The management consultancies process of making an offer and securing, or losing, a candidate who might have been in your interview process for months is fraught with potential for disaster. Too low a salary and you won’t secure them. Too high, and you might store up internal comparability problems, lack of headroom for further salary growth or render them too expensive for clients, etc.
Your management consultancies business will have a market position, an income and cost model relating to salaries. This will factor in the profitability of the business, growth, related investment decisions, the remuneration of the founders/shareholders and so on. As a result, the business should have a broad understanding of the salary range it can afford for a given level.
This guide is intended to ensure you can secure the best staff you can afford, not to suggest you change your model: however it is always sensible to work from informed market rate guidelines and salary surveys. You also need to factor in that many candidates will of course be trying to secure themselves the highest salary possible.
Here is Prism’s six-point plan for management consultancies success:
1. Ensure you have internal clarity and agreement on what your salary ranges are for each job level
This might sound obvious but smaller management consultancies may have managed to grow without formalising this. For each level divide the salary range into three and then document what skills and performance you would expect to see in each band. This will help ensure you don’t get salary creep in external hiring, avoid external candidates leapfrogging existing staff and provide a clear path for employees’ salary reviews.
2. Decide what salary ranges you will go to market with
Some management consultancy firms decide, for example, they will not recruit externally beyond a certain point in the range. This helps avoid internal problems and always allows headroom for rises, but it can be restrictive. You should be clear internally and with external recruitment partners on what this range should be. For example, “our preference is in the range £85,000 to £90,000 but the maximum we could go to is £92,500”. The actual range of pay might be up to £100,000 (for example) but there is not necessarily an advantage in making that information available externally.
3. Include salary information when you advertise
If you are recruiting directly and advertise vacancies on your website or job boards, you need to decide whether to “go public” on the salary. On the plus side, there is a lot of evidence you will maximise the flow of relevant candidates mainly because applicants are much more likely to apply if there is a stated salary.
Furthermore, you won’t waste time dealing with candidates who won’t consider your salary range. Understandably, however, you will need to consider whether you want potential clients and competitors seeing this information. Also, there may be advantages in the negotiation process to a degree of opaqueness! A very bad reason for not displaying salaries is out of fear of the reaction of existing staff.
4. Check management consultancies candidate expectations at first interview
Early on in the management consultancies recruitment process, you need to get some clear guidelines on salary expectations from the candidate. This can be a sensitive subject, but the nettle needs to be grasped as it will not only save a lot of time but also make it much more likely that the final stages will be fruitful. It’s not really something you can ask by email so this should happen in the initial telephone call or during the first interview. Ideally, just be frank and ask them!
You need to capture:
- base salary (and when last/next reviewed)
- any cash guarantee (e.g. car allowance, London weighting etc)
- bonus (both target AND what has been achieved as well as when next awarded and next paid)
- pension % (employer and employee)
- travel expenses (if they are home-based and your policy is different, this can make a huge difference)
Be aware that sometimes figures change with a bit of gentle probing: your follow up to the answer to your question “what is your base salary?” should always be “So to confirm £xxx is your base salary?”
You should also ask them what salary range they are seeking: there is a risk of course that if they have seen you advertise a range or the agency has told them one, they will ask for the top of that! If they are seeking either considerably below or above the advertised figure now is the time to address this.
If the management consultancies candidate is unwilling to divulge a figure, don’t take it negatively: it MAY be a sign they are earning considerably less than you might offer, and they don’t want to put you off. They could be earning more and either wary of your reaction to them considering a salary drop or hoping you will be willing and able to offer more to accommodate them. But equally, it is an area not everyone is comfortable discussing especially at the first interview.
You should, however, try and pin them down to a preferred salary range. Again be direct: “What’s the minimum base you would accept? What’s the salary you’d be pleased with?”. Also, try and assess their attitude to variable compensation: candidates differ markedly in how they view bonuses, or shares, for example.
Be prepared to gently “test” them: clearly you don’t want a full on argument but if their aspirations are more than you’re expecting try and find out the basis for their suggestion.
5. Re-check the management consultancies candidate’s requirements at final interview
At the final interview repeat 4) above. It may now be several months since you asked. They may have other offers, which will give them a clear benchmark of their worth. The candidate may have had a raise or a bonus. They may have had NO other offers! He or she may decide to “try their luck” as they will assume you’re obviously interested in them and their bargaining position is therefore stronger. The key questions are, again: “What’s the minimum base you would accept?” and “What’s the salary you’d be pleased with?”.
Manage their expectations. Hopefully, you can afford their minimum as otherwise you would have ruled them out at 1st stage (unless it’s changed: in which case ask them why). If any likely offer would be at or around the lower figure you should explain why, if possible, and seek to reassure them regarding variable aspects, as well as career (and therefore salary) progression.
6. Make an offer
Reference 1) above and 5) above. Some employers consider this stage a cat and mouse game: “we’ll make a low offer and see what the candidate says”. DO NOT DO THIS. Candidates do not like it at all: many view it as insulting and some simply hate negotiating, with the (perceived) demeaning “haggling” aspect. They want to know that you have considered their value carefully and done your utmost to entice them with a “best and final” offer.
You may think they will push back if they are interested, and you can then agree to a compromise figure. They may do, but is it worth the risk? Much more likely is you will have curdled the relationship and perhaps pushed them to accept another offer. Worse still, you may end up having to offer them MORE than they would have originally been happy with, to sweeten them (yes, we have seen that happen).
In summary
The offer you make should be very simply the best you can afford and believe they are worth. It should be a figure where if the candidate says no you can console yourself you gave it your best shot. If that is above the amount they said they would be happy with: even better! You have delighted them! If the offer is at or around their minimum is there ANYTHING you can do to sweeten the pill? A sign-on bonus? Guarantee part of the annual bonus? Bring forward a salary review? Share schemes?
A good and experienced Management Consultancies recruiter make a big difference in getting this right and the term “agent” is especially valid. If they do their job well then not only will there be a successful hire but also all parties should feel pleased with the outcome!
If you would like to discuss how Prism could help you to find and secure your ideal candidate please contact Chris Sale, Managing Director, Prism Executive Recruitment on 0203 143 5926 or [email protected].
You can find more information on our recruitment solutions in our Client Services pages.
