Multiply that by your hourly rate and then add a 10-20% markup for unexpected contingencies, and voila—you have a rough estimate for a per-project consultant rate. Defining and reinforcing a predetermined scope of work is crucial when charging by the project. The best way to determine your per-project rate is to figure out how many hours you estimate the job will take. You can make an educated guess based on your knowledge of the subject and how long it’s taken you to complete certain tasks in the past. However, if you set your rates too high, you may alienate yourself from the client and out price yourself out of the project. Clients may perceive you as the high-end of the consulting or freelance market, and they may decide to settle for a less experienced but more affordable alternative.

Others have a minimum cap of “one day” or some other arbitrary amount of work they feel as a minimum requirement to get a job done. This may include other factors like having to commute or conducting video training for in-house departments. Next, consultants must check with their competitors to ensure that the markup does not go beyond percent. In fact, less than 20% of McKinsey’s most recent intake was made up of direct MBA hires, and the firm hired analysts from over 370 universities.

Or are you offering something unique that only you can provide? If you are, this can be your unique selling point and allow you to charge more based on value and scarcity. Some consultants will mystery shop their competitors to get an idea of pricing or join groups with other consultants and coaches to have open discussions online.

How to Scale Your Consulting Business in 9 Easy Steps

The biggest difference ($14) is in the field of IT & Programming, where men earn $31 and women $17. Education can be an important factor for clients who are looking to hire a freelance, but the most recent Payoneer report shows that clients actually value experience and competence more than education. When it comes to temporary positions, the position of a Application Software Developers pays the most ($48/hour) – this industry is also the most profitable one in terms of temporary employment.

Consultants who price their services based on value and ROI are 86% more likely to offer productized services. With every value-based price, you want to create a 3-10x ROI for your client. Remember, you are charging based on the ROI you will create. For example, helping your client generate 3 clients per month will generate $18K in monthly recurring revenue.

average consulting rates by industry

While we’ll get into average consultant salaries and consulting rates by industry later, these are just averages. They can influence your decision-making, but your ultimate price point is entirely up to you. This strategy may prove to be the most successful and easiest to implement for consultants of every experience level. First, you charge an initial “setup fee” which covers the cost of beginning a consulting relationship.

Real Employee Cost Calculator

By differentiating your skillset and developing a niche, you’ll become more valuable as a consultant. However, remember that your client is likely going to be looking for these same numbers. They’ll want to know how much they should be charging a consultant, so they don’t get duped. If your rates vary from industry benchmarks, be prepared to back it up. It’s only a 1,458-word document, which is almost half the length of this article. Yet, as much as we love this piece, we’d argue the Declaration of Independence is worth approximately 2.5 billion times more.

average consulting rates by industry

Many IT consultants charge hourly rates for their services. They bill based on the number of working hours spent on the project. It’s a popular choice for projects where it is difficult to establish a fixed timeline. We have discussed that potential salary level plays a factor in management consulting rates. Since salaries range based on the size of the company and the situation, so do consulting rates.

IT Consulting Hourly Rates in 2023: Full Price Comparison

When comparing consulting roles to those in industry at the same level, there are few better options when it comes to total comp. If compensation is the most important factor in your firm preferences, look at firms like Alvarez & Marsal, McKinsey, Strategy&, BCG, Bain, Accenture Strategy, and IGS. However, we recommend considering other factors in your search as well, including exit opportunities, firm culture, travel, and more. Accelerating a trend we first noticed 4 years ago, consulting firms have continued to increase hiring of specialists , experienced hires, and candidates from non-target schools.

average consulting rates by industry

You know that each client is worth $500 per month to your prospect. The value conversation is where you ask questions to your client to uncover where they want to be — and agree on the value of a successful project. But there is no better method for raising your rates and creating more value. You’ll have to improve your sales skills, accounting skills, project management skills, and more.

Hourly rates by education

A project involving an assessment that will take 2-3 weeks will be quoted at a higher rate than one that will last 3-6 months. One thing to beware of is thinking that an assignment that is full time for 3 months will have a lower rate than one that is part time for 3 months. Though there is more short term income for the full-time 3-month project and keeps them from accepting another 3-5 days per week assignment.

  • Across my network, the average consulting fee is between $150 and $1,000 per hour.
  • Determining an hourly rate is also an important part of calculating per-project or retainer rates, allowing you a baseline to work from.
  • Imagine that this consultant helps you bring a lot more new sales leads and nurtures a profit increase of $500,000.
  • Cutting corners in the early stages of development can leave you with software that underperforms or malfunctions, costing you even more time and money to eradicate bugs and fix coding errors.
  • My Consulting Fees guide goes into detail about the steps to moving to Solution-based Fees™.
  • You’re busy running your business but don’t have the resources to hire an in-house team.

To save time and money, you can work with a reliable outsourcing company like Cleveroad. We offer IT consultation from our senior specialists that’ll help you choose the best tech solution for your specific case. Many IT consultants use hourly fees to value their services.

41.44% of consultants don’t have any retainer-based work, but would like to. With a monthly retainer, you’re working with & billing your clients every month. 14.26% of consultants have not done a performance deal and are not interested in this pricing strategy.

How Many Employees do Consulting Firms Have?

And while you don’t charge your employees for any of this infrastructure, they most certainly do benefit from it. That being the case, to the extent that each employee uses this infrastructure, a corresponding portion of the cost is really attributable to him or her. Depending on your consulting average consulting rates by industry fee structure, here is how to charge your prospects. You could double or triple your rate if you have appreciably more experience and expertise that can justify your rate in any niche. But if you’re trying to win your first client, you may need to consider what’s affordable for your prospects.

Setting consulting fees based on performance

For example, in Eastern Europe, the average IT consulting rate is $25-$50/h. Companies of all sizes turn to software consulting to stay competitive and turn technologies into a growth driver. However, if you require a high-level technical specialist, it is preferable to work with IT consultants. They are frequently more experienced and have in-depth technical knowledge in specific areas. For example, in a FinTech product, AI can be used to prevent fraud. For example, entry level developers earn $29/hour on average, while graphic designers just starting out earn about $15/hour on average.

If it costs you $30,000 on internet, electricity, telephone bill, transportation, and other expenses, you now have a total of $130,000. Either way, every business owner will opt for the best value for them, so ensure you can deliver as expected and track the ROI, and this route might just pay off. You may also want to include a quarterly review of your pricing structure and adjust it upwards if you win clients. For companies just getting started, a business plan is the perfect place to begin. With professional assistance and consulting, new business owners can map out their success strategy with a seasoned pro who will help them determine their goals and how to accomplish them.

The Project-Based Formula For Setting Your Consulting Fees

HR consultancy is considered a highly specialized field, and it pays much higher as an independent consultant. As per a ProMatcher cost report, here’s the cost to hire human resource consultants and advisors. The services the consultants render are tied to some expectations in terms of return on investment. Some of my peers sell one-time consulting calls and then upsell their other services through their agencies or partners. The reason most of them charge within the $150 – $300 hourly rage is the prospect of expanding a call into a long-term contract, thus the discounted rate.

Another way to make your plans more affordable is by going beyond one on one consulting. One-on-one consulting can be expensive as you have to dedicate your time to one person at a time. Not everyone will want to pay the high amount this requires. This is why instead of just offering one on one consulting/coaching you can offer other services such as group coaching. Another thing you might want to do is create different pricing plans and packages for your potential customers.