| 21-Sep-2004 |
Survey findings reveal more than a third of consultants are expecting double-digit pay rises in the next 12 months |
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How fast the tide turns. Only a year ago consultants were a somewhat moribund bunch, with prospects for pay rises and bonuses looking distinctly unfavourable. There was a glut of consultants on the market and very few new openings for disillusioned consultants to consider. In short, it was a buyer’s market for consulting staff and firms saw little need to hike up pay to retain consultants. As a result, 60% of consultants in both the US and UK markets received a pay rise of less than 5% during the last year – and over 30% had a pay freeze or pay cut imposed. For many, 2003/4 was a pretty grim time to be a consultant.
One year on, this situation has been turned on its head. Over 60% of consultants in the US and UK markets now expect a pay rise of over 5% during the next year, with the average pay rise expectation standing at 7.9%. Most notably of all, over a third of all consultants now expect a double-digit pay rise during the next year – so to keep star performers, this is the rate consultancies are likely to have to pay in the coming year.
No wonder recruitment managers have been fretting over retention of late, as consultants increasingly look to opportunities with competitor firms as a way of renewing their rise up the pay scales. Several of the major consultancies are understood to be sanctioning significant pay rises to address this very issue and try to prevent consultants from looking at opportunities with other firms.
The findings come from a comprehensive survey undertaken by Top-Consultant.com during the last two weeks, in which a thousand consultants from the UK and US markets were polled. The change in salary expectations follows a dramatic surge in management consultancy recruitment campaigns during 2004 – especially in the UK market. The effect of this renewed recruitment activity seems to have been to bolster consultants’ perceptions of their market worth.
The mood of US consultants seems equally buoyant, despite the US market having suffered more than its UK counterpart. Pay cuts were more widespread in the US during the last 12 months – with more than 10% of consultants enduring a pay cut. Commentators have also noted that the upturn in recruitment has been less pronounced in the US than in the UK. Nonetheless, the pay rise expectations of consultants seems just as high in the US market, perhaps reflecting a hunger on the part of consultants to recoup some of their lost earnings from the downturn.
Commenting on the findings, Top-Consultant Director Tony Restell remarked:
“Seeing major firms like Accenture, BearingPoint, IBM and PA Consulting all now aggressively recruiting has given management consultants a renewed belief in their market value… and has made many candidates stop to ask themselves if their careers are best served staying where they are. Increasingly consultants are looking at opportunities with rival firms – or the smaller niche consultancies – as the best means of accelerating their career progression and making up for the ‘lost ground’ of the last two years. The upshot is that the best consultants clearly have high expectations of their market worth and will move or stay depending on which firm can meet these expectations. I would expect many firms to start feeding pay rises through to their best staff, to head off retention problems at the turn of the year.”
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