How can we calculate the ideal staffing rate of a company with following information :
- Number of consultants : 150
- TJM : 3500
- Rentability : 15%
(edited)
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
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.
I didnt get 15% in your calculation. Also if you assume a consultant costs 167 a day and paid 40 k, you assume that he is working 240 days and not 221. Why ? Many thanks — saline on Apr 10, 2017 (edited)
The 15% was given by the person who asked this question, read the top of page. The numbers are arbitrary, what counts is the logic. — Cyrus on Apr 11, 2017
The case study is the most important element of the case interview, which you'll have to nail in order to get into strategic consulting. Here you can learn the specific skills and concepts necessary to solve them.
1 Q&AIn order to repeatedly demonstrate prerequisite skills under the pressure of a real case interview, you need to learn the basics and practice cases.
1 Q&AOur client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US. The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadvant ... Open whole case
Espresso Whatelse is an Italian company that produces coffee and espresso machines since 1908. It is the Italian market leader and has a strong presence overall in Europe. In 2019, Espresso Whatelse has increased its revenues but it has seen declining profit margin. Your client wants to understand ... Open whole case
Problem definition: Our client is Korean Car Parts (KCP), a multi-national original equipment manufacturer (OEM) of car parts based in Korea. They've recently seen a decline in profits and have brought us in to understand how to address this falling profitability. Open whole case
Sky China, a government-backed Chinese airline, has recently seen profits plummet due to COVID-19. Profits are down 80% in the months of February and March, but are showing early signs of a rebound in April. They've brought you in to first investigate what can be done immediatedly to prevent hemor ... Open whole case
You and your family are faced with a challenging set of decisions. Due to coronavirus, your partner has taken a 20% paycut and you are worried you may lose your job. In addition, while daycare is still open, you are worried that sending your two children there will increase the risk of them bringing ... Open whole case
Case in Point: The Perfect Preparation for the Case Interview in Consulting 
CoachingPlus 5 
