SOURCE: Kennedy Consulting Research & Advisory

Kennedy Consulting Research & Advisory

September 29, 2009 10:35 ET

Restructuring of Consulting Compensation -- Paramount

Kennedy Consulting Research & Advisory Releases 2010 Consulting Compensation Level Forecasts

PETERBOROUGH, NH--(Marketwire - September 29, 2009) - The consulting downturn will, as expected, limit increases in total compensation, according to new research from Kennedy Consulting Research & Advisory -- "Consulting Compensation Data, Trends, and Strategies 2009-2010." However, the combination of base, bonus and long-term incentives is changing in significant and unanticipated ways across the profession.

While compensation levels at consulting firms could not continue to grow at the same pace that persisted before the current economic downturn, Kennedy's analysis indicates that there is no one trend characterizing changes in compensation within the consulting profession. Some, in anticipation of contracting revenues in 2009, adjusted goals lower in order to keep employees focused and motivated. Others aggressively deferred or cut bonus payouts. Still others adjusted base to bonus ratios.

JJ Sendelbach -- lead writer of Kennedy's "Consulting Compensation Data, Trends, and Strategies 2009-2010" and Managing Director, Kennedy Information Advisors -- details firms' compensation restructuring initiatives in the recent study. He also advises the industry to make good use of the dichotomy between individual consultants' and firms' ideas about compensation. "Across the industry there exists a disparity between consultants' expectations for 2010 compensation levels and actual market realities," says Sendelbach. "To effectively plan for the coming year, it is critical to bridge an overly optimistic outlook with actual market realities. This can help position human capital well for the recovery."

Supporting that, Kennedy research shows consultants' compensation expectations are upwards of 10% more optimistic than forecasted levels of compensation across the profession. Within the consulting service segments analyzed in the research, Business Advisory Services (BAS) and Human Resources (HR) providers are expected to see less of a decline in compensation growth than other consulting service lines. In fact, most HR consultancies continue to expect a high bonus payout for 2009.

The research also shows that within BAS the gap in compensation growth between VPs/Partners and all other consultants is significant. Base salaries for VPs/Partners are expected to be more than double that for the Director/Manager level.

About "Consulting Compensation Data, Trends, and Strategies"

"Consulting Compensation Data, Trends, and Strategies" offers data and qualitative insight into consulting compensation levels by service including: Strategy (Financial Strategy, Marketing & Planning, Strategic Planning, Organizational Strategy); Business Advisory Services (Forensics & Litigation, Internal Audit Advisory); Operations Management (Operations Improvement); and Human Resources (Compensation & Benefits, Human Capital Strategy), as well as by key cross-service line titles including M&A Advisory, Risk Management, Supply Chain Management, and IT Strategy & Planning. Compensation by career levels examined include VP/Partner, Director/Manager, Senior/Experienced Consultant, and Entry Level Analyst. The analysis also details how top-tier firms are responding to the downturn in an effort to maintain their status as an employer of choice.

About Kennedy Consulting Research & Advisory

Since 1970, Kennedy Consulting Research & Advisory, a division of Kennedy Information, has been the world's leading source of market analysis on the Management Consulting and IT Consulting industries, serving the most highly regarded professional services firms and Fortune 500 companies across the globe.

Kennedy provides accurate and reliable market sizing and forecasts for consulting services world-wide; needs analysis and vendor profiling for buyers of consulting services; timely and insightful intelligence on the top consulting firms in their respective markets; and operational benchmarks that measure consulting performance. Kennedy Consulting Research & Advisory's research spans multiple service areas, client vertical industries, and geographies. Kennedy's stand-alone consulting advisory unit, Kennedy Information Advisors, provides results-oriented strategic guidance to buyers and sellers of consulting services.

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