Aktuelle InSights

By Yao Tang - Business Development Manager

Companies across industries are expanding their consulting divisions through a mix of strategic acquisitions and internal growth. This trend is driven by the rising demand for integrated solutions, the pursuit of high-margin revenue, and the imperative to support clients through digital transformation. In this article, we explore the strategies behind these expansions, highlight key examples from various sectors, and discuss the HR challenges that arise when integrating consulting roles into existing compensation structures.

Expansion Across Sectors

The trend toward incorporating or expanding consulting capabilities is evident across a range of sectors—from technology to private equity, specialized industries, and traditional accounting—where companies are leveraging strategic acquisitions and internal growth to meet the rising demand for integrated, expert advisory services.

A. Technology Firms Moving Beyond IT Services

Technology companies are increasingly shifting from their traditional focus on IT services to broader consulting roles. For instance, NEC’s acquisition of ABeam Consulting in 2023 represents a strategic move to expand its advisory offerings. Similarly, in 2023, Accenture’s acquisition of InfinityWorks—a leader in agile digital transformation solutions—underscores the growing demand for integrated advisory services. In addition, other types of firms are also responding to this trend; for example, EY’s 2022 acquisition of Nuvalence has enhanced its digital transformation expertise, reflecting a broader industry move toward offering comprehensive, end-to-end consulting solutions.

B. Private Equity’s Interest in Consulting

Private equity firms are capitalizing on the high-margin revenue potential of consulting services. The ongoing discussions by Apax Partners to acquire a majority stake in CohnReznick, along with Inflexion’s 2025 acquisition of Baker Tilly Netherlands, reflect a broader trend of investing in professional services with established consulting practices. These moves are not only financial transactions but also strategic efforts to diversify revenue streams and build more resilient business models.

C. Specialized Industry Consulting

In specialized fields such as life sciences, biotech, and pharmaceuticals, targeted acquisitions have become a key strategy. Sia Partners’ 2022 acquisition of Latham BioPharm, for example, deepened its expertise in these sectors. By focusing on niche advisory services, firms can offer tailored solutions that address the specific regulatory and operational challenges inherent in these industries.

D. Accounting Firms Strengthening Their Advisory Services

Accounting firms have long offered professional advisory services, and many are now expanding these capabilities. PwC’s 2023 acquisition of Sagence boosted its data and digital transformation advisory, while Deloitte has expanded its digital consulting presence in both the U.S. and Europe. KPMG’s acquisition of Russell Reynolds Associates and Grant Thornton’s 2024 partnership with New Mountain Capital further underscore the trend of blending traditional accounting services with modern consulting approaches.

Key Drivers Behind the Expansion

Several factors are motivating firms to broaden their consulting capabilities:

• Digital and AI Expertise: The rapid adoption of technologies such as cloud computing, automation, and AI has created an urgent need for expert guidance. Consulting services now play a critical role in helping organizations navigate digital transformation.
• Revenue Diversification: Consulting provides recurring, high-margin revenue streams that complement other business areas. This diversification is particularly attractive in a volatile market environment.
• Client Demand for Integrated Services: Clients increasingly seek comprehensive, end-to-end solutions that combine strategic advice with practical implementation. Firms are responding by integrating consulting services into their broader offerings.

HR Challenges in Integrating Consulting Roles

Integrating consulting roles into established compensation structures presents several HR challenges:

1. Differing Compensation Structures

• Consulting Models: Often include performance-based bonuses, accelerated salary progression, and equity incentives at senior levels.
• Corporate Models: Typically rely on fixed salary bands and standardized annual raises.
• The Challenge: Balancing these models to avoid pay disparities while remaining competitive in both markets.

2. Incentives and Career Progression

• Consulting Firms: Employees expect rapid promotions and profit-sharing opportunities.
• Traditional Corporations: Generally emphasize structured career growth based on tenure.
• The Challenge: Designing career paths that attract top consulting talent without undermining traditional career progression models.

3. Recruitment and Retention

• Consulting Talent: Often drawn to project-based, performance-driven roles but tend to be more mobile.
• Corporate Talent: Typically prefer longer-term, specialized roles with predictable career paths.
• The Challenge: Crafting recruitment and retention strategies that effectively appeal to both types of professionals.

4. Accurate Benchmarking of Compensation

• Consulting Benchmarks: Usually compared against peer consulting firms.
• Corporate Benchmarks: Often aligned with industry-specific salary norms.
• The Challenge: Developing a hybrid benchmarking approach that reflects both consulting and corporate compensation standards to ensure internal equity and external competitiveness.

How Vencon Research Supports Compensation Strategy

Vencon Research plays a crucial role in helping firms navigate these HR challenges by providing detailed compensation benchmarking for consulting roles. With access to comprehensive market data, organizations can align their pay structures with industry standards while maintaining competitiveness and internal equity. Whether expanding a consulting division or restructuring compensation strategies, Vencon Research offers insights that support strategic growth and stability.

‍For more information on aligning your compensation strategy with industry standards, please contact Vencon Research to learn how our services can support your organization’s strategic objectives.

The European Union has introduced an important update to its regulations on pay transparency, aimed at addressing gender pay disparities and fostering greater fairness in salary practices across its member states.

This new legislation mandates that companies disclose salary information in job postings, provide employees with clear insights into pay structures, and allow individuals to understand how their compensation compares to others in similar roles. While this shift represents a major leap toward a more transparent and equitable workplace, it also creates new challenges and opportunities for businesses to adapt their compensation practices in line with evolving regulations.

What the EU Pay Transparency Directive Means for Employers

The EU’s Pay Transparency Directive, which will fully take effect by 2027, imposes several key obligations on employers. One of the most significant changes is that companies with 250 or more employees (and eventually 100 employees by 2031) will be required to disclose detailed pay data. This includes breaking down salaries by gender and role, a practice that will no longer be hidden behind confidentiality clauses or other restrictive policies. Companies will also be required to report this data on an annual basis, increasing visibility of any pay disparities and putting pressure on businesses to act.

Under the new rules, if a gender pay gap of over 5% is discovered, employers must conduct a joint pay assessment with employee representatives to investigate the cause of the gap and take corrective measures. This provision forces businesses to confront any existing disparities and make necessary adjustments to their compensation structures. Furthermore, employees will have the right to request pay information at any time, enabling them to negotiate more effectively and ensure fair treatment in salary discussions.

Ensuring Competitive and Fair Compensation

The introduction of these new transparency measures highlights the need for companies to stay competitive by offering fair compensation packages that align with market standards. With the increased visibility into pay structures, firms will need to be proactive in reviewing their compensation practices to ensure they meet legal requirements and reflect industry trends.

By using detailed, market-based data, organizations can make informed decisions about their pay structures, ensuring they attract top talent while maintaining equity within their teams. This becomes especially important as businesses seek to comply with the new EU regulations and avoid potential backlash for not addressing pay disparities.

Adapting to the New Regulatory Landscape

The EU’s pay transparency initiative is more than just a regulatory obligation; it is an opportunity for businesses to demonstrate their commitment to fair pay practices. Firms must act swiftly to ensure their compensation structures are not only compliant but also aligned with broader market expectations. This will involve examining not just salary figures, but the full spectrum of compensation, including benefits, bonuses, and other forms of remuneration.

For consulting firms, particularly those in industries with highly competitive labour markets, staying ahead of the curve in terms of pay equity and transparency will be essential. As firms adjust their compensation models to comply with new laws, they will also need to ensure they remain attractive to potential hires, particularly in an era where talent is at a premium.

Embracing Transparency, Strengthening Competitiveness

The EU's new Pay Transparency Directive marks a significant step toward reducing gender pay gaps and promoting fairness in compensation practices across industries. While these changes may pose challenges, they also provide an important opportunity for businesses to assess and refine their pay practices to ensure they are both competitive and compliant.

With full implementation set for 2027, companies will need to act quickly to ensure compliance and begin integrating the necessary changes. At Vencon Research, we are committed to helping consulting firms navigate these regulatory changes and build stronger, more equitable compensation structures. With a focus on providing detailed and relevant benchmarking data, we support our clients in maintaining compliance while ensuring they remain attractive employers in an increasingly transparent labour market. Through comprehensive, data-driven insights, businesses can confidently adapt to the new EU regulations and continue to foster an environment of fairness and competitive compensation.

At Vencon Research, we specialize in helping consulting firms adapt to regulatory shifts like the EU Pay Transparency Directive. Our detailed benchmarking data and HR expertise enable firms to build equitable and competitive compensation structures. Contact us today to stay ahead of the curve and demonstrate your commitment to fair pay practices.

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By Andy Klose - Associate Partner, Head of Advisory

Traditional single-track career and salary models often employ wide salary bands, which can lead to pay compression and employee dissatisfaction. In contrast, multi-track career and salary models offer a clear path for advancement and compensation, fostering motivation and transparency. This article explores the drawbacks of wide salary bands and the benefits of adopting multiple career tracks with defined salary increments.

The Problem with Wide Salary Bands

Wide salary bands within a single-track career model can create significant challenges for organizations and their employees. These bands are typically characterized by overlapping salary ranges that are often wider than the market average.

These wide salary bands can lead to several issues:

1. Pay compression and low pay hygiene: Wide salary bands result in pay compression, when salary increases over time do not adequately reflect differences in responsibilities, role, experience, or performance. This compression can cause high-performing employees to feel underappreciated and undervalued, leading to decreased motivation and loyalty. Moreover, the lack of clear pay hygiene — meaning transparent and fair salary structures — can result in dissatisfaction and disengagement.
2. Confusion and false expectations: The lack of clarity regarding pay increases and promotions often leads to confusion and false expectations. Employees may expect significant pay increases upon promotion, only to be disappointed by minimal adjustments. This can result in frustration and a sense of stagnation, particularly for high-performers who feel their efforts are not adequately recognized.
3. Sense of unfairness and demotivation: Employees may perceive the wide salary bands as unfair, especially if they see colleagues at the same career level (even if roles and performance may be different) earning significantly different salaries. This perception of unfairness can demotivate employees, reducing their productivity and commitment to the organization.
4. Lack of transparency and meritocracy: The single-track model frequently lacks transparency, as the pay grid is not shared with employees. This opacity allows for pay increases to be subject to discretion, leading to end-of-year negotiations that can descend to the level of haggling. Such practices undermine meritocracy, affecting employee motivation and loyalty.

Examples of Single-Track Model Issues

Theoretical potential vs. reality (1): In theory, an employee could move from the bottom of one salary range to the top of the next, a potential increase of approximately 250%. However, in reality, the company may offer just an 8% raise.

Discretion vs. planned pay advancement (2): A high-performer may expect to receive a 15% increase based on experience from previous promotions, while the company may prefer to offer just an 10% raise.

Frustration with pay disparities (3): Employees can become frustrated when they learn that colleagues at the same level are earning significantly more, e.g., with Base Salaries several times higher, especially if there is not much more differentiation than career level (e.g. to understand how roles may differ).

The Benefits of Multiple Career Tracks

In contrast to the single-track model, multi-track career and salary models offer a more structured and transparent approach to compensation. The multi-track model defines specific roles and levels within the organization, each with a set Base Salary or “spot value” along various distinct tracks.

Key advantages of the multi-track career and salary models include:

1. Clear pay development: For each track and level, Base Salary is clearly defined, with increases to the next levels outlined as specific percentages. This clarity creates a straightforward path for employees, allowing them to understand exactly what they need to achieve to advance.
2. Transparency and clarity: The pay grid in a multi-track model is typically transparent, providing employees with a clear understanding of their pay potential. This transparency eliminates confusion and sets realistic expectations for salary development.
3. Reduced need for negotiation: Since the company adheres to a set pay grid, there is little need for negotiation. Variance in compensation is based on KPI achievements and variable bonus pay-outs, which reflect performance differences and motivate high-achievers.
4. Focus on meritocracy: The model based on "spot values" promotes a meritocratic environment, as seen in many leading strategy consulting firms. Employees know what Base Salary to expect at the next career level, shifting their focus to achieving promotions rather than negotiating salaries.

Optimising Career Tracks

The transition from a single-track career and salary model with wide salary bands to a multi-track model with defined salary increments offers numerous benefits for both organizations and employees. By providing clear pathways for advancement and compensation, companies can foster motivation, transparency, and a meritocratic culture that attracts and retains top talent.

The multi-track model addresses the challenges posed by wide salary bands, creating an environment where employees are motivated to excel and achieve their career goals.

We are at your disposal for further questions and suggestions regarding how you optimally design career tracks (and/or remuneration systems) for your company.

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Andy Klose is an Associate Partner at Vencon Research International and heads the firm’s consulting unit.

Vencon Research International is a leading provider of compensation benchmarking and research as well as of compensation and performance-related consulting services for professional service firms, especially for audit and tax, management consulting, and IT services firms. Vencon Research International provides services to a full range of clients in more than 75 countries worldwide and is proud to name more than 85% of the world’s major consulting and/or professional services firm its clients.

Disclaimer: The example provided is simplified, and these are not suggestions but ideas. Any real-life application or implementation requires an in-depth analysis of the client’s circumstances, along with a custom-designed solution. Decisions regarding compensation models should be made with careful consideration of the organization’s specific needs and objectives.

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By Cara Solorzano - Business Development

Stay on pulse with HR trends in the consulting industry as our advisors share the latest insights and strategies gleaned from engagements with firms worldwide.

1. Budget considerations

Many consulting firms are being cautious with their company spending and HR budgets are not immune to imposed constraints. Such budget considerations seem to affect small to mid-size consulting firms more than larger and global players.

2. Both consulting firms and their clients err on the side of caution

Consulting firms are cautious due to a general sense of insecurity surrounding market stability, compounded by clients hesitant to embark on consulting projects, often delaying confirmation and constraining project size and scope in the name of “cost saving”.

3. Q1 offers promising talent in 2024

HR leaders tell us 2024 is offering up a rich pool of consulting talent in Q1. Hirers are excited about having options, something denied them for the past few years as outstanding talent seemed rare to find.

4. Candidate green demands

New hires are very focused on company sustainability and are questioning not only which “green” Employee Benefits a firm may offer, but also the company’s eco-friendly operating policies.

5. Office presence, on occasion

Many firms have cut their physical offices (one client cut 70% of physical locations) and are developing new strategies to maintain team spirit and social interaction. One has endeavored to build “chit chat” culture into video comms: “setting up calls can be daunting, so we are starting to call employees outside of fixed meeting times to simply say hello and have a cup of coffee, like we would in the office”. Another firm that sees a majority of work done remotely has recognized that many younger employees are still keen to come into the office due to their living situations (shared flats or smaller apartments), or simply the desire for more “in-person” connection, and has set up a system allowing consultants to book the times they intend to spend in the office, where space may otherwise be limited.

6. No office, no oversight?

Many consulting firms are concerned about employee output, especially in the context of increased remote work. One client informed us that managers have created a due diligence system to account for employees’ timelines. If an employee is falling behind their quotas they set up one-on-ones and set appointments to review both prioritization and strategy on accomplishing both goals and tasks.

As a trusted HR partner for the consulting industry, Vencon Research is here to help you unlock the full potential of your team. Contact us to learn more about how we can support your HR needs and drive success for your business.

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By Andy Klose - Associate Partner

The rise of remote work after the COVID-19 pandemic has led to discussions among consulting firms about how to adjust pay for remote employees. This article explores the complexities of compensation strategies for remote work, including different pay models, remote work policies, and long-term perspectives within the consulting industry.

Exploring Pay Strategies

The question of whether consulting companies employ different pay strategies for their remote employees is a common one. To address this, we must first consider the various pay strategies employed by consulting firms (there are other as well as hybrid strategies in place):

1. Employee location-based pay: In this approach, companies adjust salaries based on the cost of living in the employee’s location (which often applies also to remote employees). This ensures equitable compensation, with higher salaries in high-cost areas such as San Francisco.
2. Office location-based pay: Some companies base employee salaries on the location of their offices, considering the local cost of labour which is not only driven by cost of living but also by talent supply and demand.
3. Country-based Pay: Another strategy is to set salaries based on a national average or maintain consistent pay across all locations in the country. While straightforward to implement and to maintain consistency across the organization, this approach may not account for regional cost-of-living differences.

Given these pay strategies, companies with employee location-based pay strategies are less likely to differentiate pay for remote employees. Conversely, those with office location-based or country-based pay strategies may be more inclined to do so.

Remote Work Policies

Furthermore, the diversity of remote work policies further complicates the issue (there are other as well as hybrid policies in place):

1. Fully remote: Some companies allow employees to work entirely remotely.
2. Hybrid remote: Many companies offer a blend, where employees work remotely part-time and attend office meetings or collaborations as needed.
3. Remote-friendly: Others permit remote work on an as-needed basis or with managerial approval.

Therefore, companies that have fully remote or hybrid remote work policies are less likely to differentiate pay for remote employees. This means that companies with remote-friendly policies seem to be more likely to consider different pay to their remote employees.

Long-Term View on Remote Work Policies

Additionally, consulting companies’ long-term view on remote work policies vary:

1. For remote work: Advocating for remote work indefinitely, some firms commit to embracing its advantages.
2. Against remote work: Conversely, other companies aim to return to pre-pandemic office norms, underscoring e.g. the value of in-person interactions.
3. Undecided: Certain companies are struggling with the decision of whether to continue remote work or return to the office. They recognize the challenges of reversing current remote work trends or are unsure about the potential benefits, such as increased efficiency.

Only firms in the first category, which are for remote work, are likely to consider pay differences for their remote employees. The other two groups are less likely to do so due to a possible transition.

Conclusion

All in all, most consulting companies remain hesitant to implement different pay strategies for their remote employees due to strategic and ethical considerations:

1. Strategic considerations: Companies typically choose office locations strategically, independent of individual employee locations, to achieve business metrics like revenue and margin. Thus, business outcomes remain unaffected by remote work. For example: A consulting company will charge the same billing rate to a bank in Manhattan regardless whether the consultant will be working in the New York office or remotely.
2. Misusing financial leverage: Paying remote employees less could be seen as an attempt to force them to return to the office. Transparent communication about the reasons for this request would be more effective.
3. Efficiency evidence: There is little or conflicting evidence (depending on the sources) that a full return to the office improves long-term employee efficiency.

In summary, creating suitable payment strategies for remote work requires thoughtful consideration and customised solutions. If you and your team require assistance, we are ready to provide support and expertise. Our aim is to ensure that your compensation approach aligns with your organisational goals while promoting fairness, engagement, employee satisfaction, and productivity.

Andy Klose is an Associate Partner at Vencon Research International and heads the company’s consulting unit.

Vencon Research International is a leading provider of compensation benchmarking and research as well as of compensation and performance-related consulting services for professional service firms, especially for audit and tax, management consulting, and IT services firms. Vencon Research International provides services to a full range of clients in more than 75 countries worldwide and is proud to name more than 85% of the world’s major consulting and/or professional services firm its clients.

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