible mobility budgets, part-time working, sabbatical arrangements, more holiday days, career customisation and training budget. As such incentives can down the line make a real difference, also here it is advised to include these aspects into the equation.
* The most recent 'Salary Benchmarking Report' from Top-Consultant and Mindbench. The survey is based on the input from 734 consultants based in the UK across all levels and service areas.