Base salary and total remuneration of consultants in the UK
Salaries and remuneration packages of management consultants in the UK have not changed much over the past year, despite an improving market, as fee pressures from clients limit the scope for uplifts. A Junior Consultant on average earns a base salary of £30,000 per annum, while an average Director in the consultancy industry can earn up to £190,000 including benefits and bonuses.
New data from Prism Executive Recruitment, an executive search firm for the consulting industry, shows that average base salary for consultants has seen little movement over the previous year. The survey performed by the recruitment specialists was compiled through data from the firm’s clients, candidates, recruiters and other information both private and published. Partner and equivalent very senior executive level roles have also, across the board, seen stagnation over recent years.
Despite an improving UK consulting market, non-Partner employees are seeing little improvement in their pay, in large part due to the continued pricing pressures of clients demanding better value for money, and so staff are becoming increasingly willing to search for a new role elsewhere in order to improve their salary – though the chief reason for moving on is said to be for better career progression, new challenges and an improved balance between life and work.
There are however a number of variations beyond the underwhelming averages. Firstly, between firm types there were considerable differences, with larger sums due for different kinds of consulting work enabling some varieties of consultants to pay more than others, with the most considerable wage going to strategy consultants generally. Meanwhile, the Big Four group of KPMG, EY, Deloitte and PwC all reside within the upper quartile of pay packages, thanks to their huge, diversified capabilities being able to continuously draw multiple forms of client business, rather than depending on one market segment which may or may not be going through growth. Pay is often also tied to individual performance at firms, and majorly affected by region too. The average salary ranges relate primarily to the base salary of consultants working in or around London, although it is well known that as with most industries, the UK capital’s pay and conditions are higher than in other locales.
Based on Prism’s research, with the addition of estimated percentages for benefits and bonus which can vary per firm, consulting type (strategy, M&A, finance, change management, etc), seniority, UK region, there is considerable variation in the value and composition of the benefits package and variable pay component. Bonuses range from a potential 0% - 5% at junior levels, to as much as 40%, with a small fraction even being “uncapped”, at the most senior grade.
Bonuses are usually dependent on a mix of personal objectives and those of the firm – at more senior levels personal objectives are frequently weighted towards sales. Comparing the equivalent cash value of benefits to base salary, the benefits typically work out at 10% - 20%, with a tendency for more senior levels to receive more generous rewards, including car allowances and greater pension contributions. While some outliers do lag behind meanwhile, the usual minimum number of holiday days is 25.
At the second level in consulting, a Consultant will typically have 3-7 years post-graduate work experience. Consultants generally earn a base rate between £40,000 - £60,000. Benefits and bonuses typically are estimated to add an additional £3,000 to this figure. Senior Consultants meanwhile bring in the greatest level of variation in wages outside of the management positions. These positions are reserved for employees with a minimum of 5 years’ experience, all the way up to 12 years. While they might have a level of involvement in sales/business development (i.e. contributing to bids/proposals), along with experience of managing small teams, often perhaps as a workstream in a larger project, Senior Consultants overwhelmingly are a chargeable delivery resource – and can earn between £50,000 - £80,000 per year, with a potential for an estimated £7,000 in annual benefits and bonuses. This large variation means in some cases that a Senior Consultant at one company could earn less than a Consultant with less experience at a more lucrative firm, either in the Big Four or based in strategy consulting.
The same is also true of Managing Consultants/Managers. While projected 9% benefits and 12% bonuses could see these staff reap an additional £23,000 per year, base wages range between £70,000 - £110,000. At this level consultants have at least 7-15 years’ experience, some of which will most likely include several years in consulting. Individuals would be expected to be capable of managing small – medium sized consulting engagements with typically 2-5 consulting staff and a similar number of client staff. While a Managing Consultant may often have some business development responsibilities, becoming involved in sales, particularly “sell on”, they most likely do not carry a target, and their focus would still be as a chargeable labour resource, with perhaps 60% - 75% utilisation.
Most experienced
Meanwhile, Principals or Senior Managing Consultants will have 10+ years’ experience. Several of these will be in consulting, with workers able to operate independently at a senior level with clients including managing major engagements or multiple projects. At this level, the consultant will have sales and business development targets, and may “own” relationships or overall accounts. While this role can be paid between £85,000 - £130,000 a year as a base rate, a number of these roles sit on the upper end of the scale, with £110,000 the median and estimated benefits and bonuses pushing that to £150,000 – as some larger firms organise themselves as “top heavy” with these members of staff, paying these consultants Director level salaries, rather than promoting them, as a retention strategy.
Directors themselves receive base rates of £100,000 - £180,000 per year, and due to the highest estimated rate of any position listed in these figures, of 11%, along with 21% in bonuses, could see income of an estimated £190,000 per year according to the median figure. These are very experienced and successful consultants with at least 13 years’ experience and often 20 years or more. While, as the fact some Principals are paid as Directors, these roles have all the attributes of a Principal Consultant and will also usually have (significant) formal sales or revenue targets, in smaller firms these staff might be the most senior consultants apart from the owner(s) or the Managing Director. In mid-sized organisations or the consulting arms of IT/outsourcing businesses, they might report to the Board or Head of Consulting. In the Big Four and major advisory firms however, the Partner grades, which would own larger accounts and have higher targets, would be above this.
Partners
While Prism Executive Recruitment deliberately did not include Partner level consultants, due to the great range in value and differences in make-up of remuneration packages making simple summary figures impractical, Consultancy.uk added indicative data in order to examine the full array of positions. It is important to take those figures relating to the position with caution in this case, as they are estimates, while a concrete figure is much harder to nail down in this aspect of consulting. A Partner’s performance, especially Equity Partners, depends on performance of firm, as seen with Grant Thornton in 2016, which saw distributable profits per partner drop to £344,000 from £398,000 at the end of 2016, despite making a profit before tax of £72 million. Partner salaries can therefore range from nothing if a firm is performing terribly, to a minimum agreed ‘salary’, to a hefty profit share when things are going well. This means the range for a “base rate” here is taking the term very loosely, but could see Partners earn between £150,000 - £250,000+ when taking into account potential profit shares as well as benefits.
Meanwhile, at members of the Big Four, the four largest professional services networks in the world, the potential is at the upper end of that estimation. In 2016, Deloitte’s UK Equity Partners were paid an average of £837,000 each, while partners at PwC, KPMG and EY earned averages of £706,000, £582,000 and £662,000 respectively. There are also many different levels of Partners meanwhile, which, as with the lower ranking consulting positions, earn higher amounts proportionally. Junior Partners earn comparatively little, while Senior Partners take the lion’s share of distributable profits.
While the figures in each sector are still on average higher than a great deal of UK wages, consulting firms will be keen to find ways of retaining talent other than pay. Looking ahead, despite an improving market, researchers believe there is little to suggest salaries are likely to rise dramatically over the coming years. As consulting firms’ come under pressure to cut costs and deliver better value for money to clients, with respect to charge out rates, the scope for any uplift to either existing or new staff in wages is limited. Pay parity is one method that top consultancies are increasingly employing, with the hope that consultancies like the Big Four can attract and retain female consulting talent by addressing the gender pay-gap. This would not necessarily result in a higher average wage in the terms addressed by Prism’s study, however it might more evenly distribute the current wage-bill in a way that would see an effective pay-rise for a large section of staff.
Related: Secondary benefits in management consulting.
