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By: Gonzalo André Lavin Alfaro – Business Development Associate

The persistent issue of hyperinflation and currency devaluation in many countries has led consulting companies to adopt new strategies to retain their talent and remain competitive.

Here, we briefly cover various measures taken by leading management consulting firms to alleviate the pressures faced by their employees, including regular increases in base salaries and bonuses, one-off payments adjusted for inflation, and the option of pegging salaries to another currency.

Over the past year, Vencon Research has launched Pulse Surveys in heavily affected countries such as Argentina and Turkey to explore the actions taken by leading management consulting firms in response to the challenges of managing compensation in times of hyperinflation. Our analysis of the resulting data revealed that several responses were commonly considered by participating firms:

· The most common approach was to regularly (often quarterly or even monthly) review and increase Base Salary in order to align income with a depreciating currency.

· This was followed by regularly (again, often quarterly or even monthly) increasing bonuses and/or other variable income.

· Other firms opted to offer "one-off" payments adjusted for inflation. These seem to be offered semi-annually.

· It is noteworthy to mention that only a few firms considered pegging salaries to another currency with an equivalent value, such as the US dollar, to be an acceptable alternative. This option was most commonly considered by large, internationally-based, pure strategy firms. Nonetheless, given that there is little expectation of significant improvement in the short term in many of the countries mentioned, this may be an option that is considered more widely in the near future.

Summaries of our inflation-related surveys for Argentina and Turkey are available on our website here:

Argentina

‍Turkey

Should you want to us to present and further discuss our findings and/or want us to assist you with a review of your strategies to deal with hyperinflation, please do not hesitate to reach out to me at Vencon Research.

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Vencon Research’s 2022 Pulse Survey provides an insight into the effects of currency devaluation and inflationary pressures in Turkey. The survey results highlight the challenges faced by firms in Turkey in retaining their employees, and the measures they are taking to address the financial hardship faced by their employees.

1.  CHALLENGES IN RETAINING EMPLOYEES

The study revealed that firms in Turkey are facing challenges in retaining employees, with a significant increase in voluntary attrition. As a result, 67% of firms surveyed have increased their hiring efforts. Despite this, half of the firms reported that their employees are experiencing financial hardship.

2.  RESPONSES FROM CONSULTING FIRMS

To address the issue, all firms reported adjusting their compensation structure in the last 12 months, with 67% of them attributing this to both inflation and currency devaluation.

The adjustments were made for all types of employment contracts, with two-thirds of firms adjusting based on job role, function, and/or career level.

Measures taken to combat inflation and currency devaluation included increasing base salary, offering one-off or multiple payments, and increasing bonus/variable pay. Interestingly, only 17% of firms used "pegging" of compensation to a foreign currency.

3.  DRIVERS OF COMPENSATION DECISIONS

The most critical factors driving compensation were the cost of labour and inflation, with other contributing factors including cost of living expenses, fluctuations in exchange rates, and attrition rates.

About 50%of the firms were unable to make predictions about the anticipated situation in the next 12 months in Turkey. However, most firms are planning to make changes to their compensation model in the coming year.

Half of the firms plan to raise the base salary by over 20%, one-fourth plans to boost the bonus by 20%, and another quarter plans to raise the bonus by 11% to 20%.

4.  INDUSTRY REMAINS PROACTIVE

In conclusion, the survey shows that businesses in Turkey are taking proactive measures to retain employees and address their financial hardship in light of inflation and currency devaluation. It also highlights the need for firms to review their compensation structure more frequently than the typical once-per-year review, and plan changes to address the challenges of inflation and currency devaluation.

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Should you have any further questions or would like to receive more detailed information on this topic, please reach out to us at info@venconresearch.com

By:
‍Hilmar Albers – Partner
Erwin Harbauer - Managing Partner

In parallel to the positive momentum witnessed in the country’s economic growth, forecasts indicate that Japan is expected to experience a long-awaited boost in wages. However, Japanese consultants can only look forward to a marginal offsetting of the cost of living pressures experienced in the country.

Domestic demand is a major driver of the Japanese economy. Unfortunately, consumer demand had subdued after a decade of ‘Abenomics’ with only disappointing growth in workers’ earnings, compounded by record inflation during QIV of 2022 and culminating in a 41-year-high rate of inflation of 4.3%¹ in January 2023.

While Japanese inflation remains relatively modest compared to the US or the Eurozone, these levels represent a radical shift for an economy that has experienced decades of ultra-low inflation.

Now, despite famously stagnant salaries, Japanese industry has reacted and wage increases are finally on the cards across all sectors. Open source market analyses predict an average hike in salaries of 2.8% (with estimates ranging from 2.5% to 3.4%)².

When also taking the re-opening of the country's borders to foreign visitors since October 2022 into account, we expect such wage increases to spur domestic demand and further stimulate economic activity. We therefore believe that the outlook for the remainder of 2023 is relatively positive for the Japanese economy.

Furthermore, Vencon Research’s survey data shows that the consulting industry is not excluded here and many of our clients have signalled growing order books. However, although consulting firms are also increasing salaries, the expected increases are far from those being offered by the country’s other industries, and average only 1.4%³ across career levels.

Many firms have also planned different levels of increases across their career grades, with a greater concentration on the lower career levels and less relative growth being offered to the more senior Management and Principal levels.

Since consultants already count as high-earners in Japan (as well as in most other countries worldwide), the lower expected salary growth percentages may be less surprising.

On the whole, while the consulting sector itself can hope to profit from a general uptick in economic conditions, Japanese consultants can only look forward to a marginal offsetting of the cost of living pressures experienced by the country.

For more information on this topic or on how you may successfully respond to the issues raised in this article, please contact Vencon Research – as always, we are happy to assist you.

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_{[1] https://tradingeconomics.com/japan/inflation-cpi;}

_{[2] Various inflation forecasting and research firms, incl. Japan Economic Research Center, Kienbaum, Korn Ferry Hay Group, Willis Towers Watson}

_{[3] Vencon Research analysis; Client feedback}

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PULSE SURVEY: ARGENTINA’S INFLATION AND HR PRACTICES AT CONSULTING FIRMS

Vencon Research’s 2022 Pulse Survey provides an insight into the effects of currency devaluation and inflationary pressures in Argentina. The survey results highlight the challenges faced by firms in Argentina in retaining their employees, and the measures they are taking to address the financial hardship faced by their employees.

1.  HIRING RAMPED UP IN RESPONSE TO INCREASING ATTRITION

 43% of firms reported experiencing an increase in voluntary attrition, which led to a higher rate of hiring to fill vacancies. While this is a concern, it’s reassuring to see that firms are proactively responding to this trend by increasing their hiring efforts.

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2.  RESPONSES FROM CONSULTING FIRMS

A significant majority of the respondents, 57%, reported that their employees are currently facing financial hardship due to inflation and/or currency devaluation. This is a worrying trend, but firms are taking steps to mitigate this issue with all of the firms surveyed adjusting compensation and/or extra payments in the last 12 months. An increase in base salary was the most popular measure taken to adjust compensation (29% of respondents). Additional payments(14%) and an increase in bonus/variable pay (14%) were also popular choices.

3.  DRIVERS OF COMPENSATION DECISIONS

The key influential factors “driving” compensation were identified as inflation (86%),cost of labour (29%), fluctuations in exchange rates (14%), and a rise in the cost of living expenses (14%).

It appears that a significant proportion of respondents (approximately 43%) were unable to make predictions regarding the anticipated situation in the next 12 months in Argentina. Despite this uncertainty, most firms are planning changes to their current compensation model in the coming 12 months, with all proposing to raise the base salary by over 20% and also boost the bonus by 20%.

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4.  REGULAR COMPENSATION REVIEWS ARE ESSENTIAL

Vencon Research’s 2022 “Pulse Survey” highlights the challenges that companies in Argentina face due to inflation and currency devaluation. While the results indicate a worrying trend of financial hardship among employees and an increase in voluntary attrition, the survey also highlights that firms are taking proactive measures to address these issues. With most firms planning to change their current compensation model in the coming 12 months, it’s clear that companies in Argentina need to regularly review and adjust their compensation offerings to mitigate the effects of inflation and currency devaluation.

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Should you have any further questions or would like to receive more detailed information on this topic, please reach out to us at info@venconresearch.com.

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By Yao Tang - Business Development Manager

In recent discussions with consulting firms in the U.S., one recurring theme has been job hugging: employees remaining in their current roles longer than usual, not necessarily due to engagement or satisfaction, but because external opportunities appear limited or uncertain.

From a Total Rewards standpoint, this trend carries several implications:

• Lower turnover may give an incomplete picture of workforce stability.
• Firms with slower salary progression or career advancement may face sharper attrition once mobility returns.
• Reviewing competitiveness now can prevent costly corrections later.

What Is “Job Hugging”?

Job hugging refers to employees choosing to stay put — often despite feeling underutilised or dissatisfied — rather than pursuing external opportunities. It represents a reversal of the “job hopping” behaviour that characterised much of the post-pandemic period.

Why It’s Emerging

Several factors are contributing to this shift:

• Economic uncertainty and layoff activity: Employees are more risk-averse and value job security.
• Perceived scarcity of external opportunities: A cooling labour market has reduced hiring across sectors.
• Relative comfort: If pay and benefits are broadly competitive, employees may see limited incentive to move.

Implications for Consulting Firms

1. Low Turnover Can Mask Underlying Risk

U.S. quit rates have fallen to around 2% per month (compared with roughly 3% during the peak of the “Great Resignation,” according to the Bureau of Labor Statistics). On the surface, this appears positive — but reduced movement may reflect caution rather than commitment.

When hiring activity picks up again, turnover could accelerate sharply, particularly among high performers who have postponed their next move.

Key point: Low attrition during periods of uncertainty should not be interpreted as loyalty. Job hugging is a temporary pause, not a sign of long-term satisfaction.

2. Slower Career and Pay Progression Amplify Future Attrition

Career growth remains a defining factor for consulting talent. If internal progression is noticeably slower than market norms — for example, where promotion steps take several years longer or salary growth at promotion is smaller — frustration can accumulate even during periods of low mobility.

When external opportunities re-emerge, those who feel “stuck” are often the first to leave.

Key point: Firms with below-market progression structures risk concentrated attrition once confidence returns to the labour market.

3. Proactive Benchmarking Reduces Future Costs

The last period of rapid mobility (2021–2022) showed how quickly pay structures can come under pressure. Firms that had not reviewed salary levels in advance often needed substantial market corrections to retain staff.

Regular benchmarking helps identify misalignments early and allows for phased, measured adjustments — avoiding sudden, reactive pay increases later.

Key point: Periodic benchmarking is not simply about keeping pace; it’s about maintaining readiness when market dynamics change.

Staying Prepared

Vencon Research works with consulting firms across markets, using directly collected and regularly updated compensation data from entry level through senior roles. This provides firms with a clear view of how their salary structures compare today — and how they may need to evolve as market conditions shift.

Accurate benchmarking is ultimately about preparedness. Understanding where you stand now ensures you’re ready when job hugging transitions back into job hopping.

Vencon Research is the largest player in the field of consulting compensation metrics. Our client list includes 85 per cent of the world’s major management consulting firms and we have over 20 years of experience and data at our fingertips. To find out more about our benchmarking products and services, visit our website or get in touch with our team.

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By Osas Ohenhen - Business Development Manager

Benchmarking compensation accurately starts with identifying the right peer group—and in consulting, that also means matching by line of business (LoB).

Many firms operate across multiple LoBs, from strategy to IT implementation to risk advisory. Each of these business lines serves different markets, demands different skill sets, and carries different compensation expectations.

Comparing roles across unrelated LoBs—whether within your own firm or externally—introduces distortions. A senior consultant in digital transformation doesn’t operate under the same market pressures or salary expectations as a peer in commercial due diligence. Yet we frequently see data misused in exactly that way.

One Firm, Multiple Realities

Consulting firms are rarely single-specialty. Even smaller firms may offer services across several distinct areas. Larger firms might have a dozen LoBs under one umbrella. Treating them as one homogenous group for compensation purposes obscures important differences.

Take two examples:

• A consultant in IT Risk & Cybersecurity (ITR) is likely to have a specialized technical background and face strong competition from both consulting and non-consulting employers. Compensation must reflect that scarcity.
• Meanwhile, a peer in Operations-Based Management Consulting (OPO) might face a more traditional consulting talent market, with different leverage models and client fee structures shaping pay expectations.

Even within broadly defined domains like IT or Finance, sub-lines matter. IT Strategy, IT Infrastructure, and Enterprise Software Implementation differ in project focus, required experience, and salary bands.

The Scope of LoBs

Vencon Research tracks more than 35 distinct lines of business in our compensation benchmarking—offering granular, role-by-role data within each. This includes well-established categories and fast-evolving specialties:

• Strategy Consulting Firms
• Operations-Based Management Consulting
• Digital Strategy and Transformation
• AI Consulting
• Commercial Due Diligence
• Restructuring and Turnaround
• Cybersecurity Consulting
• Tax, Transfer Pricing, and Assurance Services
• Actuarial, Legal, and Government Consulting
• ...and many more.

This breadth ensures that benchmarking is never reduced to broad categories like “Consulting” or “IT Services.” Instead, we ensure each job is matched to its correct peer group—based on functional focus, project type, and market conditions.

Why It Matters

HR leaders rely on benchmarking to set competitive pay, manage internal equity, and guide offer negotiations. But those decisions are only as sound as the underlying comparisons. Without alignment to the correct LoB, even the most robust benchmarking data can lead you off course.

At Vencon Research, accurate benchmarking—within clearly defined lines of business—isn’t an extra. It’s a pillar of our methodology. We work closely with clients to ensure each role is benchmarked where it belongs, across a peer group that reflects both the function and the market.

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