Latest InSights

By: Andy Klose and Jalol Khodjaev

In the competitive landscape of consulting firms, attracting and retaining top talent is crucial. Vencon Research has recognized the need for strategic guidance in compensation management and has introduced Pay Recommendations, an innovative enhancement to our compensation benchmark reports for the consulting industry. This solution is designed for both consultants and partners and has the potential to revolutionise how consulting companies approach their compensation strategies.

Tailored Solutions for Consulting Firms

At the heart of our Pay Recommendations lies a deep understanding of the unique needs of consulting firms, particularly for client-facing career levels below Partners and above. These recommendations are not one-size-fits-all; rather, they are bespoke reports crafted based on the Consultant Salary Reports or Partner Compensation Reports delivered to clients. Taking into account the specific local and service line dynamics of each client’s company, our reports provide a comprehensive evaluation of various compensation elements, including Total Cash Compensation, Basic Salary, Target Bonus, and Allowances.

Strategic Insights for Optimal Compensation Strategies

Vencon Research provides strategic insights into career progression and budget implications, in addition to numerical analysis. We align compensation elements with the client's desired market positioning to ensure adherence to the firm's pay philosophy while maintaining market competitiveness. Our aim is to facilitate gradual increases aligned with market percentiles, fostering employee rewards and career development in tandem.

Actionable Recommendations for Sustainable Growth

The true value of our Pay Recommendations lies in their actionable nature. With detailed suggestions for appropriate changes in each relevant compensation element, tailored to the client's positioning target, pay philosophy, and other metrics, our reports empower consulting firms to make informed decisions. By providing insights into the expected budget impact and assessing staff distribution across career levels, we enable strategic workforce planning and optimization of resources.

Illustrative Graphics and Comparative Analysis

Illustrative graphics within our reports vividly demonstrate the gap between current pay structures and market percentiles, highlighting areas for improvement. Through comparative analysis, we offer a holistic view of the client’s situation, enabling them to benchmark their compensation practices against industry standards. Moreover, our unique feature comparing career progression provides a time-based perspective on firm attractiveness for career development opportunities.

Guidance and Insights

Our Pay Recommendations provide clear and concise guidance on compensation elements, ensuring ease of implementation. We offer simulations of expected budget impacts and comparisons of staff distribution across levels, providing valuable insights into competitive positioning. Vencon Research provides data-driven recommendations and strategic guidance to empower consulting companies to optimize their compensation strategies for sustainable growth.

Empowering Consulting Firms for Success

In conclusion, Vencon Research's Pay Recommendations signify a significant change in how consulting firms approach compensation management. Our Pay Recommendations provide actionable insights, specific pay suggestions, and strategic guidance, empowering our clients to attract and retain top talent while maintaining competitiveness in the market. As the consulting landscape continues to evolve, our commitment to unlocking strategic insights remains unwavering. With Vencon Research as your partner, you can embark on a journey towards success, driven by informed decision-making and strategic vision.

A video overview of the Pay Recommendations report is available here.

We are at your disposal for further questions and suggestions regarding how you optimally design pay ranges and/or remuneration systems for your company.

Book your introduction meeting online here.

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

Jalol Khodjaev is a Senior Consultant at Vencon Research International’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.

‍

By Irina Kvirikadze - Senior Manager Data Integrity

Competitive compensation packages play a pivotal role in attracting, retaining, and motivating top talent - essential for delivering value to clients and driving sustainable growth in the consulting industry.

Here, we take a look at expected global and regional salary increases, as well as factors influencing salary adjustment for the year ahead.

Expected Global Salary Growth Projections

Vencon Research’s own findings [i], backed up by other studies [ii], suggest that despite some economic concerns, companies all over the world are inclined to maintain a fairly aggressive approach towards compensation.

Among the primary factors for increasing salary budgets are inflation and cost of living adjustments. Inflationary pressures and rising costs of living have compelled consulting firms to review and adjust their compensation structures accordingly. Expected salary increases in 2024 are, partially a response to inflationary trends to maintain the purchasing power of their employees.

Salary increases and inflation rates exhibit significant variation across countries, yet this overarching trend is observable in many, though not all, countries. According to Vencon Research findings (see Figure 1), average global salary rises in 2024 is 5.2% and inflation rate 3.3%. It's important to highlight that in 2023, salary increases outpaced inflation [iii], and this trend is likely to persist into 2024.

Salary increases can vary depending on the geographic location of the consulting firm within a country and its employees. For example, consultants working in major metropolitan areas with higher costs of living may receive larger salary increases compared to those in smaller cities or rural areas. Consequently, each country [iv] and region should be assessed independently, given the significant disparities in economic conditions. The subsequent section will provide further exploration into expected salary increases at both regional and national levels.

Expected Regional and National Salary Growth Projections

Regional salary increases in 2024 vary from 5% to 5.4% and inflation rates from 2.8% to 3.8% (see Figure 2). In Europe, salary increases vary between 2% to 10.4% and inflation rates from 1.9% to 6.6% (see Figure 3). In Belgium, as the inflation rate stabilizes, salary increases for 2024 are projected to decrease to 4.9% compared to the previous year's increase of over 11%, which was influenced by wage indexation tied to inflation [v]. In Germany expected salary increase is 4.4%, in France 4.1%, in Spain 3.9% and in the United Kingdom 4.8%.

In countries with high inflation rates such as Türkiye, where the predicted inflation rate for 2024 exceeds 50%, the expected salary increase stands at 45.4%[vi]. Nevertheless, companies are implementing additional measures such as frequent salary adjustments and issuing payments in foreign currencies.

In the Americas, encompassing both North and South America, projected salary increases stand at 5.3%. Excluding Argentina, a country experiencing hyperinflation, the highest average salary increases in this region are anticipated in Brazil (6.3%) and Colombia (10.1%) (see Figure 4).

In Canada and the United States of America (USA) expected average salary growth rates are 4% and 4.3% respectively.

It is essential to acknowledge that the anticipated economic growth of individual countries is an also an influential factor. The United States of America holds a central position in this regard, owing to the size and resilience of its market. Furthermore, certain US companies boast sales figures that surpass the gross national product of entire countries. Increasingly, attention is shifting towards APAC (Asia Pacific) while diminishing emphasis on Europe. This transition is further accelerated by sluggish economic growth in Europe and notably in Germany [vii].

According to the Vencon Research study, it is anticipated that a majority of locations in the APAC region will either maintain or surpass their real salary growth rates from 2023 in the year 2024 (see Figure 5). China is anticipated to maintain one of the lowest inflation rates at 1.7% in 2024, trailing only behind Taiwan and Thailand in this region. Despite this, it is expected to experience a notable average salary increase of 5.6%. Conversely, India which is poised to lead the way in projected salary increases within the APAC region, with an impressive figure of 9.7%.

As seen in numerous other countries, the anticipated average salary increases in the Middle East and South Africa are poised to remain robust throughout 2024. Projections indicate that pay raises are expected to reach 6% in Saudi Arabia and South Africa, while in the United Arab Emirates, the figure is slightly lower at 4.2% (refer to Figure 6).

It is essential to note that beyond inflation and cost of living, there are additional pivotal factors that drive salary increases within this sector.

Factors Influencing Salary Trends: Beyond Inflation and Cost of Living

Tight Labour Market and Competition

In 2024, the demand for consulting services continues to increase as businesses face complex challenges such as sustainability initiatives, post-pandemic recovery strategies and digital transformation. In this context, consulting firms are under high pressure to attract and retain top talent to meet client expectations. This heightened demand has translated into competitive salary packages and lucrative benefits for consultants.

Today, it's not only the leading consulting firms competing for talent, but also the MAANG [viii] companies, as well as ever multiplying start-ups. This resonates with the "Z" generation, which has its distinct priorities. They are willing to put in the effort, but seek fair and transparent compensation, alongside a work-life balance conducive to family life, within a communicative, team-oriented environment. This trend predominantly impacts consulting firms operating in mature markets, while emerging markets are not experiencing the same degree of impact at present.

Industry Specialization and Niche Demands

Diversity of client specialization and the rapid emergence of new topics with increasingly shorter life cycles have significantly altered the requirements for potential consultants. Specialized expertise and niche knowledge are now more sought after than ever before. Certain specialized areas within consulting, such as technology, healthcare, or sustainability, may experience higher demand and thus higher salaries. Consultants with expertise in these areas may see larger salary increases compared to those in more general consulting roles or general lines of businesses.

Emerging Industry Trends and Consolidation

Emerging trends and innovations in the consulting industry, such as the adoption of new technologies or methodologies, may influence salary increases. Consultants with skills and expertise in these areas may be in high demand and receive higher compensation as a result.

Apart from that, the consulting landscape has witnessed significant consolidation through mergers and acquisitions, with larger firms acquiring boutique consultancies to expand service offerings and market presence. Salary increases may reflect the impact of industry consolidation, as firms seek to integrate talent seamlessly and align compensation structures across merged entities.

Conclusion

In conclusion, the dynamics of expected salary increases in 2024 within the consulting industry reflect a multifaceted interplay of global economic factors, regional trends, and industry-specific dynamics. Despite economic uncertainties and inflationary pressures, consulting firms are maintaining fairly aggressive compensation strategies to attract and retain top talent crucial for delivering value to clients and sustaining growth.

Across different regions, variations in salary increases and inflation rates underscore the importance of localized analysis and decision-making. Factors such as tight labour markets, industry specialization, and emerging trends significantly influence salary trends, with specialized expertise commanding higher compensation. Furthermore, the ongoing consolidation within the consulting landscape through mergers and acquisitions has implications for salary structures as firms integrate talent and align compensation strategies across entities.

It is interesting to observe how all the market conditions and factors will influence actual salary budget expenditure across all markets in 2024. However, as the consulting industry continues to evolve, a nuanced understanding of salary dynamics remains essential for sustainable growth and success.  To effectively navigate these complexities and ensure competitive compensation packages, it is imperative to base decisions on the most accurate, pertinent, and up-to-date market data available. Failure to do so will perpetuate the challenges currently faced by employers, ultimately eroding efforts in attraction, retention, and motivation, thereby resulting organizations failing to meet their anticipated outcomes.

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.

[i] Vencon Research analysis encompassing more than 50 countries.

[ii] Various inflation forecasting and research firms, incl. Kienbaum, Korn Ferry and Willis Towers Watson

[iii] Bremen, John. "Will Pay Increases Exceed Inflation in 2024?" Forbes, 14 Dec. 2023

[iv] Each country and its profile will be thoroughly reviewed in upcoming briefings from Vencon Research.

[v] Vencon Research. "Belgium's Consulting Industry Braces for Government-Enforced Salary Adjustments" Vencon Research

[vi] Considering hyperinflation and data volatility

[vii] DW News. "Germany's Economy Set for Rough Ride in 2024" DW

[viii] Meta (Facebook); Amazon; Apple; Netflix; and Google (Alphabet)

‍

By Osas Ohenhen - Business Development

The Compa-Ratio (Comparative Ratio) is a widely used metric in salary surveys and compensation management. It's a measure of an individual’s salary relative to the market or company average for similar positions. This quick guide gives an overview of its importance and how it comes to play in Vencon Research’s Consultant Salary Survey.

Importance of Compa-Ratio in Salary Benchmarking

In salary benchmarking, the Compa-Ratio serves as a key metric, indicating how an individual's or a firm's salary levels compare to the broader market or industry standards.

1. Market Positioning: Compa-Ratio allows companies to position themselves competitively in the job market. By comparing their own salaries to the market average, companies can determine if they are paying above, at, or below the market rate for similar roles.
2. Attraction and Retention of Talent: Competitive compensation is key to attracting and retaining top talent. A Compa-Ratio lower than 1 might suggest that salaries are below market rates, potentially affecting the company's ability to attract and retain employees. Conversely, a higher ratio indicates a competitive edge in the job market.
3. Informed Compensation Strategy: Compa-Ratios provide insights that help in shaping a company’s overall compensation strategy. Understanding how salaries compare to the market informs decisions regarding salary adjustments, increments, and setting salary bands for different roles.
4. Budget Allocation: Knowledge of how salaries compare to the market guides how a company allocates its budget for salaries and benefits, ensuring that resources are used effectively to maintain market competitiveness.

Compa-Ratio in Vencon Research’s Data Services

Compa-Ratio’s come into play across our compensation data and analytics services, where they serve:

1. Market Analysis: Vencon Research uses Compa-Ratios to provide clients with a detailed analysis of how their compensation levels compare with a selected market or group of participants. This helps in identifying positions or departments where the compensation is not aligned with the market.
2. Tailored Benchmarking Reports: By leveraging Compa-Ratios, Vencon Research can offer customized benchmarking reports, providing clients with precise insights into their competitive position in the talent market.
3. Strategic Advisory Services: Utilizing Compa-Ratios, Vencon Research can advise clients on how to adjust their compensation strategies to better align with market standards, aiding in talent attraction, retention, and overall organizational success.
4. Sector-Specific Insights: Understanding that different sectors may have different compensation standards, Vencon Research provides sector-specific insights using Compa-Ratios, ensuring that clients receive the most relevant and precise market comparison data.

Compa-Ratio in the Vencon Research Consultant Salary Survey

Vencon Research's Consultant Salary Survey features a concise Compa-Ratio tool, enabling firms to directly compare their remuneration against market data. The tool, integrated within remuneration element tabs, provides a percentile table showing market compensation from the 5th to the 95th percentile.

Color codes—green, yellow, and red—indicate how a firm's pay varies from the market average, allowing for quick visual assessment. Users can select specific percentiles for targeted comparisons, understanding their firm's competitive position. The tool also offers functionalities to compare against the firm’s mean or median and simulate necessary budget adjustments, ensuring firms can strategically align their compensation with market standards.

A video overview on how Vencon Research uses Compa-Ratios in our surveys is also available.

We are at your disposal for tailored advice and solutions based on comprehensive data and industry expertise. Contact our team here.

‍

By Yao Tang - Business Development

With labour shortages challenging growth, companies across all sectors in Japan face the dilemma of attracting and retaining top talent while upholding stringent standards. As many of Vencon Research’s local clients have shared with us, this is also a critical concern within the consulting industry.

Maintaining high standards in recruitment remains crucial. Lowering stringent entry requirements is still considered a last resort as businesses strive to secure top talents without compromising quality.

Current Challenges in Japan’s Talent Market:

With Asia's largest economy centered in Tokyo, Japan faces unique challenges in its job market. Major factors contributing to this include:

1. Discrepancy in Demand and Supply: Japan, housing Asia's largest and most diverse economy, centered in Tokyo, grapples with a talent shortage despite a low unemployment rate of 2.70%. Factors like the post-COVID economic resurgence, an aging population, and globalization contribute to a surge in demand for specialized talents, particularly in fields like consulting.

2. Lack of Talent Fluidity: The prevalent job-for-life mentality in Japan poses a significant hurdle to talent mobility. Extracting employees from entrenched positions is challenging due to deep-seated loyalty and risk aversion. Traditional Japanese firms, known for stability, discourage job changes, presenting recruitment challenges for employers.

3. High Cost of Talent Recruiting: Japan's agency culture expedites hiring but inflates recruitment expenses. Steep provisions, reaching up to 100% of a successful candidate's annual salary, pose financial challenges. Even tier-1 consulting firms face provisions of around 80%, contributing to inefficient recruitment processes.

Strategies to Navigate the Challenges:

As employers grapple with attracting and retaining top talent while upholding rigorous standards, strategic solutions come to the forefront, from investing in employer branding to streamlining recruitment processes:

1. Invest in Employer Branding: Highlight your company's unique culture, values, and growth opportunities through social media, employee testimonials, and industry accolades to attract top talent.

2. Develop Talent Pipelines: Forge partnerships with universities, professional organizations, and industry networks to identify potential candidates proactively, ensuring a steady stream of qualified candidates.

3. Offer Competitive Compensation and Benefits: Conduct market research to ensure competitive compensation packages. Consider additional perks, such as flexible work arrangements and wellness programs, to attract and retain talent.

4. Provide Training and Development: Invest in training programs to upskill employees and attract candidates valuing continuous learning. Offer opportunities for professional growth to increase satisfaction and retention.

5. Streamline Recruitment Processes: Optimize recruitment processes using technology, such as applicant tracking systems and video interviews, to reduce time-to-hire and enhance the candidate experience.

6. Cultivate a Positive Candidate Experience: Ensure a positive and professional experience throughout the recruitment process. Communicate transparently, provide timely feedback, and personalize the experience to make candidates feel valued.

One common factor uniting these initiatives is that they all underscore a commitment to securing and retaining top talent. Organizations implementing these will pave the way for a more robust and adaptable workforce, ensuring sustained success, even within a difficult landscape for talent acquisition.

Our focus at Vencon Research is on leveraging market data to devise competitive compensation solutions tailored to your needs. Our expertise lies in optimizing employer branding, streamlining recruitment processes, and offering strategic HR solutions. For further insights and to explore how our expertise can benefit your organization, please feel free to contact us.

‍

By Veronika von Strachwitz-Camara - Business Development Senior Manager

Within the broader world of management consulting, so-called economic consulting firms provide services related to economic analysis, forecasting, and litigation support, aiding clients in achieving strategic goals and mitigating risks in evolving business environments.

Economic consulting firms tend to experience increased demand for their expertise during times of disruption and market uncertainty, such as occurred on a global scale and across industries during the COVID-19 pandemic.

Economic consultants have found themselves at the forefront of pandemic response within business, assisting clients in analysing market trends, making informed decisions, and devising strategies to weather the storm. In turn, the increased demand for expert economic insights during uncertain times has contributed to the upward trajectory of economic consulting salaries.

Economic Consulting across Sectors

Economic consultants serve a wide range of industries, and the impact of the pandemic and subsequent global unease has varied by sector. Some industries, such as healthcare and technology, saw increased demand for consulting services, which in many cases have led to salary increases.

Another sector with growing demand for economic consulting, energy and sustainability, has seen increasing growth due to the impact of climate change; as economic consulting services are called on to, for example, predict consequences of investments in certain markets and geographies.

Governments seek economic consulting services to inform policy formulation, assess economic impacts of proposed changes, and ensure data-driven decision-making. The scale and urgency of recent macro-level challenges have propelled government engagement with economic consultants to new heights. National economies faced unprecedented disruptions in the pandemic, as well as with recent geopolitical shifts such as the Ukraine war, prompting governments to seek strategies that could mitigate adverse effects and accelerate recovery or restructuring of business.

At the same time, the surge in demand hasn't been uniform across all sectors. Industries like travel, hospitality, and retail have been severely affected by events ranging from the pandemic to breakdowns in regional security, leading to decreased demand for economic consulting services in these areas.

Growth Trajectory: Economic Consulting Salaries

The overall surge in government and industry demand for economic consulting services has had a direct impact on salaries in the field. Economic consultants with expertise in areas such as macroeconomic modelling, fiscal policy analysis, and public finance have seen their skills become even more valued. Governments are competing with private sector firms to secure top talent, driving up the salaries of consultants with a proven track record in addressing complex economic challenges.

HR-sourced economic consulting salary data collected by Vencon Research as well as numerous discussions with clients in the field confirm the trend, showing in part drastic increases in economic consulting salaries.

This increased demand is not confined to developed economies; emerging markets are also recognizing the importance of economic consulting in shaping their economic recovery trajectories. As governments strive to strike the delicate balance between safeguarding public health and revitalizing economies, they turn to economic consultants for insights that can steer their policy decisions in the right direction.

It's important to note that economic consulting is a highly specialized field, and compensation can be influenced by a wide range of factors. To get a more accurate and up-to-date picture of salary trends in economic consulting, it's advisable to consult industry reports, salary surveys, and reach out to professionals in the field or specific firms for the most current information. Additionally, economic conditions and salary trends can change over time, so it's essential to consider the context of the specific time period you are interested in.

First-sourced Salary Data from Vencon Research Benchmarking Surveys

To get an accurate and up-to-date picture of salary trends in economic consulting, you can consult Vencon Research’s specialised Economic Consulting (ECO) salary surveys for the most current information.

Please feel free to reach out to one of our experts.

‍

By Yao Tang - Business Development

In the dynamic world of consulting, cultivating a work environment that engages and motivates emerging professionals is not just a matter of good practice; it's a strategic imperative for sustained organizational success.

Beyond traditional onboarding practices, this article explores practical strategies that actively contribute to the fulfilment and long-term retention of your newest team members.

Understanding the diversity of our workforce is essential. Thus, customizing retention and motivation strategies to the unique needs and aspirations of our new graduates is a pivotal aspect of talent management that ensures a workforce committed to our shared goals. Happy and motivated professionals are more likely to stay with the organization, reducing turnover costs and contributing to the continuity of high-quality service delivery.

So, let's explore some practical tips specifically tailored to the consulting industry, taking into account the diverse needs of new graduates:

1. Emphasise Client Exposure: Let new grads know they'll work on various projects in different industries. It's a great motivator for those eager to get diverse experience.
2. Highlight Training: Talk up your training programs. New hires often appreciate structured learning to build their skills.
3. Connect Work to Clients: Emphasize how their work directly affects clients and organizations. Knowing they're making a real difference can be a big motivator.
4. Fast Learning Curve: Make sure new grads understand that consulting involves a quick learning curve. The chance to learn fast can be motivating for ambitious individuals.
5. Mentorship Programs: Pair new consultants with experienced professionals for guidance. It helps them navigate projects and provides career advice.
6. Build Client Relationships: Encourage strong client relationships. The satisfaction of project success and gaining client trust can be a big motivator.
7. Explore Different Roles: Let new grads try different roles to find what suits them best.
8. Work-Life Balance: Promote a healthy work-life balance. Consulting can be demanding, so support them in managing workload and stress.
9. Recognition and Rewards: Acknowledge outstanding performance with bonuses, promotions, and incentives.
10. Global Opportunities: Talk about chances for international assignments. Some may find working abroad motivating.
11. Continuous Learning: Stress the importance of staying updated on industry trends and technologies.
12. Client Feedback: Actively seek and share positive client feedback. Knowing their efforts are appreciated boosts motivation.
13. Team Collaboration: Highlight the importance of teamwork. Strong relationships with colleagues enhance job satisfaction.
14. Exit Options: Make sure new grads are aware of potential career paths within and outside consulting.

These practical strategies for engaging and motivating new graduates in the consulting sector underscore the importance of tailoring approaches to individual needs. By recognizing the diverse aspirations and preferences of emerging professionals, organizations can foster a work environment that not only attracts top talent but also retains it for the long haul.

Feel free to get in touch with Vencon Research to explore how our tailored advisory services, market intelligence, and ongoing support can enhance your firm's HR practices. Our team is here to collaborate with you and providing practical solutions that align with the unique needs of your workforce. Together, we can shape an environment where your HR strategies not only attract top talent but also cultivate a workplace culture that fosters long-term professional fulfilment.

‍