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6 min read

Are you overpaying new joiners?

Our hiring market analysis shows a reduced pay gap in 2024; companies may be overpaying talent.

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Jamie Moroney

23 Oct

2024

Earlier in the year, our data showed us that it was *the best time to hire in a decade, with the highest level of interest per role we’d seen since COVID. We’ve conducted further analysis, looking at what the bearing this has had on compensation dynamics in the market.***

To find out more about hiring with Movemeon get in touch with our team here.

Using our proprietary data, we’ve analysed over one and a half million data points, and seen a seismic shift in the market. Two years ago, there was a large gap between the compensation candidates’ expected for a new job and how much employers were offering. Within just two years this has dropped to historic lows - suggesting that many companies “over-corrected” their salaries and are now effectively over-paying for new joiners.

In this article we look at how the compensation gap has changed over the last five years, driven primarily by supply-demand dynamics. We look at how this varies by company type, suggesting corporates have over-corrected their compensation, as well as Private Equity and Consultancies but for very different reasons.

Finally, we look at how this picture varies by alumni firm. McKinsey, BCG and Bain alumni have historically commanded a premium in the market, but we’re seeing early indications that this premium is decreasing. MBB expectations have only increased by a modest (and below inflation) level of 2% compared with 4% for the Big4 and 6% for boutiques.

Introducing the Movemeon compensation index and what it says about the market

Below you’ll see how the Movemeon compensation index has tracked over the last five years. We’ve analysed over one and a half million data points going back five years, looking at the gap between expectation and reality when it comes to comp. We see this as a measure of “friction” in the market, and an early indicator of inflationary pressures on wage growth.

For the numbers to make sense, it’s worth a quick recap of who’s in the Movemeon network;

It’s global: our 75k members are based across the world, with our main hubs in UK, France, DACH, Middle East, APAC and US
Everyone has worked in a leading consulting or accounting firm: 45% are ex-McKinsey, BCG and Bain; 30% are leading strategy firms; the remainder are the Big4
They are future leaders and Board members: it’s well documented that McKinsey is the largest future leader factory in the world. The number of ex-consulting and accounting professionals leading companies (from Fortune 500 to PE and VC backed scale-ups) is astounding

How to interpret the numbers:

0-25: There’s only a small difference between candidate expectations and compensation offered In other words, it’s a highly efficient market
25-50: There’s a manageable difference between candidate expectations and compensation offered.
50-75: There’s a marked gap between candidate expectations and compensation offered - a high friction market.
75-100: There’s a large and unsustainable gap between candidate expectations and compensation offered - a very high friction market
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Supply-demand in the hiring market is the driver behind the compensation dynamics

When we plot our hiring and compensation indexes together, it’s clear there’s a very strong causal relationship (an 85% negative correlation). The more in demand ex-consultants are, the more their compensation expectations increase, resulting in a larger compensation gap between job offers and expectations.

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Are you now over-paying for new joiners? The compensation gap is at an all-time low

Over the past 5 years, we’ve seen the gap between expectations and job offers hit historic highs of 22% in 2021, before falling way down to 6%, -9% below the historic average.

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We had assumed the drivers of the decrease in this gap were candidates re-adjusting their expectations downwards. This is historically what we’ve seen in very competitive hiring markets.

But this has not been the case. Over the past year, compensation expectations within our community have still increased at a healthy rate. The real driver of the expectation gap has been a very high increase in compensation being offered for jobs. This is clearly unsustainable in the longer-term, and feels like an over-correction in response to the higher consulting salaries and candidate expectations we saw in 2022-23.

For our latest salary information, you can view our benchmarking here.

Over-correction, hard to recruit talent, or paying for the best - how PEs, scale-ups, consultancies and advisories have reacted

When we look at our compensation index by company type, there are some very interesting trends.

Large corporates have a compensation gap of just 2%. This is much lower than historic averages, suggesting they have overcorrected compared with candidates’ expectations.

Scale-ups on the other hand have a gap of 13%. This is in line with historic averages and suggests that a focus on profitability combined with lower levels of VC-funding have ensured there hasn’t been an over-correction.

In the advisory space the picture is quite surprising. It’s been widely reported that it’s a tough market for consultancies, however, what our data shows is that those who are recruiting are prepared to pay a large premium - 8% in large consultancies, 5% in boutiques. We think this is being driven for two reasons: firstly, firms that are recruiting are growing, and as such are in a position to be paying for high performing (more expensive) talent; secondly, it is a hard market in which to attract ex-consultants given slow growth in the industry as a whole. To make it more appealing, bigger packages are being offered.

Finally, Private Equity is also paying a premium to outstrip expectations. This comes as no surprise and is also in line with historic norms in the sector. Private Equity is focused on attracting the very best, and as such is prepared to pay top decile compensations.

Compensation trends offer further evidence that McKinsey, BCG and Bain have been harder hit by the downturn than other strategy firms

When you look at how compensation expectations have changed by alumni firm, an interesting trend emerges. McKinsey, BCG, Bain alumni have seen the lowest increase in their expectations - a modest (and below inflation) figure of 2.3%. This is broadly in line with other strategy firms, but under half what we’re seeing alumni of boutiques and the Big4 demand.
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Despite the higher increase in expectation from boutique and Big4 alumni, McKinsey, BCG and Bain alumni are still paid a premium of over 12% compared to the median compensation.

If you’d like to find out more about how Movemeon can support your hiring, please get in touch.

6 min read

Why 2024 is the best time to hire in a decade

We analysed over one and a half million data points, to see what has happened to the job market over the past decade.

Nick Patterson

18 Sep

2024

Now is the best time to hire in over a decade, and is an opportunity to bring in once-in-a-decade talent - a seismic shift from just two years ago.
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We analysed over one and a half million data points to see what's happened to the job market over the past few years, a period characterised by rapid flux: Initially, quantitative easing and COVID drove The Great Resignation and the biggest war for talent we’ve seen since being in business. This market, highly favourable to candidates, was abruptly halted by high inflation and consequent sharp quantitative tightening. The higher cost of capital resulted in some pretty severe re-valuations and a tough trading environment. As a result, reductions in wage costs were required through job cuts and hiring freezes.

What does this mean for employers now? For those in a position to, it's a great time to hire rarely available and exceptional talent.
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Introducing the Movemeon hiring index and what it says about the market
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We use our proprietary data to give an overview of how favourable the hiring market is for employers. Our analysis also explores how this varies for different consulting firm alumni, and people moving into different industries: PE, VC-backed scale-ups and Corporates.

Below is how the index has changed over the last five years. For context, it's worth understanding who the Movemeon community are:

It’s global: our 75k members are based across the world, with our main hubs in the UK, France, DACH, the Middle East, APAC and the US
Everyone has worked in a leading consulting or accounting firm: 45% are ex-McKinsey, BCG and Bain; 30% are leading strategy firms; the remainder are the Big4
They are future leaders and Board members: consultancies make up six of the top eight "CEO factories" (companies whose alumni become CEOs of the largest businesses. And this isn't constrained to just large businesses, with a disproportionate number of unicorns founded by consulting alumni
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In terms of interpreting the numbers:

0-25: a very hard market to hire in. Focus on retention, as replacing people is going to be hard.
25-50: a hard market to hire in. Be proactive and start talent pipelining for key positions.
50-75: a good market to hire in. Start looking to take advantage of the market, and strengthen key positions.
75-100: an exceptional market to hire in. Look to bring in exceptional talent, that you’ll only get a few chances to snap up.
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The Great Resignation feels like a long time ago

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After COVID, Movemeon’s hiring index spent a year below 25. This was an incredibly hard time for companies to hire. Increased focus was on retention (compensation rises) and other effective ways to onboard talent (freelance).

During COVID, uncertainty meant hiring pretty much drew to a standstill. In parallel, there were some initial layoffs from industries that were hit hard by COVID. We saw the index reach some of its highest levels from March 2020 to August 2020 - a great market to hire for those in a position to do so.

However, this soon changed. Quantitative easing and large social support packages trickled through, and at a time when everyone was spending less. The resultant economic boom saw companies' hiring intensify. The Great Resignation poured further gas on the fire - with retention dropping sharply at companies. Our index dropped to some of its lowest sustained numbers between March 2021 and March 2022.

Throughout this period, companies were falling over themselves to attract the best candidates as the war for talent intensified. Salaries spiralled as the focus on retention intensified. The freelance market boomed as a quick solution to urgent capacity and capability constraints.

“You see who’s got swimming costumes on when the tide goes out”

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With hindsight, we now know this was (hopefully) a once-in-a-lifetime shock to the system.

Just three years on and the picture looks very different. High inflation and consequent quantitative tightening has meant we've gone from one extreme to another. Overhiring has resulted in more radical action in recent months around redundancies, wage reduction, job cuts and hiring freezes.

The tide well and truly went out and, as Warren Buffet would say, it has been a great indication of who had swimming costumes on! With very few companies hiring, and more people looking, the index went from a sustained period under 25 to 100 in just 10 months. It has sustained those levels ever since (although we're seeing some green shoots in Q1 2024).
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Have McKinsey, BCG and Bain been hit harder? Or do they just have more options?
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When we look at what this has looked like for the alumni of different consultancies, a very interesting picture emerges.

As you can see from the first chart, McKinsey, BCG and Bain went from some of the lowest numbers on the index to the highest number, in a matter of a single year.

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When we compare the difference between Q2 2022 and Q2 2023, we see that MBB and the Big4 saw the largest turnarounds in the market. Interestingly the smaller strategy houses and the boutiques seem to have seen less of a shift.

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The potential drivers behind this are complex.

It’s hard to determine whether the larger change in McKinsey, BCG, and Bain alumni is driven by just how in demand they were before, or just how many are looking now. Based on our initial analysis, it appears the demand factor plays the larger part.

For the current consultants, it has been reported that more people are being managed out of McKinsey, Bain and BCG than other firms.

For alumni, it’s more complicated. The hardest-hit sectors in 2020-21 (e.g., VC-backed scale-ups; PE post-deal) had a disproportionate flow of MBB consultants doing this type of work.

The other driver could simply be that they have more options. In a highly competitive market, their brands might mean there are still doors open to them. Leading them to be less willing to “sit through” their current work position and proactively look to move.

What we can say is that this is the best time we’ve ever seen to hire alumni from these firms.
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Corporates more popular than scale-ups; PE losing its talent edge
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We also analysed how this picture varies according to the type of business.

Even in the hiring frenzy of the Great Resignation - Private Equity was a competitive place to find a job. Numbers of people employed in PE has not kept track with growth in terms of assets under management and there has always been strong interest in moving into the sector.

Interestingly, over the last 6 months, we’ve seen the desire from candidates to move into the Corporate and Advisory sectors grow to the same level as into PE.

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Now is the best time to hire in a decade
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Returning to Warren Buffet’s old adage - those wearing swimming costumes can now take advantage. Companies in a position to take a through-cycle approach, and potentially sacrifice some margin in the short term have a once-in-a-decade opportunity to transform their organisation’s talent.

Consultancies are future leader factories. This has been well documented for years, and recently re-analysed by OnDeck. They looked at the CEOs of the largest operating companies in the US and saw where their alumni came from. We’ve copied the list of the top 8 below, 6 of which are consultancies.

Is now the best time for your business to hire its next CEO?

8 cards giving the percentages over CEOs that come from different companies

6 min read

Consulting careers - 11 insights on why people leave consulting & what they leave for

Our LinkedIn polls reveal consultants often leave for better work-life balance, targeting P&L roles or startups.

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Rich Rosser

18 Sep

2024

Every fortnight or so I run a poll on my LinkedIn. Given my area of expertise, the polls explore consulting careers (in and after consulting) - why people start, why they leave and what they leave for. Typically 600-1,200 people join in (a pretty decent sample size) and overall, these polls have been viewed by over 500,000 people with more than 15,000 participants.

Why do I do these polls about post consulting careers?

Well, unlike many more linear careers, most consulting careers involve leaving consulting. So for a consultant, plotting a career is a bit of a minefield. And if you're trying to hire consulting-trained professionals, how best to attract them can be equally mind-boggling. So, I find the results of these polls particularly enlightening. Why?

For employers (HR and hiring managers inside and outside of consulting firms), they unlock the secret sauce in retaining or attracting consulting-trained professionals (into roles like strategy, transformation, project management, commercial development, chief of staff etc) by shining a light on how most people think about their consulting careers.
For consultants, they shed light on how others in the consulting industry feel and behave and accordingly, give you clear references for plotting your consulting career - either in or away from consulting itself.

In this article, I've collated 11 recent polls into 3 topics:

Firstly: "Starting a consulting career - why?"
Secondly: "Leaving consulting - why?"
And finally: "Leaving consulting - what for?"

So, let's get into the data...

Starting a consulting career - why?

Summary: simply put, the majority of people who start a consulting career...

Don't regret the time spent in consulting (83%);
Didn't join intending for a lifelong consulting career (88%) / did join as a means to an end (skills, network);
Don't regret leaving consulting (93%) and;
Would have been more likely to stay / would return if pay, progression and, especially, working hours improved (80%).

Consultants & former consultants - do you regret the time you spent / are spending in consulting?

Results: (link to data)

When you joined a consulting firm, was it as a "means to an end", or did you envisage a whole career in a consulting firm?

Results below (link to original data)

Do you regret leaving consulting?

What's the main reason you'd consider switching consulting firms / moving back to consulting?

Leaving consulting - why?

Summary: simply put, the majority of people leave a consulting career (i.e, leave a permanent role in a consulting firm) in order to...

Improve their work-life balance / working hours which has..,.
Deteriorated further during / thanks to covid

What's the main reason you left / would consider leaving consulting?

Leaving consulting - was work-life balance the main reason (or would it be, if you were to leave in the future)?

Consultants - how has your work-life balance changed through covid? I'm working..

Leaving consulting - what for?

Summary: simply put, consultants transition their careers out of consulting along the following lines...

Scale-ups are the most sought-after company type, but the full range of organisations is appealing (the consulting skill set is extremely transferable so most options are open)
Most consultants want their career to end up in a P&L or operational leadership role (CEO/COO track) - the most successful companies at hiring ex-consulting talent can show a path to these (typically using strategy / transformation teams as a stepping stone / leadership talent pipeline)
Freelance consulting is becoming increasingly popular
Current & former consultants want more data when it comes to choosing post-consulting careers, especially regarding compensation and work-life balance. We're on a mission to provide that - check it out here.

Consultants - what company type do you find most appealing (as a post consulting home)?

Current & former consultants - what job type would you most like your career to lead to (or for more senior folk, which has it lead to)?

Freelancing - Are you more of less likely than 12 months ago to consider doing some freelance work?

Freelancing - are you more of less likely than 12 months ago to consider freelance work?

Would it be helpful to know which post-consulting careers have the best pay, working hours & job satisfaction?

Would it be helpful to know which post consulting careers have the best pay, working hours and job satisfaction?

Popular Resources

If you're trying to assess your options for a post-consulting career, here are some popular resources:

6 min read

The most popular career paths after consulting

Consultants often leave due to "up or out" models, lifestyle, and desire to own impact; find out what career paths are the most well-trodden.

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Rich Rosser

18 Sep

2024

Leaving consulting for other industries is more common than staying. There are numerous reasons for this, most notably according to our discussions with movemeon users and the data from the movemeon jobs board:

The pyramid structure at most consulting firms means there is an in-built bias towards leaving - often referred to as the "up or out" model.
Many people start consulting with every intention of leaving after a few years. It's a conscious means to an end (after building skills and network).
The lifestyle can be uncompromising. The long working hours and regular travel can be too much in the long term for many people.
The skill set developed in a consulting firm is extremely transferable and highly sought after by all organisations (from startups to multinationals to Private Equity to the 3rd sector). There are numerous classic "post consulting" roles/teams from in-house strategy & transformation, to Chief of Staff to revenue operations.
Many people want to "do" rather than "advise". The arms-length nature of consulting can become frustrating for many who prefer to own something and see their impact.

Which are the best career paths for alumni? Based on over 20,000 applications made on the movemeon platform, these are the top industries ex-consultants move to.

BIG CORPORATES

Big corporates are always looking for alumni. Experience in consulting will usually translate into you entering the company at a higher level compared with other people with your years of professional, but not consulting experience. The most typical function for consulting alumni is obviously strategy. However, our analysis of people hired through Movemeon indicates there are other interesting functions for ex-consultants, including operations and product management.

START-UPS

The world of start-ups is an interesting realm for consulting alumni. Compared to consulting firms, they have a very different environment and approach to work. However, the skills acquired in years of projects, data analysis and problem-solving make consultants perfect candidates for founding new start-ups or managing existing ones. This article offers some useful information for consultants who want to start a career in a start-up.

FREELANCE OR BOUTIQUE CONSULTING

After working for years in a consulting firm, even die-hard consultants, the ones who love every aspect of consultancy, might need a bit of a breather. They might also simply wish to be the commanders of their fortune. This is a prime reason why a lot of them decide to open boutique consulting firms or work as freelancers.

PRIVATE EQUITY OR VENTURE CAPITAL

Many consultants develop very strong financial skills during their years in consultancy. These skills prepare them very well and make them very sought after, by financially-minded institutions like private equity or venture capital firms. Consultants’ financial skills, matched with their strong strategic outlook and consulting ‘toolbox’, make these individuals the perfect candidates for PE & VC funds.

FAQs

What are the common challenges faced by consultants when transitioning to roles in industry?

Consultants encounter challenges transitioning to roles like big corporates (hierarchy, risk aversion), startups (flexibility, autonomy), freelance (independence, client acquisition), and private equity (due diligence, relationship building). Navigating skill set shifts, adapting to cultures, and managing work-life balance are common hurdles, demanding adaptability and industry-specific expertise for success.
Are there specific industries or sectors within big corporates that tend to attract ex-consultants more than others, and what factors influence their choices in joining a particular function, such as operations or product management?

Ex-consultants often pursue roles in internal strategy or corporate development in large corporations. Decisions are driven by personal interests, skills alignment, industry trends, and networking. Roles in operations, supply chain management, corporate finance, and technology-driven transformations are also popular.
Is there a gap or difference in work culture between consulting firms and start-ups? Are there any specific tips or insights for consultants looking to make a successful transition to the start-up environment?

Consulting and start-ups vary in culture, with consultancies being structured and risk-averse, while start-ups are dynamic and flexible. Transitioning consultants should adapt by being hands-on, entrepreneurial, and developing technical skills. Networking, assessing cultural fit, and embracing ambiguity are vital. Successful transitions require comfort with risk and a genuine passion for the start-up's product or service.

Explore current opportunities on Movemeon.com
Solve a business challenge, hire a Movemeon professional
Join 30,000+ following our Co-Founder, Rich for regular insights on life in and after consulting

Take a look at another popular article: Which pays best, staying in consulting or leaving?

6 min read

Private Equity Firms: what questions should you ask?

Overlooking crucial questions when job hunting can lead to disappointment in the future and Private Equity firms are no exception.

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Quentin Toulemonde

18 Sep

2024

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Given the intense competition, receiving an offer to join a private equity firm is quite a significant achievement, and the temptation to accept the offer as soon as you receive it without having done any proper due diligence is thus huge. Overlooking this crucial step of the job-hunting process can lead to serious disappointment in the future and the fast-moving private equity industry is no exception in that respect.

Below are 29 questions that you should ask to ensure you make an enlightened decision.

Fund strategy & positioning

How many funds and/or product lines does the firm operate?
More and more Private equity firms are diversifying their activity to include hedge funds (i.e. public market investing) or debt vehicles. Each business line requires a particular approach and investment strategy. As a consequence, this can give you a feel for the variety of the work (in terms of investment type) that you will face. Beware though; like any organisation, a firm that spreads across too many lines is likely to feel a bit disorganised.
What kind of assets does the company invest in? There are primarily two types of assets in private equity: companies and infrastructure. Again, referring to the first post of my series, the nature of the work differs between those two environments.
What is the fund's investment strategy? Each fund will more or less strictly position itself within a spectrum going from "distressed" (i.e. underperforming and close to bankruptcy) to "glamorous" or "high-growth" assets. The price paid but more importantly, the type of work and situations you will encounter will depend on the strategy. In a distressed fund, you should expect to be involved in heavy restructuring and cost-cutting programs. In a growth context, you will spend much of your time finding ways to develop the business' top-line.
What is the size of the fund? What is the fund's sweet spot in terms of enterprise value or equity cheque? As mentioned in the first post of this series, the type of work you will do will significantly differ if you join a small-cap (<$250m roughly), mid-cap ($250m to $1bn) or large-cap fund. The equity cheque (i.e. the amount the fund itself invests in a given company) is intimately linked to the fund size since a fund will typically make between 8 and 20 investments as well as to the enterprise value sweet spot since roughly 50% of the acquisition price will be paid by raising debt.
Which stage of the company's lifecycle does the fund invest in? As mentioned in an earlier post, private equity funds as a whole cover the entire company lifecycle, from birth (seed or VC) to maturity (LBO). You should expect VCs to be more "gut-feel" based whereas LBOs require deeper due diligence and involve a significant amount of financial structuring (absent in VCs which very often can only raise equity).
Where is the fund present? Where does the fund invest? On one hand, a global fund will limit country-specific risk exposure. On the other hand, the more global the fund, the more you will have to travel - especially if the office network is relatively loose, e.g. only one office to cover the whole of Europe.

Practically speaking, the geographical remit is defined in two ways. First, investors sign a term sheet that formally defines the areas where the General Partners (or "GPs", i.e. the members of the private equity firm) can and cannot invest. Second, and more importantly, GPs have their own "comfort zone", which is often a subset of the theoretically authorised area. This question is important for you as it will determine the amount of travel you can expect from this job as well as the extent of the cultural gap you may face when meeting with management teams.
What kind of industries does the fund invest in? The majority of funds are "sector-agnostic" and will invest indifferently in all industries. Some (most often smaller ones) have specialised in one or a handful of industries, typically Retail or Tech.
Does the fund do minority and/or majority deals? By definition, if the fund only does minority deals it will rarely be able to exert full control over the company and therefore you should expect more time to be spent on the due diligence - to ensure that the business "as it is" is a good one. This situation is relatively rare in private equity as opposed to hedge funds
Is the fund committed or raised on a deal-by-deal basis? A committed fund will offer more stability and less dependence on market conditions. Furthermore, a firm seeking investor funding on a deal-by-deal basis may feel the pressure to invest regularly to keep momentum with investors, even if the climate or opportunities are not optimal.

Track record

When did the firm raise funds for the last time? This question will give you a feel for the type of work you will be doing. If the fund is recent (less than 2-3 years), you should expect to spend most of your time sourcing deals and executing investments for this new fund. If the fund is older, portfolio management ("harvesting") should take a growing share of your bandwidth.
Has the firm raised more than one fund? First-time funds can appear attractive because of their entrepreneurial nature and their subsequent potential. If the first fund is successful the second will be larger and the team will grow, potentially creating "upward gaps". However, growth in private equity is more often achieved through external hiring rather than internal promotion, so you should always consider career upside potential with a bit of caution.
How does the actual fundraising amount compare with the fundraising target? In the current environment, with liquidity being more than abundant, a fund not meeting its fundraising target has run out of favour with investors and such momentum is very difficult to reverse, so I advise you to stay away. Some funds exceed their target, but many will stop when they reach it in order not to overstretch their teams.
How does the latest actual fundraising amount compare with previous actuals? Fund growth is a clear indicator of momentum and expected team size evolution. In particular, if the firm has been raising a decreasing amount of money, it means investors are less and less convinced and, unless the firm manages to come up with a series of mind-blowing investments, you should expect the trend to continue and therefore the team to keep shrinking.
How have previous funds performed? Given the illiquid and long-term nature of private equity (funds have a 10-year lifespan), it takes time for struggling funds to be entirely wiped out of the market. An early indicator consists of benchmarking the latest funds' IRR. If those IRRs are disappointing, it will only be a matter of time before investors are free to switch their funds to another destination.
Has the fund made recent investments? A fund may decide to slow or fasten its investment pace depending on market conditions. However, a fund that has not put any money to work over the last 18 months is more likely struggling to source interesting deals and this should raise a flag.
How fragmented is the Limited Partner (or "LPs", i.e. investor) base? I am always concerned with "one-LP" funds where one investor has the practical right of life and death over the fund. I believe this not only creates uncertainty about the future of the fund in case of headwinds (both at fund and investor level) but also there is a risk of seeing the LP interfering with investment decisions (creating useless friction).

Operating model

How large is the firm globally? In London? A classic question. All funds started with very small teams and an entrepreneurial spirit, but some have grown so much that this early flavour may have disappeared quite significantly.
Are there other offices? If so, where? Where are the headquarters? What is the role of London? The worst case for you is to join a US-based fund which considers London (and Europe in general) as non-core to their strategy and as such does not give you a lot of consideration and does not involve you in the investment decisions. Fortunately, London is a strong financial place and such situations are rare (at least rarer than if you were applying in Paris or Madrid).
Are there investment committee members based in London? Building on the previous question, a negative answer will likely indicate that the office has been primarily set up to perform local sourcing and execute deals when told by the headquarters, which reduces the amount of autonomy you will enjoy and subsequently the interest of the job.
How is staffing decided? Are there teams dedicated to particular geographies/industries/product lines? This question will help you assess whether you are going to develop particular expertise or whether you are going to remain quite a generalist. Both approaches have their own pluses and minuses, but in any case, you would like to ensure that your prospective employer does not plan to specialise you in an industry you do not fancy.
Is there a dedicated operations team? If so, how large is it, what are its remit and background? If an operations team exists, you should expect to be consequently less involved in commercial and operational aspects of the due diligence and/or portfolio management.

People & culture

Where do people come from? PE professionals typically come from a mix of investment banking, consulting, accountancy/Transaction Services and Corporate. The way of approaching investments is influenced by this background.
How would you define the fund's culture? Some funds have an American culture, which as a Frenchman I would define as direct and energetic, others have a more British inclination, softer and possibly more political. This does not mean that one is generally better than the other but you need to make sure that the culture fits your way of working and interacting with others.
How many (net) additions to the team have there been in the last 24 months? In the investment team alone? The "fund size evolution" question, should help you assess the momentum the firm is benefiting from. A shrinking team is almost always a bad sign - the fund is losing momentum or struggling to attract talents to fill the gaps.
How many people have left the fund over the last 24 months? If you exclude "defined-length" contracts (such as the Associates program), churn should be low: jobs in private equity are rare, and people tend to stick to their seats if their role is interesting and if they believe the firm has decent future prospects. If churn is high (say more than 30% of the firm was renewed over the last 2 years), at least one of the two previously mentioned conditions was broken.
Who are the senior sponsors of the fund? Each private equity fund is chaired and/or advised by highly respected individuals within the investment industry. Such personalities act as a stamp of approval and tend to facilitate fundraising. Conversely, you should proceed carefully with not or weakly endorsed funds.
Can I meet the rest of the team? Private equity firms are small companies and the personal fit is even more important than in consulting - imagine that you will spend many years working with the same people on a series of projects. I thus encourage you to meet as many team members as possible to assess this fit.

Compensation and career path

Who has access to carried interest? How is carried interest computed? Carried interest (i.e. the performance fee that general partners receive when their investments generate an IRR in excess of a certain threshold) amounts to a very significant share of your compensation, especially at senior level. Always useful to know when you will be entitled to receive a share of the pie. Most often carried interest is computed and shared at fund level; however, a few funds (e.g. CVC Capital Partners) are famous for their "deal-by-deal carry structure".
What is the typical career path? You need to understand whether there is a "glass ceiling" that you will never be able to go through. Many US funds have formal fixed-term Associate programs which imply that you will need to leave after 2-3 years. Other funds may encourage investment professionals to leave once they reach a given tenure if there is no room for additional senior managers or partners. In any case, you should feel free to ask for specific examples.

FAQs

What are the potential drawbacks or challenges associated with joining a private equity fund that has recently raised funds (less than 2-3 years old), and how might the job responsibilities differ in comparison to joining a more established fund?

Joining a private equity fund that has recently raised funds (less than 2-3 years old) may involve a greater emphasis on sourcing deals and executing investments for the new fund. This could mean a higher focus on building the fund's portfolio and establishing its presence in the market. The nature of the work may lean more towards the early stages of fund management, with portfolio management gaining prominence as the fund matures over time.
How can I assess the cultural fit within a private equity firm, especially considering the different cultural inclinations between American and British-founded funds mentioned in the post?

Assessing cultural fit within a private equity firm involves understanding the underlying cultural dynamics, such as American or British inclinations. For instance, American cultures might be characterized as direct and energetic, while British cultures may be perceived as softer and possibly more political. You should consider your own working style and preferences to ensure alignment with the cultural nuances of the firm, as this can significantly impact job satisfaction and collaboration.
In the context of private equity fund size and fundraising, what are the implications for my career progression and job responsibilities based on whether the fund exceeds its fundraising target, stops at the target, or falls short of the target?

The fundraising performance of a private equity fund can influence career progression and job responsibilities. If a fund exceeds its fundraising target, it might indicate strong investor confidence and potential team growth, creating upward career opportunities. Conversely, a fund that falls short of its target may face challenges, potentially leading to a shrinking team. Understanding the fund's fundraising success provides valuable insights into its momentum and the trajectory of the team, helping candidates make informed decisions about their long-term career prospects.

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Careers after consulting

Consulting

1. Wieso hast Du dich zu Beginn Deiner Karriere für das Consulting entschieden?

Ich komme eigentlich aus einer Zahnarzt-Familie, habe mich aber nach dem Abitur für ein BWL-Studium an der WHU entschieden. Hier kam ich dann relativ schnell mit dem Thema Consulting in Kontakt, da einige Beratungen Unternehmenspräsentationen an der Uni abgehalten haben. Für mich klang das sehr spannend. Die Beratungsarbeit ermöglicht Einblicke in unterschiedlichste Themengebiete und Industrien. Außerdem haben mir die Menschen hier sofort zugesagt – jeder ist sehr ehrgeizig, lösungsorientiert und möchte neue Dinge lernen.

Nach meinem Bachelorstudium habe ich eine Art ‚Gap year‘ eingelegt, um Einblicke in verschiedene Unternehmen zu bekommen, unter anderem Consulting. Da ich weiterhin überzeugt von der Arbeit in der Beratung war, habe ich mich dann nach meinem Master an der LSE für eine Karriere im Consulting entschieden und insgesamt knapp 6 Jahre bei Simon-Kucher und der Boston Consulting Group gearbeitet.

2. Was hat Dich in Deiner Zeit in der Beratung am meisten geprägt?

Simon-Kucher war ein super Einstieg in die Beratung, um das berühmt-berüchtigte “Berater-Toolkit” zu erlernen. Hier habe ich mir viel Methodenwissen, beispielsweise die richtige Strukturierung von Präsentationen und Projektmanagement angeeignet.

Der Schritt zu BCG ermöglichte mir, Beratung nochmal aus einer neuen Perspektive kennen zu lernen. Neben meinem “Steckenpferd” für Pricing, waren dort vor allem die Dynamik der Projekte und das Kennenlernen einiger weiterer Industrien für mich prägend.

Verstehen, strukturieren und priorisieren – das habe durch meine Zeit bei BCG definitiv verinnerlicht. Außerdem war das internationale Kollegium für mich sehr inspirierend. BCG hat eine beeindruckende Industrieexpertise über ein großes Expertennetzwerk. Durch meine Zeit in der Beratung, habe ich sehr deutlich gelernt, wie wichtig eine gute Teamzusammenstellung und eine cross-funktionale Arbeitsweise ist.

3. Wie verlief dein weiterer Karriereweg?

Die Corona-Zeit hat mich sehr zum Nachdenken gebracht. Fernab der vielen Ablenkungen des Alltags und durch die globale Krise wurde ich dazu angeregt, zu reflektieren, an welchen Themen ich langfristig mitgestalten möchte.

Während meiner Zeit bei BCG habe ich vermehrt in der Technologiebranche und dem Gesundheitssektor gearbeitet. Technologie hat mich schon immer fasziniert, da sie Effizienz bringt und Strukturen schafft. Die Arbeit im Gesundheitssektor reizte mich schon immer und die Corona-Krise hat das natürlich noch einmal verstärkt. Healthtech kombiniert diese beiden Bereiche ideal für mich. Dann wurde ich auf die Chief of Staff Position bei Doctolib aufmerksam. Das hat einfach super gepasst.

4. Wie kann man sich die Arbeit als Chief of Staff vorstellen?

Die Chief of Staff Rolle ist sehr vielschichtig. Oft spricht man auch von dem “Schweizer Taschenmesser” oder dem “Öl im Motor der Maschine”. Du bringst eine Vielzahl an unterschiedlichen Fähigkeiten mit und bist somit flexibel einsetzbar. Wichtig ist, dass Du ein wirkliches Interesse für cross-funktionales Arbeiten hast und nicht in Silos denkst. Letzten Endes bist Du für einen reibungslosen Ablauf im Unternehmen zuständig.

Als Chief of Staff sorge ich dafür, dass jede Interaktion des CEO so wirkungsvoll wie möglich ist und er seine Zeit und Energie optimal nutzen kann. Das kann zum Beispiel bedeuten, dass ich seine Agenda priorisiere, Projekte ad-hoc für ihn übernehme, die richtige Kommunikation im Team sicherstelle oder Meetings abnehme.

Daher sind eben die Soft Skills auch sehr wichtig. Ein Chief of Staff sollte ebenfalls den emotionalen Subtext einer Situation lesen können. Du bist kein Top-Down-Manager, sondern musst ein Gespür für Teams haben und intuitiv Entscheidungen treffen können.

5. Welche Skills aus dem Consulting helfen Dir in Deiner aktuellen Rolle?

Immens viele! Mir fällt jeden Tag aufs Neue auf, dass mir sehr viele Skills, die ich im Consulting verinnerlicht habe nun tagtäglich helfen!

Das beginnt bei meiner persönlichen Organisation und geht über strukturiertes, effizientes und zielgerichtetes Arbeiten im Team sowie die flüssige Beherrschung von (IT-) Tools bis hin zu Soft Skills wie Teamführung und kundenorientiertes Denken.

Consulting steht für mich nach wie vor für eine extrem wertvolle Ausbildung und ich bin sehr froh, dass ich dieses Toolkit nun in der Healthtech-Industrie zum Einsatz bringen kann.

6. Welche Tipps würdest Du Consultants geben, die aktuell über ihren ersten Schritt aus der Beratung nachdenken?

Ich würde zuerst empfehlen, die Zeit im Consulting zu nutzen, um sich Methodenwissen und die sogenannten “Hard Skills” anzueignen. Das wird Dir in allem was danach kommt extrem weiterhelfen! Außerdem macht es für viele Kollegen Sinn, auf verschiedene Projekte gestafft zu werden, um unterschiedliche Problemstellungen kennenlernen zu können wie z.B. Topline vs. Bottomline Projeke, Orga, Restrukturierung, etc..

Ich glaube nicht, dass es den einen “perfekten” Moment gibt, um das Consulting zu verlassen. Jeder sollte sich bewusst Gedanken dazu machen, mit welchem Skillset er oder sie die Beratung verlassen möchte. Falls beispielsweise Projektleitungserfahrung im nächsten Job erforderlich ist, lohnt es sich gegebenenfalls, ein bisschen länger im Consulting zu bleiben.

Außerdem hilft es, offen für Angebote zu sein, beispielsweise von Recruitern. Im Beratungsalltag fällt es oft schwer, die Zeit zu finden, über Möglichkeiten außerhalb des Consultings nachzudenken. Nehmt Euch definitiv Zeit, einen Schritt zurück zu gehen und zu reflektieren, ob das aktuelle Arbeitsumfeld noch die richtige Umgebung für die Entwicklung in Richtung Eures langfristigen Karriereziels ist.

Zu guter Letzt würde ich noch das Thema Netzwerk erwähnen. Egal ob ehemalige Studienkollegen oder Consulting-Alumni – hier schlummern oft sehr viele interessante Berufsperspektiven und auch entferntere Bekannte freuen sich immer, wenn sie Euch unterstützen können.

5 min read

What to pay a new hire - Freelance (2023)

In this guide, you'll find out what to pay a freelancer you hire for your business or team when calculating how much to pay them.

Movemeon

18 Sep

2024

5 min read

Consulting careers - 11 insights on why people leave consulting & what they leave for

Our LinkedIn polls reveal consultants often leave for better work-life balance, targeting P&L roles or startups.

‍

Rich Rosser

18 Sep

2024

Why do I do these polls about post consulting careers?

For employers (HR and hiring managers inside and outside of consulting firms), they unlock the secret sauce in retaining or attracting consulting-trained professionals (into roles like strategy, transformation, project management, commercial development, chief of staff etc) by shining a light on how most people think about their consulting careers.
For consultants, they shed light on how others in the consulting industry feel and behave and accordingly, give you clear references for plotting your consulting career - either in or away from consulting itself.

In this article, I've collated 11 recent polls into 3 topics:

Firstly: "Starting a consulting career - why?"
Secondly: "Leaving consulting - why?"
And finally: "Leaving consulting - what for?"

So, let's get into the data...

Starting a consulting career - why?

Summary: simply put, the majority of people who start a consulting career...

Don't regret the time spent in consulting (83%);
Didn't join intending for a lifelong consulting career (88%) / did join as a means to an end (skills, network);
Don't regret leaving consulting (93%) and;
Would have been more likely to stay / would return if pay, progression and, especially, working hours improved (80%).

Consultants & former consultants - do you regret the time you spent / are spending in consulting?

Results: (link to data)

When you joined a consulting firm, was it as a "means to an end", or did you envisage a whole career in a consulting firm?

Results below (link to original data)

Do you regret leaving consulting?

What's the main reason you'd consider switching consulting firms / moving back to consulting?

Leaving consulting - why?

Summary: simply put, the majority of people leave a consulting career (i.e, leave a permanent role in a consulting firm) in order to...

Improve their work-life balance / working hours which has..,.
Deteriorated further during / thanks to covid

What's the main reason you left / would consider leaving consulting?

Leaving consulting - was work-life balance the main reason (or would it be, if you were to leave in the future)?

Consultants - how has your work-life balance changed through covid? I'm working..

Leaving consulting - what for?

Summary: simply put, consultants transition their careers out of consulting along the following lines...

Scale-ups are the most sought-after company type, but the full range of organisations is appealing (the consulting skill set is extremely transferable so most options are open)
Most consultants want their career to end up in a P&L or operational leadership role (CEO/COO track) - the most successful companies at hiring ex-consulting talent can show a path to these (typically using strategy / transformation teams as a stepping stone / leadership talent pipeline)
Freelance consulting is becoming increasingly popular
Current & former consultants want more data when it comes to choosing post-consulting careers, especially regarding compensation and work-life balance. We're on a mission to provide that - check it out here.

Consultants - what company type do you find most appealing (as a post consulting home)?

Current & former consultants - what job type would you most like your career to lead to (or for more senior folk, which has it lead to)?

Freelancing - Are you more of less likely than 12 months ago to consider doing some freelance work?

Would it be helpful to know which post-consulting careers have the best pay, working hours & job satisfaction?

Popular Resources

If you're trying to assess your options for a post-consulting career, here are some popular resources:

5 min read

What is it like to be a Chief of Staff?

The Chief of Staff job is very popular. So how do you land one, what's it like to be one & how does the job change in small vs big companies?

Movemeon

18 Sep

2024

Aidan Curran trod a familiar path before becoming a Chief of Staff. After graduating from business school, he spent three years in strategy consulting for LEK. He then made the shift into the industry to join Penfold, a workplace benefits and pension management platform.

In just over a year and a half with the company, Aidan has gained valuable insight on the ever-changing nature of the Chief of Staff role, one which has transformed as the company itself has grown.

https://www.youtube.com/watch?v=uFn809qJ_vQ&t=24s

How would you summarise the Chief of Staff role?

It’s really dependent on the company you’re at, their stage and size. I’ve been here for 18 months. In that time we’ve grown from 25 to just over 80. Also the role has changed drastically as the company has changed.

Right now I have three broad areas of responsibility. First: if we’ve got a genuinely new venture or idea, that doesn’t have a BAU functional team responsible for it, I’ll investigate whether there’s an opportunity there and understand what it would take to run with that going forward.

Secondly, I help out in the functional teams themselves, either leading on a project or jumping in with a team that’s under-resourced. Finally, I play a broad support function for the business, managing our People and Office Manager and taking the day to day lead on our finance and accounting function.

Interested in becoming a Chief of Staff? Register as a candidate on Movemeon.com and view all open CoS roles.

What was it like when you first started?

It was very different. It now feels quite structured and grown up compared to when I joined. Now, I’m more like an extension of the founding team, making the leadership team as effective as possible, shaping OKRs at the company level. That’s really a reflection of the fact that with 25 people 18 months ago it was very founder-driven. Whereas now it’s a much more mature business with clearer functional leadership and established managerial processes.

Was the OKR structure in place when you joined?

No, we’ve been doing it for 6-9 months now, and we’re still iterating on the way we do it, but it’s absolutely integral to the alignment between our teams now. On an accountability level, there’s so much stuff that we could be doing that just nailing down the 2 or 3 really important things we want to move the dial on in that quarter, and focusing on those key metric ladders up to the entire business doing well.

How is your working relationship with your founders?

A lot changed since I joined. Now, every other week we have an hour in the diary to go through my priorities, how I’m getting on with my own personal OKRs, anything that I need help unblocking and how I'm progressing.

But also, I’ll talk with one of the founders on the phone at least once a day. The other is in the office most days so there’s a pretty organic checking in.

What skills does an effective Chief of Staff need?

There are four big areas that are really important. All closely related, and all very much relating to a consulting background.

One is prioritisation. You need to be able to understand the context you find yourself in, the opportunities and problems which you face, and be able to make sure that you are doing the most impactful thing with the finite amount of time you have. You’ve got so many things you could be doing, so many problems to solve, that making sure that you’re doing the most impactful ones is super important.

Then there is problem solving. Although we’re a pretty small business, a lot of the problems we’re tackling are still very complex. Being able to walk into a situation, understand all the moving parts, and really get to the bottom of what’s causing a problem or finding areas to improve is really important.

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Organisation is massive. Consulting might seem fast-paced, but really you’re on one project at a time, it’s all very hierarchical and clear in terms of what needs doing, by whom, and when. It pales in comparison to being across all the context of a business and juggling all the things that are happening there. So being absolutely on top of really basic things like your inbox, your to-do list and your objectives is really important.

The fourth attribute, but by no means the least important, is strong EQ. Often if you’re helping someone address a problem, they’ll have been working on that area for a very long time. They might have been the first person to start doing sales or operations in this business. If you come in and tell them they’ve done 17 different things wrong, that’s incredibly aggravating and incredibly blind to the context, which is probably a brilliant generalist trying to do something from scratch for the first time. It’s no good telling them what the problem is: they probably already know that. So being really sensitive and not throwing around any intellectual plays or being unnecessarily unclear, just rolling your sleeves up, being sensitive, and just trying to be helpful, is so important.

What type of person is best suited to being a Chief of Staff?

It’s a really good question! I think you need to be very organised, and very relaxed with a slightly chaotic style, particularly if you’re going to work closely with founders and trusted with their most important topics and challenges. This is their job, but they’re also staking something so much bigger on this by taking the risk of running a business. So all the things they’re trusting you with are really big topics. They’ll throw around a lot of ideas and different problems, some of which are going to be felt very intensely. You need to be quite relaxed about it.

To summarise, you need to be organised as well as emotionally resilient. I imagine that if you found it stressful to have lots of things going on at once and not be able to get all of them done, it would be quite difficult.

What are the best aspects of being a Chief of Staff?

It’s a bit like consulting in that I don’t have very many fixed remits, it’s all quite project based. I really like the continuation of being involved in lots of different stuff, for quite short periods of time, and then seeing them through to completion. There’s very little monotony and routine, so that’s really positive.

I love the feeling of involvement in shaping an entire business. In consulting you might be involved in a big five year strategy planning exercise, but whether that was still being used six months after you left, you don’t really know. In a start-up, you’re making very big decisions and you’re involved in conversations at a very high level around what this business is going to do. And because it’s so small, you see that stuff happening as soon as you walk out of the meeting. So the level of impact you’re having is massive.

Consulting can be quite a homogenous environment with lots of similar types of people. I really like working around lots of different types of people. It’s incredibly refreshing to see people with real domain expertise, functional expertise, and very different ways and working styles from me, and to be able to learn from them. I’m finding that a hugely enriching part of my job.

Any final thoughts on being a Chief of Staff?

I so infrequently take a step back and reflect, so I miss all the positive things. Every 3-6 months when I do performance reviews there’s some self-reflection, but week by week, if I haven’t hit all my to do list or something massive came up and everything got reprioritised, you always feel like you’re fighting an uphill battle and it’s incredibly stressful. But if you take a step back and think about what you’ve achieved and the impact you’ve had it feels absolutely massive.

So taking a step back, separating the day to day, minute by minute stress and intensity of the role, and reflecting on all the positive things you’re getting out of it is something that I have to remind myself to do. I’d advise anyone considering the role to do the same. And the fact that you have to do that is also indicative of what the role is like!

Interested in hiring a Chief of Staff for your team? Get in touch with one of our experts.

[hubspot portal="25392842" id="24161966-77f0-499d-9230-0f71cee62bf7" type="form"]

About the author: Dan McEvoy is a freelance writer and editor, with extensive experience in finance, technology, HR, recruitment, and marketing content.

5 min read

How to Overcome the Most Common Start-Up Challenges

The most commonly-faced start-up challenges, from hiring key talent to formulating an effective strategy, and how they can be overcome.

Movemeon

18 Sep

2024

Growing a new business, in amongst the fun and excitement, presents a series of intense challenges. Here, we'll delve into the most common hurdles that start-ups typically encounter: from cash flow constraints that can cripple operations to the complexities of finding and hiring the right talent, and the crucial decision-making required for crafting a winning strategy. Overcoming these challenges effectively is the key to success for any budding business.

Cash

Top of the list for any start-up is cold, hard cash. Businesses come into this world without any revenue streams. Some might be able to start generating revenue quickly, but others (such as biotech firms) may need to dedicate years to R&D before there is any product that can be sold.

In either instance, it could be a long, long time before the company breaks even, and throughout this period the existential challenge for any start-up is managing cash flow to ensure it remains a going concern.

There are, effectively, two ways in which start-ups can solve the cash problem.

Acquire funding. This is the only viable option for companies that will take years to generate revenue, but many other start-ups also look to external investment in order to jump-start their growth. VC or PE firms can boost a start-up’s warchest, but often at the expense not only of material ownership, but also of a degree of control over the business on the part of the founders.

Be a cockroach. Alternatively, companies can adopt a slower rate of growth, prioritising survival at all costs. This involves careful marshalling of what resources they have, in order to preserve start-up capital as long as possible. Ideally, cockroach start-ups will only spend money they have already earned. While this approach works for businesses that don’t want to resort to external funding, it is also the strategy adopted by many VC-funded companies.

Hiring

While the founding team can, to a certain extent, wear multiple hats and achieve a lot during a start-up’s early years, there will inevitably be knowledge and skills gaps within this team. Perfecting the product, implementing a marketing strategy, and scaling a sales function may all call for additional skills or headcount.

With cash a limiting factor, though, making the wrong hire early on can have devastating consequences for your business. Furthermore, the time taken in sourcing candidates, reviewing CVs, and interviewing can be draining on the limited resources of a founding team.

With the stakes so high when considering early hires, a cost-effective solution is to partner with a recruitment expert in your field. The right partner can at once expand your total network, while refining your interviewing pipeline to only the best-suited, most engaged candidates for the position, saving you valuable time qualifying and interviewing the wrong candidates.

With a network of over 60,000 former-consultants, half from MBB firms, Movemeon are well-placed to partner with start-ups seeking strategy hires. Get in touch here!

Are you a candidate, looking for a new opportunity? Join Movemeon or log in here!

Product / Market fit

There are really two challenges here: identifying the problem, and building a viable solution.

Successful start-ups set out to address a real problem. Identifying this problem is, however, easier said than done. It is a common fallacy for start-up founding teams to focus on the solution; the product, after all, is the exciting part, but building a product that no-one wants is a surefire route to ruin.

Successful start-up founders are best advised to focus their early efforts intently on identifying the problem they are trying to solve.

Once this is done, developing a MVP is the next key step; bringing this to market not only starts generating revenue, but if feedback is gathered from early adopters, it can inform future improvements of the product with the goal of achieving PMF.

Strategy

Strategy pervades all these challenges. Managing cash flow will depend primarily on the go-to-market strategy; hiring the right staff at the right time depends on the plan the start-up is trying to execute, while establishing PMF is intimately bound up in the company’s overall short- and long-term strategy.

Framing all of these challenges effectively requires thorough strategic thinking, including a keen attention to the product’s potential competition and market demand. There is also the arduous task of building a brand from scratch, without any prior awareness of the offering within the target audience.

Start-ups must overcome all these challenges and more if they are to be successful. Hiring an in-house strategy expert early on can help businesses plan for the future with the right tools and expertise.

Movemeon is expert at partnering with start-ups and scale-ups, connecting them to ex-consultants the world over that can provide vital strategic insight to overcome their hardest challenges. Find out more here!

About the author: Dan McEvoy is a freelance writer and editor, with extensive experience in finance, technology, HR, recruitment, and marketing content.

5 min read

Earning & investing - What taxes are impacting you more now

Charlie Channing-Williams works in wealth management and clarifies what taxes are impacting you more now in terms of earning and investing.

Movemeon

18 Sep

2024

What do I need to know?

In the most recent Autumn Budget, Chancellor Jeremy Hunt announced a number of changes that will impact your ability to achieve your lifetime wealth ambitions.

From 6 April 2023, the main personal tax changes to be aware of are:

The reduction in the threshold above which the 45% additional rate of tax is payable
The reduction of the tax free dividend allowance from £2,000 to £1,000 (and further reducing the following year)
The reduction of the CGT exemption from £12,300 to £6,000 (and further reducing the following year)

Why does it matter?

These changes mean that in the current environment, making the best use of tax-efficient wrappers such as pensions and ISAs is all the more important.

In addition, if you earn between £100,000 and £125,140, the tapering of the personal allowance means you could end up paying 60% tax.

This 60% ‘tax trap’ isn’t published in any HMRC guidelines because it’s an unofficial effective rate of Income Tax. It occurs due to the tapering of the personal allowance for higher earners.

The result? Those earning between £100,000 and £125,140 can end up paying 60% tax.

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What to do?

It all starts with you, taking into account your personal goals and circumstances:

What are your ambitions for the future?
What’s most important for you to achieve?
When do you want to do these things?

Write down your answers, and then look at your current plan. Is it on track?

Could or should you be doing better – better planning, better efficiencies, better understanding?

Speaking with a professional adviser can give you clarity on your options and work with you to tailor a plan that works towards your ambitions.

Tax rules change frequently but financial advice can help make sure you stay tax-smart, and always pay what you owe, and no more.

Are ready to hire, looking for more information about hiring or just want some advice? Get in touch and one of our team of friendly specialists will get in touch within 24hrs.

Author of this article

Charlie Channing-Williams provides bespoke financial advice to individuals, families and business owners. He does this this through lifetime wealth planning, based on their unique circumstances and ambitions.

charlie.channing-williams@sjpp.co.uk | +44 (0)7778 708968 | www.channing-williamswealth.co.uk

Important note

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances.

Channing-Williams Wealth Management is an Appointed Representative of and represents only St. James's Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group's wealth management products and services, more details of which are set out on the group's website www.sjp.co.uk/products. The 'St. James's Place Partnership' and the titles 'Partner' and 'Partner Practice' are marketing terms used to describe St. James's Place representatives.

SJP APPROVED 26/4/2023

Click here to view all articles and read about the latest industry and consulting insights on our blog.

5 min read

Pension power – Maximising your future ambitions

Charlie Channing-Williams works in wealth management and clarifies how you can maximise your future ambitions regarding your pension.

Movemeon

18 Sep

2024

Do you know where all your previous pension pots are and are they aligned with your future plans?

One risk that people face when moving companies is losing track of their paid-up pensions. It can make sense to review your old pension pots for a number of reasons.

Firstly, knowing what the total value of all your pension pots are will help you plan your future work timeline – when you could reduce or stop working, and what kind of lifestyle it could support.

Secondly, what are you invested in? Does it suit your timeframe and ambitions, your risk appetite and plans for the future? Often you’ll be invested in generic funds that assume you’re a standard profile – does that suit you best? Probably not.

Thirdly, circumstances change and your need for advice. Your situation and outlook on life will be different in five, ten and 15 year’s time. Having the advice to help you navigate those changes, and being proactive with your pension investment decisions, can be crucial to make sure your ambitions don’t leave your plans behind.

Finally, when it comes to accessing your pension, having it in one place can make life easier, giving you oversight of your available options and the ability to discuss how it can best suit your needs, alongside the benefit of regular reviews and ongoing advice in case of future legislation change.

Are you a candidate and looking for a new job? Click here to view all current jobs on Movemeon.

Are you making the most of your pension contributions?

A pension is the most tax-efficient vehicle available to UK savers, subject to certain limits because the government typically adds relief to your contributions. This boost essentially increases the value of every pound you pay into a pension.

Recent changes to legislation have meant that for some people, they have become an even more valuable and tax efficient way to invest for their future:

Increase in the Annual Allowance – for the 2023/24 tax year onwards, you can contribute up to £60,000, or 100% of your earnings (whichever is lower), for tax-relieved contributions. This is up from £40,000 the previous tax year.
Removal of the Lifetime Allowance – this was the total tax relieved pension savings you could accrue in your lifetime, with anything over and above this being taxed. Any charges that would have been due in current tax year have been removed, before the abolition of the Lifetime Allowance from April 2024.

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About the author

Charlie Channing-Williams provides bespoke financial advice to individuals, families and business owners. He does this through lifetime wealth planning, based on their unique circumstances and ambitions.

charlie.channing-williams@sjpp.co.uk | +44 (0)7778 708968 | www.channing-williamswealth.co.uk

Important note

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances.

SJP APPROVED 26/4/2023

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5 min read

How many CEOs have a consulting background?

How many corporate and public CEOs started in consulting? We explore the data behind consultancies’ claims to be “leadership factories”.

Movemeon

18 Sep

2024

One of the many reasons that people start their careers in consulting is that it’s seen as a training ground for the business leaders of the future. McKinsey in particular leans into this typecasting, describing itself as “one of the world’s largest leadership factories”.

Do the claims stack up? What research has been conducted into the claim took place in the early part of the last decade, but the short answer is: yes, it does. Movemeon has complemented this research with a more up-to-date look at leadership within the FTSE 100 and the UK’s start-up unicorn scene, and the evidence suggests that former management consultants are still disproportionately likely to lead successful businesses.

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We took a look at the data in more detail, and heard from one former McKinsey consultant who has gone on to found his own business, and invest in others.

CEOs

Movemeon research reveals that 9% of current FTSE 100 CEOs have a background in consulting. This means they outnumber those who are Oxbridge educated (5%), or who have worked in a large accounting firm (8%). USA Today previously found that McKinsey alumni were more likely than those of any other company to lead a $2bn+ business, Deloitte coming second on this list.

Having employed 3% of FTSE 100 CEOs, McKinsey is the single firm with the largest leadership footprint. The firm previously reported (in 2015) that 450 of its global alumni were running companies valued at $1bn or more. These included Oliver Bäte, CEO of Allianz, and Jørgen Vig Knudstorp, CEO of Lego.

McKinsey alumni also prevail in public and non-profit organisations. Isobel Coleman, Deputy Administrator for Policy and Programming at the United States Agency for International Development and former ambassador to the UN, started her career at McKinsey, as did 2014’s World Mayor Prize winner Naheed Nenshi.

Not all of McKinsey’s “successes” are praiseworthy. Jeff Skilling, the CEO in charge of Enron during its accounting scandal, for which he served 12 years in prison, started out at McKinsey.

On the whole, however, consultants tend to have a beneficial impact on the organisations they lead. HBR showed, in 2013, that former management consultants that became CEOs improved company performance during their tenure in 71% of cases, verses 42% for CEOs without a consulting background.

Company founders

Consultants are also disproportionately likely to run their own businesses, exhibiting an entrepreneurial streak as well as the business fundamentals to succeed in the perilous world of start-up survival.

Movemeon’s research found that, of the 63 British-founded businesses to have achieved unicorn status, 16% were started by founders with a background in consulting. With 1.6% of unicorn founders as alumni, McKinsey at first looks over-represented again – however, due to the sample size, this represents just a single founder (Matt Robinson, founder & CEO of GoCardless).

However, McKinsey believes its consultants do have a tendency to start their own businesses. One in four go down this route according to its Thirty Thousand Leaders blog, which lists Innocent Drinks and MetaPack among the businesses to have been founded by McKinsey alumni.

Movemeon previously spoke to one such consultant: Srećko Džeko. Džeko left McKinsey in 2019 to co-found construction material marketplace Simplo before moving into venture capital where, he says, many of the most successful founders he encounters also have consulting backgrounds.

He makes a link between the kind of people that are attracted to a career in consulting and those cut out to succeed as founders: “People who go into consulting in the first place are often overachievers and strive for change. They then get into this big machine that teaches them many things, like problem solving, top-down communication, execution, and project management.”

The end result? “A commercial allrounder with the right mindset and work ethic, something that is much needed in founding teams.”

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McKinsey is not alone in producing business leaders. Crunchbase counts 556 startups founded by BCG alumni, and 505 by those of Bain.

McKinsey, however, stands out as having successfully established its brand as “the CEO launch pad”, celebrating its role as the training ground of the business leaders of the future. As its former global managing director Dominic Barton put it, the organisation cares about the success of its alumni because “it is a measure of how we develop leaders.” In other words, McKinsey more than any other consultancy, or company, sets out to produce tomorrow’s leaders, and brands itself accordingly.

All former consultants will share the skills that make McKinsey alumni effective leaders for organisations. Their ability to think strategically and execute under pressure can help any organisation, from start-up to large corporate, which is why they so frequently soar through the ranks into leadership positions. To discuss hiring a strategy expert for your business, through a company founded by McKinsey alumni, speak to Movemeon today.

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About the author: Dan McEvoy is a freelance writer and editor, with extensive experience in finance, technology, HR, recruitment, and marketing content.