The details of this section will vary wildly based on region, time, economy, firm size, role and a million other factors, but I wanted to create some high-level buckets you can plan around. Most of these are opinions from the perspective of working in North America, but the processes and structures will exist in most countries in similar capacities.
When it comes to compensation prior to even the interview process, remember to always do your research online to get a more accurate picture of what other consultants in similar roles are reporting. There are many websites that share salary ranges, reviews and possible interview questions which can be very valuable when looking for a new job. If you are entering consulting and are completely new to the field, with little to no experience, you are probably applying for the role of core entry-level consultant. Compensation can usually range anywhere around fifty to sixty thousand dollars a year right out of university. If you are lucky and the market is hot, you may be able to score a signing bonus as well that could potentially range from two to ten thousand dollars. Just remember, a signing bonus is considered income and will be taxable at the end of the year. Remember this before you blow more than 75% of your bonus on celebrating your new job.
The standard insurance benefits for a consulting role will include health care, dental care, vision, short-term disability and long-term disability. All the costs associated with insurance are rarely covered solely by your employer, but rather the cost is split between you and your employer where they pay the larger percentage and your cost portion will be deducted out of the bi-weekly paycheck. For benefits, you will be required to select the type of plan(s) when you are hired. After this, you will only be able to make changes during the insurance company’s enrolment periods that usually occurs once a year for a few weeks, so choose wisely. Contact your HR or reach out to your provider to get all the information you require to ensure you get the right plans that fit you and your health needs.
On your first day, you will also be required to fill out a W-4 which can look complicated and overwhelming. The W-4 is a form that allows your payroll team to know how much money to withhold from your paycheck to cover year-end taxes owed. You will be asked to check off your allowances. The more you select, the less money will be withheld from your paycheck. However, if you do not withhold enough throughout the year, you may be on the hook for paying a large amount come tax season. Consult with your HR representative if you have any questions. The default best practice is to plan to have enough withheld so you do not have more to pay at the end of the year, while not having too much withheld to where you could have had that cash on hand for expenses and investments.
As you gain more experience, your pay will grow as well. This will be highly dependent on your performance reviews, the firm’s financial performance and your decision to switch jobs. You should shoot for an average of between 3-10% pay increases every year. It is very common to break six figures within five-eight years of consulting, but you may also need to change firms every few years to get a better opportunity to negotiate a higher salary if your compensation bumps stalls out. I know job hopping can be frowned upon, but there is a difference between being loyal to a firm that respects you and pays your worth vs. one you are loyal to and is stunting your financial and personal growth.
Are you interested in starting a career in consulting? Be sure do read the full book Jack of all Trades Master of Some; An Introduction to Consulting available on Amazon.