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By Yao Tang - Business Development

In the wake of the widely discussed "great resignation" phenomenon in the United States, a similar trend, albeit less dramatic, has been observed among our clients in Australia. In the course of discussions with HR professionals we’ve heard one theme repeat itself:

Despite not experiencing an extraordinary surge in resignations, there's a palpable sense of burnout, characterized by extreme fatigue and mental exhaustion, among workers, which has resulted in decreased productivity, increased absenteeism, and resistance towards returning to the office post-COVID-19.

To delve deeper into this concerning trend, researchers from The University of Melbourne conducted a comprehensive study in 2022. Surveying 1,400 employed Australians, the study aimed to assess their well-being and work experiences two years after the onset of the pandemic. Regrettably, the findings paint a less-than-ideal picture, emphasizing the widespread symptoms of burnout among workers.

The Burnout Landscape in Australia and Beyond

Burnout is not exclusive to Australia; it's a global concern with serious implications for individuals' health, well-being, and productivity. The consulting industry, a historically demanding sector worldwide, is not immune to this challenge. Several factors contribute to burnout in this industry:

• High Workload: Consultants often grapple with demanding client projects, tight deadlines, and extended working hours, creating an intense pressure to deliver results.
• Travel Requirements: Frequent travel, a common aspect of some consulting roles, leads to physical and emotional exhaustion, posing challenges for those spending extended periods away from home and family.
• Client Expectations: The industry places high expectations on consultants to meet client demands and deliver valuable insights. Balancing these expectations with personal well-being is an ongoing challenge.
• Variability in Workload: Consulting work is inherently cyclical, with periods of intense activity followed by relative calm. This variability can result in irregular working hours and heightened stress.
• Project-Based Nature: Constant adaptation to new teams and clients, a characteristic of project-based work, can be mentally taxing for consultants.
• Remote Work Challenges: The shift towards more remote work and virtual engagements due to the COVID-19 pandemic introduces new challenges related to work-life balance and feelings of isolation.

Addressing Burnout: Solutions for Individuals and Organizations

In the Australian context the issue has been recognised by government, which has implemented various mental health initiatives and programs to address burnout and improve access to mental health care. However, consulting firms, being on the frontline of this issue, shouldn’t wait for government solutions.

Tackling burnout requires a collective effort from both individuals and organizations. Individuals are encouraged to prioritize self-care, set boundaries, manage stress, and seek support when needed. Organizations, on the other hand, play a pivotal role in promoting a healthy work environment. This includes encouraging breaks, offering flexible work arrangements, and providing mental health resources and support.

Concrete steps include:

• Workload Management: Firms can assess and manage consultants' workloads to prevent overburdening. This might involve adjusting project assignments and schedules.
• Mentorship and Support: Provide mentorship and support systems for junior consultants, helping them navigate the challenges of the industry and manage stress.
• Flexible Work Arrangements: Offer flexible work arrangements, including remote work options, to help consultants achieve a better work-life balance.
• Training and Resources: Provide training on stress management, resilience, and mental health awareness. Offer access to mental health resources and counselling services.
• Regular Feedback: Encourage regular feedback between consultants and their managers to address concerns and identify early signs of burnout.
• Promote a Healthy Culture: Foster a culture that values work-life balance, self-care, and well-being. Lead by example from the top down.
• Diverse Project Assignments: Rotate consultants through different types of projects to keep work engaging and prevent monotony.
• Mental health awareness: This should be a priority for employers and society at large, with ongoing efforts to reduce stigma and encourage open conversations about burnout. Employee Assistance Programs (EAPs) can offer confidential counselling and support services to those experiencing stress and burnout.

It's worth noting that addressing burnout is not only the responsibility of consulting firms but also requires individual consultants to take proactive steps to manage their well-being and communicate their needs effectively.

Burnout in the consulting industry can be a complex issue, but with awareness and proactive measures, it is possible to mitigate its impact and promote a healthier work environment. Nevertheless, as we saw with our Australian contacts in the HR departments of consulting firms, it was their awareness, identification and concern to address the issue that lead to launching effective mitigation programmes and improvements for all concerned.

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Tailored Collaboration for Success

Vencon Research is your collaborative partner in navigating the complexities of HR management in the consulting industry. Our bespoke recommendations are crafted with your unique needs in mind, ensuring local relevance and global consistency. Contact Vencon Research today to discover HR solutions for your company's success in the global consulting arena.

References

Leah, R., Brendan, C., &David, B. (2023, March 19). The 'great resignation' didn't happen in Australia, but the 'great burnout' did. Find an Expert.unimelb.edu.au. https://findanexpert.unimelb.edu.au/news/63392-the-'great-resignation'-didn't-happen-in-australia--but-the-'great-burnout'-did

Sarah, S. (2023, April 14). The Great Burnout: Exhausted Aussie workers forced into ‘quiet quitting’ and resignations. News.com.au. https://www.news.com.au/finance/work/at-work/the-great-burnout-exhausted-aussie-workers-forced-into-quiet-quitting-and-resignations/news-story/21a83bd5cd14458306469423f10d4585

Steve, H, Tim, C., &Mackenzi, G. (2023, May 4). Seven strategies to avoid employee burnout Prioritizing employee well-being in the workplace. Deloitte. Com https://www2.deloitte.com/us/en/blog/human-capital-blog/2023/how-to-avoid-employee-burnout.html

By Yao Tang – Business Development

In the world of consulting, staying competitive means possessing the necessary skills to offer innovative and effective solutions to clients’ problems. These competencies, often referred to as “hot skills”, are continually evolving, with new skills consistently taking centre stage.

Hot skills can vary over time as technology and industry trends change, but they typically represent expertise in areas that are currently experiencing rapid growth, innovation, or a shortage of qualified professionals. Current examples include machine learning, cloud computing, blockchain, cybersecurity, and specific programming languages such as Python, Ruby, JavaScript and others. Hot skills can also extend beyond technical skills and include skills related to management consulting, strategy development, industry-specific knowledge, and more - depending on the specific focus of the consulting firm and the needs of their client base.

Consulting firms seek professionals with these skills because they are essential for delivering services to clients looking to adopt or optimize new technologies or approaches in their business operations.

Hot skill-based compensation

In order to attract and retain professionals with these in-demand skills, consulting firms often find they need to adjust their compensation and talent acquisition strategies. Doing so, they are seeking to address a number of issues:

1. Skill Shortages: Paying a premium for hot skills attracts professionals possessing these skills, combating skill shortages in particular areas.
2. Competition for Talent: Offering competitive compensation for hot skills sets the firm apart in the competitive talent market, making it more appealing to top candidates.
3. Client Demands: Hot skills enable consultants to meet clients' evolving needs efficiently and with expertise, enhancing client satisfaction and trust.
4. Retention and Motivation: Paying a premium motivates employees to acquire and maintain hot skills, reducing turnover and preserving institutional knowledge.
5. Market Rate Alignment: Aligning salaries with market rates ensures the firm can secure and retain skilled professionals, staying competitive in talent acquisition.
6. Efficiency and Effectiveness: Hot skills lead to more efficient project execution and higher-quality outcomes, enhancing the firm's effectiveness in delivering value to clients.
7. Strategic Business Goals: Investing in hot skills aligns the firm's workforce with its strategic objectives, enabling it to tackle specialized projects effectively.
8. Talent Pipeline: Attracting individuals with hot skills helps build a talent pipeline of skilled professionals ready to contribute to ongoing and future projects.
9. Client Trust: Demonstrating expertise in hot skills instils confidence in clients, fostering trust and long-term relationships based on the firm's ability to deliver on their needs.

While an increase in compensation is the obvious way to attract and retain candidates with particular hot skills, exactly how such adjustments are introduced and managed may vary from one firm to another.

Our market analysis reveals three main approaches to hot skill compensation among consulting and IT firms:

Group 1:

Firms offering broad salary bands that encompass higher pay for a particular hot skill.

This is the largest group among the firms we looked at or spoke to in our analysis. The adjustment is reflected in a wider, albeit existing, salary range for the position in question.

As such the adjusted hot skill-based salary does not necessitate a change in the salary ranges being offered by the firm because the hot skill premium is within the existing salary range; it only increases the average salaries being paid.

Interestingly, the majority of this group of firms offered their hot skills-based employees a fixed increase in salary. Should the skill go from hot to “vanilla”, i.e. no longer cutting edge or exceptional, or if the employee were not working on a project requiring this hot skill, their salary was not adjusted (i.e. downwards).

Group 2:

Firms paying or adjusting salaries only for the hot skill in question.

In this model, only employees with the respective hot skill are offered a higher salary – outside of the firm’s existing salary range.

Again, the majority of this group of firms offered their hot skills-based employees a fixed increase in salary. Should the skill go from hot to “vanilla”, or if the employee were not working on a project requiring this hot skill, their salary was not adjusted (i.e. downwards).

Group 3:

Firms that pay a hot skills bonus or additional component.

This group offers an additional bonus or salary component to employees who can demonstrate that they possess a desired skill (e.g. via a certificate or diploma or otherwise). This additional income functions in a similar way to a bonus and can be discounted should the hot skill become “vanilla”, or as in the case of some firms, when the employee is not working a case or project that requires the hot skill in question.

The cooling effect

As our clients have frequently noted, the hot skill of today may become vanilla tomorrow. This is why the strategy of Group 3 is often the most efficient from a firm perspective. It is clear that HR managers at consulting firms may not be able to hire the talent they require without offering the premium required by the market. However, with this approach the skill is paid for only when it is in use.

It is up to firms to decide which approach is best suited to their business and perform a balanced assessment of the effects of each approach on their goals, considering firm competitiveness, profitability, talent acquisition and retention.

In our forthcoming article, we will further explore the intriguing relationship between hot skills and their influence on consultant compensation, delving into the finer details of how these hot skills are factored into our benchmarking assessments here at Vencon Research.

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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By Miklos Bodnar - Business Development Senior Manager

Internal consulting practices (ICPs) have become a more common feature of the global consulting and professional services sector and present their own set of challenges and opportunities for Human Resources leaders at traditional consulting firms as they compete with ICPs for talent acquisition.

Internal Consulting Practices (ICPs)

An internal consulting practice is an in-house group established by an existing firm to provide support and assistance with making critical strategy and operational decisions. The primary impetus in creating such practices is to reduce the reliance on traditional, external consulting firms, such as McKinsey, Bain, BCG, Kearney, Big 4, Accenture, etc., as well as associated costs, while also hoping to increase the efficiency and availability of consulting services. The advantages of an in-house consulting group include a more comprehensive understanding of a firm's structure, greater availability and responsiveness for problem-solving, involvement in both strategy and implementation, and greater alignment with the client.

Some examples of major firms with internal consulting practices are: Airbus, AMEX, Disney, Google, Siemens, Ford, General Motors.

How should human resource leaders anticipate and prepare for competition with ICPs?

The most obvious challenge presented to HR leaders at traditional consulting firms is the competition for top level consulting talent, especially in a recruitment market that is already under external pressures from non-consulting industries.

While ICPs do expand the number of competitors for talent, traditional consulting companies still generally hold an advantage in many areas of employment attractiveness, and should play to these strengths. Some key factors to consider are:

ICPs may offer different/less advantageous career advancement: ICPs can be limited in their ability to expand their service offering and client base, thus capping the needed for increased staffing and partners. This inherently smaller structure could constrain career advancement and thus attractiveness.

Opportunity for travel (when desirable): As ICPs are most likely co-located with the parent firm and primarily work only for the single “client” on-site, no additional travel outside of the consultant’s primary home base is required. While some may appreciate not having to travel, there are also consultants who consider frequent travel opportunities to be an advantage associated with the sector.

ICPs may offer less exposure to different industries and projects: Consulting with an ICP may provide an extremely focused work environment, where the consultant-client interaction is far more comprehensive and the consultant has access to the parent company on a daily basis. However, this very focus can also lead to a lack of variety in the consulting work carried out. And while specialization may be a key driver in a consultant’s career, this in turn may be limited, as the consulting opportunities and problem solving will only be within the parent company’s specific industry and business focus.

Open market opportunities could be less “competitive” as a consultant has only worked for a specific client and industry: The potential limitations outlined above also play out for candidates who may consider how to maximise their future employability. A lack of exposure to different industries and types of consulting work could diminish their competitiveness vis-à-vis peers who have experience at traditional consulting firms.

The case for ICPs

As businesses become more complex and competitive, there is a growing need for customized and specialized consulting solutions that internal consulting teams are well-positioned to deliver. Working for an ICP can offer consultants greater job security, the opportunity to build long-term relationships with stakeholders, and the ability to make a more significant impact on the organization. Internal consulting practices may also be perceived to offer more work-life balance and a more predictable schedule compared to traditional consulting companies, making them an attractive option for consultants looking for a more stable career path.

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What can Vencon Research do for you?

Vencon Research has recognized the growing and impactful presence of Internal Consulting Practices in the larger consulting industry and has integrated these firms into our compensation benchmarking analysis and services. Should your firm require assistance identifying the appropriate strategies to ensure your own rewards and recruitment attraction fully takes this aspect of the consulting market into account, we are available to provide you with the solutions to succeed.

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Despite robust earnings in the consulting industry in 2022 and a mostly strong final quarter of 2022, consulting companies are either experiencing a slowdown after just two months into 2023 or have already started adjusting to an expected slowdown in the project pipeline for this year.

Due to the recent COVID-19 pandemic, the consulting industry has been able to reduce operational costs (e.g., less travel, etc). But what puts additional pressure on margins is that many consulting companies have increased salaries due to above average inflation rates around the globe while billing rates were not (or could not) be increased accordingly.

These factors have compelled consulting companies to re-examine their cost position, e.g. by re-examining their fixed costs, in particular evaluating the value brought by their non-client facing staff.

In the light of this, for industry insiders it is no surprise that e.g. McKinsey is announced cutting 2,000 non-client facing staff, KPMG is laying off up to 700 employees in the USA and 200 in Australia, and EY is planning to cut 400 staff in Germany.

The priorities of consulting companies are now – apart from trying to ensure their consultants remain highly utilised – being set to more strongly focusing on increasing profitability and competitiveness (instead of sheer growth).

For more information on how your competitors are responding or how you may successfully respond to these challenges, please contact Vencon Research – as always, we are happy to assist you.

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Analysis by Irina Kvirikadze - Rewards Intelligence & Insights

Research findings from Vencon Research indicate that salary increases in 2026 are expected to be more moderate compared with the high-inflation years of the recent past.

Organizations across the consulting industry are adjusting compensation strategies in response to easing inflation, ongoing economic uncertainty, and structural changes in workforce management such as AI-driven automation. Rather than broad base-salary increases, employers are increasingly emphasizing variable pay, promotion-driven adjustments, and holistic total rewards offerings.

Globally, average salary increases in the consulting industry are projected at 3.7% in 2026, while inflation is expected to stand at 2.4%. This represents a clear slowdown compared with 2025, when salary growth was projected at 4.5%, reflecting a more cautious and targeted approach to pay management.

Regionally, the APAC region expects the highest salary increases, at 4.2%, while Europe is likely to see comparatively lower increases at 3.2%. Expected Inflation rates are highest across the Americas at 2.8%.

Expected Salary Growth: Europe

In Europe, salary increases are expected to range from 1.8% to 6%, broadly aligned with inflation levels that vary significantly by country. Core markets such as Germany, France, Spain, and the United Kingdom are projected to see moderate increases between 2.7% and 3.2%, while higher growth is anticipated in parts of Central and Eastern Europe, particularly Hungary and Romania, where inflationary pressures remain elevated.

Expected Salary Growth: Americas

Across the Americas, average salary increases in 2026 are projected at 3.9%. Latin America continues to outpace North America, led by Colombia, Mexico, and Brazil, while salary growth in the United States and Canada is expected to remain moderate at just above 3%. Argentina has been excluded from regional averages due to ongoing inflation volatility.

Expected Salary Growth: APAC and MENA

In APAC, salary growth is expected to remain robust and broadly in line with 2025 levels, ranging from 2.7% to 8.2%. India continues to stand out as the strongest growth market globally.

In the Middle East and Africa, salary increases are projected to soften compared with last year, with most major markets clustering around the low-to-mid 3% range.

Overall, the 2026 outlook points to a return to more normalized salary growth, with employers prioritizing flexibility, performance differentiation, and total rewards optimization over uniform pay increases.

Vencon Research provides consulting firms with precise, industry-specific compensation benchmarking, ensuring they stay competitive in a rapidly evolving market. Our research includes further detailed insights into salary increases for 2025 by country, line of business, and career level, helping firms understand pay trends and make informed compensation decisions.

Learn more about how Vencon Research can support your firm’s pay strategy.

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As consulting firms plan for 2026, HR leaders face a complex set of pressures. Economic uncertainty, regulatory change, persistent talent shortages and the practical integration of AI are all influencing how consulting firms design roles, manage costs and develop their people.

These challenges are cumulative rather than isolated. Pay and progression decisions are more transparent, workforce models are more varied, and expectations around productivity and performance continue to rise. HR strategy in consulting is increasingly central to sustaining competitiveness and executing business models.

Drawing on Vencon Research’s work with consulting firms globally, alongside selected external research, the following HR trends outline how people strategy in the consulting industry is evolving heading into 2026.

1. Pay Transparency and Regulation as Core HR Priorities in Consulting

Pay transparency is now a central consideration for consulting firms. Regulatory developments, including the EU Pay Transparency Directive and similar initiatives elsewhere, are accelerating the need for clearer pay structures, defined ranges and consistent progression criteria.

In practice, this places pressure on job architecture, levelling and job matching. Vencon Research frequently observes that transparency initiatives expose inconsistencies in role definitions that were previously less visible. For consulting firms operating across multiple geographies, aligning local practices with global frameworks adds further complexity.

As a result, pay transparency is shaping not only reward strategy, but also governance, communication and trust.

2. Workforce Planning in a Low-Growth, High-Volatility Consulting Market

Many consulting firms are entering 2026 with more cautious growth assumptions. Demand remains uneven across sectors and geographies, while cost discipline has become a sustained priority rather than a temporary response.

HR functions are placing greater emphasis on flexible workforce planning, redeployment and internal mobility. Hiring decisions are increasingly guided by near-term demand signals rather than long-range growth forecasts. Vencon Research sees firms investing more time in aligning capacity, skills and cost structures across practices.

Workforce planning is becoming a continuous, data-driven process rather than an annual exercise.

3. AI as a General-Purpose Capability in Consulting Firms

AI is increasingly embedded across consulting roles, grades and practices. By 2026, consultants are expected to use AI-enabled tools for research, analysis, drafting and insight generation as a standard part of their work.

This has implications for HR. Role profiles now assume baseline AI literacy, with differentiation driven by judgment, problem framing and client interaction rather than task execution. Vencon Research observes early incorporation of AI expectations into capability frameworks and performance evaluations.

AI is reshaping what effective consulting work looks like, even where job titles remain unchanged.

4. Evolving Consulting Operating Models Beyond the Pyramid

The traditional consulting pyramid is being supplemented by more diverse talent models. Core consultants increasingly work alongside subject-matter experts, delivery centres, contractors and alliance partners.

This evolution reflects both cost pressures and the growing need for specialised skills. However, it introduces challenges around performance management, engagement and equity. HR processes designed for homogeneous populations are being adapted to support differentiated talent segments without undermining cohesion.

Consulting firms are moving towards more modular and flexible operating models.

5. Rethinking Reward Beyond Utilisation and Billable Hours

Utilisation remains a critical metric in consulting, but it is no longer sufficient alone. As firms invest in intellectual property, platforms and reusable assets, they are exploring ways to recognise non-billable but value-creating contributions.

Vencon Research’s compensation benchmarking shows increasing variation in how firms reward asset development, reuse and broader client outcomes. These changes raise questions around measurement, attribution and fairness, particularly in team-based environments.

Reward strategy is becoming more closely tied to how firms create value, not just how hours are billed.

6. From Leveraged Labour to Asset-Enabled Consulting Models

Closely linked to reward is the shift towards more asset-enabled consulting. AI and automation accelerate this transition, but the underlying change is structural.

Roles increasingly combine client delivery with contributions to tools, methodologies and platforms. Vencon Research observes early differentiation between delivery-led roles and hybrid roles blending advisory, product and commercial responsibilities.

Over time, this trend will continue to influence career paths, grading structures and promotion criteria.

7. Reconfiguring Learning and the Consulting Apprenticeship Model

The widespread adoption of AI and digital tools has changed how junior consulting work is performed. Tasks traditionally used to build foundational skills are increasingly automated or augmented.

Consulting firms are rethinking how learning and development are structured, introducing more formal development pathways, earlier responsibility and clearer expectations around skill progression.

Preserving the strengths of the apprenticeship model while adapting it to new working patterns remains a central HR challenge.

8. Attracting and Developing Scarce and Interdisciplinary Talent

Skill shortages continue to affect consulting firms, particularly in areas such as data, technology, sustainability, risk and regulatory advisory. These roles often combine technical and strategic capabilities that do not align neatly with traditional consulting career models.

Vencon Research sees firms combining targeted hiring with greater emphasis on reskilling and internal mobility. Career frameworks are being adjusted to support deeper expertise alongside broader consulting development.

Talent strategy is increasingly shaped by scarcity rather than surplus.

9. Integrating Technology and AI Acquisitions into Consulting Firms

Acquisitions remain a key route for capability building, particularly in AI and digital services. Integration, however, remains challenging. Differences in culture, pace and reward expectations can create friction within partnership-led firms.

HR is playing a greater role in redesigning job families, performance frameworks and progression paths to accommodate hybrid consulting-technology roles. Organisational design is becoming as important as retention in determining success.

Integration is no longer viewed as a short-term issue, but an ongoing management challenge.

10. Governing AI as Part of Professional and Risk Standards

As AI becomes embedded in client delivery, consulting firms are formalising expectations around its use. Regulatory scrutiny, client expectations and reputational risk are driving clearer policies and accountability.

HR’s role includes embedding AI-related competencies into role profiles, supporting training and certification, and clarifying responsibility for appropriate use. In many firms, AI governance is treated as an extension of professional standards.

This reflects a broader shift towards explicit risk management in people strategy.

11. Leadership Capability in Hybrid and Distributed Consulting Firms

Hybrid working models are now well established, but their implications for leadership continue to evolve. Leading distributed teams requires new capabilities around performance management, coaching and engagement.

Research from organisations such as Gartner consistently highlights leadership development as a priority for CHROs. In consulting, effective leadership is increasingly linked to productivity, retention and culture.

Leadership capability is a critical lever in sustaining performance.

12. Re-Anchoring Culture and Learning in Hybrid Consulting Environments

With less reliance on physical proximity, consulting firms are taking deliberate steps to build culture and support learning. Informal knowledge transfer no longer happens by default.

Vencon Research observes increased investment in structured onboarding, coaching and hybrid collaboration practices. While flexibility remains a key attraction and retention factor, maintaining consistency and connection across the firm requires ongoing effort.

Culture and learning are increasingly treated as design challenges rather than by-products of co-location.

13. Building Talent for Sustainability, Climate and Resilience Practices

Demand for sustainability, climate, ESG and resilience-related advisory continues to grow across the consulting industry. Clients increasingly expect firms to combine strategic insight with technical and regulatory expertise, prompting many to scale dedicated practices or embed sustainability capabilities across service lines.

For HR, this creates challenges that do not fit neatly within traditional consulting models. Sustainability and climate roles often require interdisciplinary profiles, combining consulting skills with scientific, engineering, regulatory or data expertise. Firms are responding through a mix of targeted external hiring and structured reskilling of existing consultants.

As these practices mature, HR functions play a central role in defining job architecture, career paths and reward frameworks that support growth.

HR Trends in Consulting: Looking Ahead to 2026

These HR trends demonstrate a continued shift towards greater clarity, discipline and integration in people strategy. Regulatory change, evolving operating models and technology adoption reinforce the need for coherent job architecture, reward structures and development pathways.

For consulting firms, HR is no longer limited to support or compliance. It is central to shaping how consulting work is delivered, how talent is developed, and how value is created in a complex, competitive environment.

Contributors

• Erwin Harbauer - Managing Director / Partner
• Andy Klose - Associate Partner
• Shukhrat Iskandarov - Client Solutions Manager

Vencon Research works closely with consulting firms to translate these insights into practical decisions. Whether you are assessing your workforce model, reviewing reward frameworks, or designing career paths, our benchmarking and advisory services can provide the data, analysis and guidance needed to act with confidence. Contact us to discuss how we can support your HR strategy for 2026 and beyond.

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