How consulting firms use commission and bonus to drive sales, reward partners, and motivate consultants.
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The consulting industry has a unique approach to variable compensation. With annual US revenue exceeding $300 billion and thousands of consultants in sales-oriented roles, commission and bonus play a central role in compensation structures. From management consulting to IT advisory, models vary significantly.
This page explains how commission structures work in consulting, which roles have variable pay, and how modern commission administration can support growth and motivation.
Consulting firms use several types of variable compensation:
For dedicated salespeople and business developers, commission is paid based on sold projects:
| Project Type | Typical Commission |
|---|---|
| Strategy/Management | 3-8% of project value |
| IT Implementation | 2-5% of project value |
| Outsourcing/Managed Services | 1-3% of first-year contract value |
| Staff Augmentation | 5-15% of gross margin |
Many consulting firms use an origination credit system where the person who brings in the client or project receives credit. This converts to bonus at year-end. Typically 5-15% of project value as origination credit.
Partners in consulting firms often participate in profit sharing. This can represent 30-70% of a partner's total compensation and depends on firm performance.
Business Developers: Dedicated salespeople focused on new business. OTE of $120,000-200,000 with 40-60% variable component. Top performers can reach over $250,000.
Partners: Senior owners with sales responsibility. Total compensation of $300,000-1,000,000+ depending on firm size and performance. Profit sharing typically comprises the majority.
Managers/Directors: Often have sales elements in their bonus. Typically 10-30% of salary as variable based on team performance and personal sales.
Consultants: May have bonus tied to utilization rate, project performance, and client satisfaction. Typically 5-15% of annual salary as potential bonus.
The consulting industry uses extensive bonus programs:
Annual Bonus: Most firms operate with annual bonus based on multiple factors: firm profitability, practice performance, and individual goals.
Project Bonus: Extra bonus for successful delivery of large or strategically important projects. Can represent 5-20% of normal bonus.
Referral Bonus: Bonus for bringing new consultants to the firm. Typically $2,000-10,000 per successful hire.
Accelerators: Higher commission rates for overperformance. Example: 5% commission up to goal, 8% on everything above.
The consulting industry has unique complexities:
Many consulting firms tie bonus to utilization rate. Typical targets:
Standard: 70-80% utilization to qualify for full bonus.
Overperformance: Bonus multiplier for higher utilization or bill rate.
Quality: Client satisfaction (NPS, feedback) often carries 20-30% weight in bonus calculation.
Varies enormously. Junior partners at mid-size firms earn $250,000-400,000. Senior partners at large firms can reach $1,000,000-3,000,000 or more depending on profit sharing.
Typically not direct commission, but bonus based on performance, utilization, and client satisfaction. Business developers and partners have more direct sales-based compensation.
Most firms pay annual bonus in Q1 after the fiscal year ends. Some have quarterly partial payments.
Typically on bookings (signed contracts), revenue (billed amount), and margin. Some firms also measure pipeline and win rate.