x-BCG Dubai consultant/interviewer/recruiting lead, current Manager at Uber
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What is ideal staffing rate of a consulting company ?

Anonymous A

How can we calculate the ideal staffing rate of a company with following information :

- Number of consultants : 150

- TJM : 3500

- Rentability : 15%

(edited)

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Vasilis
Expert
replied on 04/10/2017
x-BCG Dubai consultant/interviewer/recruiting lead, current Manager at Uber

Hello Anonymous,

This is a tough one. There is no ideal staffing rate really, since the difficulty and strategic importance of the project are crucial parameters in the staffing process. At BCG, we could overstaff a project that is very critical to us, in order to position ourselves better for future work. Similarly, we could understaff a project that we know is within our realm of expertise and would allow us to knock the ball out of the park without much effort.

Hope that makes sense!

Vasilis

Cyrus replied on 04/10/2017

Hi there, you need a few more parameters to calculate that. Basically it is the ratio between the charged hours and the salaried hours. A consultant also needs time for continuous education, trainings, interviewing candidates, holidays. Usually it is around 80%.

In this example, I think they wanted you to calculate the break-even point. If you have a consultant in France, starting level making 40kEUR let us just say, that means 167 EUR/day, let's assume 250 EUR with social expenses and miscellaneous.

The contribution margin for each day on project is 15%*3500EUR=525 EUR

Therefore if he is active at least 250/525=48% of the time, then the cabinet is not overstaffed. The staffing for the whole company is the weighted average of staffing rates.

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