Summary of the Compensation in Consulting Firms - 8th Edition survey report of 16 benchmark jobs from Abbott, Langer & Associates, Inc. The following describes the highest and lowest paid job characteristics, the national median total cash compensation for 10 benchmark jobs, and the factors affecting salary (Geographic Area, Type of Service Provided by Employer, Annual Fees, Number of Employees, Type of Work Performed/Supervised/Directed, Experience, Education, Experience Versus Education, Managerial/Supervisory Responsibility).
|The composite highest-income practitioner in this field (salary plus cash bonus and/or cash profit sharing) is the President "A" of a consulting firm (defined as a chief executive officer who is the owner of or a full partner or major stockholder in the firm). The firm provides consulting services in mergers/acquisitions, executive search, management, or financial strategy; receives in excess of $2,500,000 in gross annual fees; has 10 or more employees; and is headquartered in or near Atlanta, Charlotte, Nassau/Suffolk Counties, New York City - Five Boroughs, San Francisco/Oakland, Philadelphia, Chicago, the Virginia suburbs of Washington (DC), or Stamford/Norwalk/Bridgeport. This individual typically has a BA/BS/BBA or a graduate degree, and has 5 or more years of experience. While the median President "A" has a total annual income of $150,000, the highest-income individuals reported in this group make over $1,000,000.
At the far end of the income spectrum (excluding clerical employees), Research Associates have a median income of $39,537. Earning $18,000 or less, the lowest-paid employees in this group usually are employed by firms providing consulting services in financial strategy, marketing, health care, employee compensation/benefits, or education, which receive under $1,000,000 in gross annual fees; have under 25 employees; are headquartered in or near Baton Rouge, Detroit, Charlotte, Omaha, Sacramento, or Jacksonville, or outside the metropolitan areas studied in Pennsylvania, Kansas, or Florida; and usually have little or no college education or experience.
These composites represent the briefest possible "boil-down" of the voluminous data provided regarding current salaries and cash bonuses and/or profit sharing, and numerous demographic variables provided by 144 consulting firms on over 1,800 employees in 15 benchmark jobs. The end results of the survey, sponsored by the Association of Management Consulting Firms, appear in Compensation in Consulting Firms, 8th Edition - 2003, a 157-page statistical analysis of compensation in this field. Copies of the report are available for $650.00 from Abbott, Langer & Associates, Inc., Dept. ART, 548 First St., Crete, IL 60417; telephone 708/672-4200; fax 708/672-4674; www.abbott-langer.com.
It would be an exercise in futility to attempt more than a superficial overview of the survey results in this summary. However, some overall data regarding compensation can be presented herein, and some comments can be made.
In addition to the incomes of the benchmark jobs already discussed, the median total cash compensation nationally for the other 13 benchmark jobs included in the survey report is:
Senior or Executive Vice Presidents - $144,200
Vice Presidents - $136,965
Branch Managers - $129,700
Principal Consultants - $98,000
Chief Financial Executives - $83,500
Senior Consultants - $80,000
Chief Marketing/Sales Executives - $71,692
Consultants - $58,817
Junior Consultants - $48,248
Naturally, these nation-wide pay rates vary by region, state & metropolitan area, type of consulting services provided, annual fees received by the firm, size of firm, and type of consulting performed/supervised/managed, level of education, length of experience, and supervisory/managerial responsibility involved - all demographic variables for which data are provided in the complete report.
The median total annual cash compensation for supervisory/managerial personnel is highest in the Pacific and northeastern states, and lowest in the north central and southwestern states. The midwestern, southern, and Rocky Mountain states fall in the middle of the range. Regarding metropolitan areas alone, the highest median annual incomes reported are found in or near: Nassau/Suffolk Counties, Stamford/Norwalk/Bridgeport, Atlanta, Chicago, Portland (ME), the Maryland suburbs of Washington, DC, and Charlotte. The lowest median annual incomes are found in Buffalo, Cincinnati, Tampa/St. Petersburg, Omaha, Boston, and Portland (OR).
Median total annual cash compensation for consultants is highest in the northeastern and Rocky Mountain states, and lowest in the Pacific and north central states. The southwestern, southern, and midwestern states fall somewhere in the middle. Regarding metropolitan areas alone, the highest median annual incomes are found in or near: New York City - Five Boroughs, Stamford/Norwalk/Bridgeport, Nassau/Suffolk Counties, Rochester, Dallas/Ft. Worth, Phoenix, Philadelphia, and Milwaukee. The lowest median annual incomes are found in Tampa/St. Petersburg, Tulsa, Cincinnati, Omaha, Los Angeles/Long Beach, Washington (DC), and Pittsburgh.
Type of Service Provided by Employer
Overall, supervisory/managerial staff are paid best in mergers/acquisitions, executive search, systems development & integration, and financial strategy consulting firms. It is lowest in marketing, organization design/structure/control, government, education, and management strategy consulting firms.
For consultants, the highest compensation is found in executive search, systems development & integration, financial strategy, management, and mergers/acquisitions consulting firms. It is lowest in government, marketing, employee compensation/benefits, and health care consulting firms.
This factor is a fair indication of the median total annual cash compensation received by both supervisory/managerial personnel and consultants. They are paid most when annual fees are $10-$24.9 million. Both supervisory/managerial personnel and consultants are paid least when fees are under $500,000.
Number of Employees
This factor is not a good predictor of median total cash compensation for either supervisory/managerial personnel or consultants.
Type of Work Performed/Supervised/Directed
For supervisory/managerial personnel, median total annual cash compensation is highest when the type of work performed/supervised/directed is in employee development, mergers/acquisitions, executive search, management, or marketing/sales consulting. It is lowest in fundraising, marketing, advertising, education, or organizational design/structure/control consulting.
For consultants, executive search, insurance, systems development & integration, banking, and psychological services consulting result in the highest median total annual cash compensation, while fundraising, marketing, education, financial strategy, hospitality, employee selection, and government consulting result in the lowest.
This is not a fair predictor of median total annual cash compensation for either supervisory/managerial employees or consultants.
This factor is a fairly good indicator of median total annual cash compensation. Supervisory/managerial personnel with an MBA degree, for example, were the highest paid ($159,500), 110% higher than personnel with less than a BA/BS/BBA degree.
Consultants with both an MBA and an MA/MS degree received $102,545 in total annual comparison, while consultants with less than a BA/BS/BBA degree received $54,246, an 89% difference.
Experience Versus Education
A combination of experience and education is a better predictor of compensation than either area alone. While dealt with in detail in the report, space does not allow an analysis of the data herein.
Median total annual cash compensation varies greatly according to the level of supervisory responsibility. Compensation is highest for supervisory/managerial staff who supervise 10 or more professional employees. For consultants, compensation is highest with supervisory responsibility for five to nine professional employees.