As we've reported, consulting firms should brace themselves for a spike in voluntary attrition when the economy improves next year, according to a survey of nearly 10,000 consultants conducted by Consulting this summer. According to the same survey, "more money" is, by far, the most important thing another employer could offer to lure consultants away from their current firm.
As a result, you might think that the best way to improve consultants' compensation satisfaction—and thereby, improve staff retention—would be to raise salaries. But you'd be wrong.
As it turns out, there is not always a corollary between the amount of money someone makes and their level of satisfaction with their compensation. Consultants' at small firms (those with fewer than 200 consultants) earn a base salary that's about 13 percent lower than their counterparts at larger firms, especially at the more senior levels. And yet, consultants at smaller firms report greater satisfaction with their compensation.
Across all six categories (job satisfaction, firm culture, leadership, career development, work/life balance, and compensation and benefits) Consulting uses to define a "Best Firm to Work For," consultants at the average small firm reported higher compensation satisfaction than those at larger firms. In particular, consultants at smaller firms reported greater participation in firm decision making, fostering of a team-oriented culture, and firm commitment to their local community.
The takeaway seems to be that the happier someone is with their job, the more they respect their managers, and genuinely like their firm, the more satisfied they are with their salary. The opposite is also true. The less satisfied someone is with their job, the more they focus on their paycheck.
This is good news for the profession. Given the ongoing profitability challenges facing consulting firms, few can afford to increase wages. That being said, the news should also be taken as a warning sign: Reinvest in firm culture, make strides to improve job satisfaction, and reinvest in your staff, or consultants may go to the first firm offering a higher salary.
—Jess Scheer
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