When deciding which contract to accept, consultants will often choose the one with the higher take home rate, even if the benefits offered with another opportunity outweigh the difference in compensation. This happens because it is difficult to compare offers while factoring in the benefits.
Every consultant should strive not only to boost their hourly rates, but also the benefits received, thus maximizing the total amount of money that stays in their pockets. Firms offer a very broad scope of benefits, ranging from nothing to full benefits comparable to full time position, and it can be challenging to quantify the monetary impact of each offer.
To help visualize benefits in terms of their dollar value to a consultant, we will use Honeydew’s benefits as an example of how much money they can amount to.
Benefits
We at Honeydew pride ourselves on providing our consultants with a wide variety of benefits, enabling consultants to focus on providing excellent work for our clients. To illustrate the impact that benefits can have with respect to total compensation, we will start by showcasing the various insurance and peripheral benefits that Honeydew employees receive, followed by an approximate per-hour value added by each. This information can then be used to compare consulting contract offers. Please keep in mind that the benefits we offer differ from other firms.
Honeydew offers company-subsidized insurance, which helps save additional dollars that you would otherwise spend on the open market. The monthly cost of health insurance varies depending on a variety of factors such as the type of plan you choose, where you live, your income, or if you need insurance for a single adult or an entire family.
| Company Sponsored Benefits | Employee Subsidized Premiums (2022 Average per Consultant) |
| Health Insurance | $8,160.00 |
| Dental Insurance | $440.28 |
| Vision Insurance | $107.40 |
| Long-Term/Short-Term Disability | $785.64 |
| Total Dollars Saved | $9,493.42 |
| Peripheral Benefits | Company Contributions (2022 Average per Consultant) |
| 401k contribution | $5,652.00 (3% employer contribution w/o need to match) |
| Profit Sharing | $1,940.00 |
| Tech Fund/Bonus | $874.00 |
| Wellness Benefit | $500.00 |
| Additional Compensation | $8,966.00 |
Different consulting firms find ways to keep their rates competitive, often by reducing the peripheral benefits offered and providing partially or non-subsidized insurance options. Using the Honeydew benefits as an example, we can consider some example scenarios with different offers. For these comparisons, it is helpful to think of insurance and peripheral benefits in terms of a per-hour amount, since consulting contracts are often negotiated in these terms. Assuming a 2080-hour work year, Honeydew’s company sponsored insurance benefits equate to an additional $4.56/hour in saved income, and the peripheral benefits come in around$4.31/hour in added income. Together these constitute an added value of just over $8.87/hour.
Like with any other job, different firms and opportunities offer different levels of compensation, whether it be higher take-home rate with fewer benefits, or lower take-home rate but more benefits. As a consultant, it is critical to look at the bigger picture of what benefits are offered to ensure that you can capitalize on each opportunity.
While the benefits we offer are not identical to what other firms offer, we hope that we can provide some insight into what else to factor in when choosing your next opportunity, or even the best questions to ask when determining how much money you can save when evaluating potential firms or contracts.