Consulting pay compared: billed hours versus the published average

What to take away

The three numbers behind any offer

A firm sells hours. Three numbers set the revenue it can attach to you. The first is what a client pays per hour. The second is the fraction of your working hours a client is charged for. The third is the ratio of junior staff to senior staff on your engagements.

A firm with a high billing rate and low utilization can be less profitable than one with the opposite, and it will pay accordingly. McKinsey, Bain and Boston Consulting Group often bill at premium rates and staff small teams. Deloitte, Accenture and PwC often run larger teams with more juniors per senior.

None of these three numbers is secret inside a firm. None is usually volunteered outside it. Ask about all three in an interview. A firm that discusses its rate card and utilization target tells you the truth about the job. One that discusses neither asks you to take the offer on faith.

The same arithmetic sits under every offer, which is why the salaries and advancement cycle decides most of what you are paid.

The ratio question matters most for what the work feels like. Many juniors under each senior means the senior sells and reviews while the junior produces. A flatter structure means everybody does some of everything, which is more interesting and, in a bad quarter, more exposed.

What the published averages actually say

The Bureau of Labor Statistics publishes wage estimates by occupation, not by industry culture. Management consultants land under Management Analysts, code 13-1111, in the Occupational Employment and Wage Statistics survey. The May 2024 release put the median annual wage at $99,410, with the lowest ten percent near $58,000 and the highest ten percent above $180,000.

That spread is the point. A single median covers a first-year analyst in a regional firm and a partner-track principal in a Big Four practice, and it describes neither. Independent practitioners sit outside employer surveys, so their income is missing from the BLS median.

The Bureau spells out what its estimates include and exclude. Read its questions and answers page for the wage survey before you compare an offer to anything.

The site refuses an automated request but serves the page normally in a browser. A failed script is not evidence that the page is gone.

Where the average and the billed hour diverge

Take a consultant with a $200 hourly rate, a 75 percent utilization target and 1,800 available hours in a year. Billed hours come to 1,350. Revenue attached to that person is $270,000.

Now change one variable. Drop utilization to 60 percent and the same rate produces $216,000. Raise the rate to $250 and hold utilization at 60 percent and you are back to $270,000. The published median does not move when either number moves, because it never saw them.

Firms price salary as a share of that revenue, usually between a quarter and a third for junior staff. The rest covers overhead, senior time and margin. Substitute your own rate and utilization into that arithmetic rather than trusting a rule of thumb.

That last row is the comparison. A first-year analyst at a $200 rate and 60 percent utilization sits below the published median before bonus. The same analyst at 75 percent utilization sits near it. A senior at a $400 rate and 70 percent utilization sits well above it.

McKinsey, Bain and Boston Consulting Group often clear the BLS median at the consultant level. Deloitte, Accenture and PwC offers can start below it and climb with title and utilization.

Where unbilled hours go

Nobody bills a hundred percent of their time, and nobody should. The question is what happens to the rest. Public postings and firm career pages often cite utilization targets from 70 percent to 85 percent for client-facing consulting staff.

Ask what share of a typical consultant's year falls into each of those. Ask how the firm treats bench time when it decides pay. That answer is the most useful thing you can learn about a consulting employer.

Independent practice is a different question

Going independent changes the arithmetic rather than improving it. You now hold the rate, the utilization and the cost of finding the next engagement. You carry unbilled time yourself.

A day rate that looks generous against a salary covers holidays, gaps, insurance and equipment. It also covers accounting and selling time. The Small Business Administration's business guide sets out parts of that structure you would take on.

Freelance marketplaces such as Upwork and Catalant list consulting projects across a wide rate band, commonly from about $60 to $250 an hour. Strategy, M&A and specialized regulatory work often clears $300 an hour.

The comparison that matters is not the day rate against the salary. It is the day rate multiplied by the days you can realistically sell, minus what the employer used to absorb.

A $1,000 day rate sold 120 days a year is $120,000 before business costs. The same person as an employee on a $99,410 BLS median base may also receive bonus, benefits and paid bench time.

Reading a specific offer

Step five is the one people skip. A payment conditional on being there in June is a cost of leaving rather than a reward for the year. It belongs in a different column of your comparison from the salary.

Where a large share of the package is contingent, the questions to put to the plan itself are the same ones the page on decoding a sales pay plan sets out.

The general mechanics of how a level and a scope turn into a range are covered in the salaries and advancement guide, and they operate underneath all of this.

At McKinsey, Bain and Boston Consulting Group, the posted range is the start of the conversation. Deloitte, Accenture and PwC operate the same way. Ask for the billed-hour math behind the role.

The trade you are being offered is worth naming plainly. Consulting pays for flexibility and intensity, and what the four kinds of consulting business actually are determines how much of each you are signing up for. If the sold hour is what pays, then a firm whose sales are unreliable will find some way to make that your problem.

Common questions

Is a higher day rate always better?

No. A rate is only worth what you can sell of it. A lower rate with a full pipeline beats a higher one with three months of bench, and the firm knows which it has.

How do I compare an offer from a large firm with one from a small practice?

On the pipeline, the ratio of juniors to seniors, and what the firm does with you when work is thin. A large firm carries you longer and asks more of you in return.

A small one is more exposed and usually gives you more of the client relationship. Public postings show the base range, but only the interview shows the utilization and bench policy.

Does an industry specialization change what I can earn?

It changes what a client will pay per hour, which is one of the three numbers. It also narrows the set of engagements you can be staffed on, which affects the second. Whether that is a good trade depends on the depth of the market you are specializing into.

Should I count the training and the brand as pay?

Count them, but not as money. They are worth something when you leave, which means they are worth more if you intend to leave and less if you do not. The people who move into operations roles after a few years are the ones for whom this was the real return.