Salary vs. Wage?

So a friend of mine who is going into Accenture received a revised job offer the other day for MCDP Business Analyst. Instead of a salary of $70k with no overtime. She will now be paid $33.66 an hour for 2080 hours a year. This equals to $70k except they now get overtime at 1.5x hourly rate.

Given most in the consulting industry works 60 hours a week, in theory, your yearly comp could be closer $125k ($70k base + ~20 hours a week at overtime pay). In practicality, it means nothing because Managers and above of going to highly "recommend" that analyst only mark down they worked 40 hours a week. And so, what is the point of this move by Accenture? Also generally speaking, what do you believe to be a better system of compensation, salary or wage, and why?

 
Best Response
brooj14:
In practicality, it means nothing because Managers and above of going to highly "recommend" that analyst only mark down they worked 40 hours a week.

Is this just speculation on your part. The practice you described is highly illegal, and I seriously doubt a company as large and sophisticated as Accenture would set themselves up for a class-action suit like that.

brooj14:
And so, what is the point of this move by Accenture? Also generally speaking, what do you believe to be a better system of compensation, salary or wage, and why?

I have no idea what the actual motivation is, but several other professional service firms (e.g. PwC and KPMG) have faced class-action lawsuits for misclassification of low-level employees as exempt and failure to pay OT. On the other hand, most consultancies don't take this approach, so it's tough to say.

http://www.kcrlegal.com/class-action-certified-against-PwC.aspx

 
brj:
brooj14:

In practicality, it means nothing because Managers and above of going to highly "recommend" that analyst only mark down they worked 40 hours a week.

Is this just speculation on your part. The practice you described is highly illegal, and I seriously doubt a company as large and sophisticated as Accenture would set themselves up for a class-action suit like that.

Having managers highly "recommend" that you only bill 40 hours was common practice at Deloitte except that it was 45 hours for us. Technically this was against firm policy, but it was how things worked on almost every project I was on in my 2 years there. The saying was "Bill what you work and work what you bill" and then your Manager or SM would wink and tell you to bill 45 hrs. If you questioned this, it would lead to a very uncomfortable conversation where they tell you that if you are working more than 45 hrs a week, then its time to discuss whether you are working efficiently or not (even if whole team is clearly working 60+). Essentially, if you bill more than 45 hours, it screws up the projects financials, as the project budget (and fee quoted to the client) is worked out based on 45 hours per consultant. No SM or Partner wants to go to the client and say "I told you $1.2M, but its actually going to be $1.6M b/c we are working 60 hrs instead of 45". Even partners and managers that I really enjoyed working with (and respected as people) were bound by this shitty system, and only in rare cases would there be exceptions.

Not a lawyer, but I don't think this is illegal, just a bit unethical. Its not like it resulted in billing a client for hours that were not worked (in fact it is the exact opposite scenario). That being said, it was a super frustrating from my perspective because one of the metrics that I was evaluated on was the # of hours I billed per year. This means that I got equal credit for working 60 hrs per week (and billing 45) as the person who worked 45 hours per week (and billed 45).

 

MCDP is Accenture's management consulting development program. not a bad program. it's a tier above system integration (e.g., IT).

This is an interesting one. The only thing i'll add is that for billing, it's definitely OK and legal to bill for only 40 hours per week despite working more. The policy on this varies by company, but in my experience, for MBB you bill 40 hours per week when staffed, unless you're more senior (e.g., partner/principal) in which case your billability varies by project.

No idea how getting paid by the hour would work.

 
BigPicture:

MCDP is Accenture's management consulting development program. not a bad program. it's a tier above system integration (e.g., IT).

This is an interesting one. The only thing i'll add is that for billing, it's definitely OK and legal to bill for only 40 hours per week despite working more. The policy on this varies by company, but in my experience, for MBB you bill 40 hours per week when staffed, unless you're more senior (e.g., partner/principal) in which case your billability varies by project.

No idea how getting paid by the hour would work.

"Billing" for only 40 hours as a salaried worker when working for over 40 and being paid for only 40 as an hourly when working for over 40 are entirely different things. The latter situation is highly illegal and if it were a systematic practice at any firm the class action lawsuit would be an open and shut case. Absolutely no way Accenture is creating a policy to purposely encourage hourly workers to accept less money than they should be paid.

 
BigPicture:

Thanks for the data points, devildog. Do you report your actual hours, or do you bill your actual hours? Reporting and billing are very different.

Edit: tagging @devildog2067

To my knowledge, all MBB bill a flat monthly rate for a team regardless of hours worked. I've never seen a proposal where the fee depends on hours worked (at least at my MBB). So the hours billed doesn't matter to the client--it is used only for internal tracking purposes to manage burn out, workload balance between team members, etc.

And the timesheet practice depends on which manager you're working for. Technically, you're supposed to report actual hours. But there are multiple factors (senior level comp, reputation, wanting to avoid conflict with leadership, etc) that have led people I know at all MBB to put down fewer hours than they actually worked.

 
BigPicture:

Thanks for the data points, devildog. Do you report your actual hours, or do you bill your actual hours? Reporting and billing are very different.

Edit: tagging @devildog2067

Both, although there is an accounting separation between billing the "standard" number of hours to the case, and billing your hours over that number (they get charged against a different account).

 
brooj14:

With all that has been said, why would Accenture make this move and set themselves up for paying first year analyst $125k? Their expenses are going to increase and revenue is going to take a hit. As a publicly traded company, that's not really something you want to do.

You need to confirm whether MCDP BA's work the same number of hours as the "industry average." If they work closer to 45 hrs/wk (as an hourly worker you wouldn't bill for lunch time) on average then all of this is moot.

 

brooj14, when is your friend going start working/did she already start working? I have a friend who started working at Accenture already who received the revised job offer last month. He was really perplexed over "but, where's the catch in all of this?" while another friend who doesn't start until September was really perplexed over why she didn't get a revised job offer from Accenture. Are they splitting the MCDP analysts up into two separate compensation systems?

 

@"Jennjennjenn" She starts in August...I'm still puzzled by this new comp system. It might be something they are rolling out so they are sending out the revised job offer by start date so July starts will get it before August starts who will get it before September starts etc. Or ACN fiscal year ends August 31st so it might be something for FY14 starters only and FY15 (starting September 1st and on, do not get it). Not sure how they are working it out...makes me want to call back Accenture and accept their offer after all lol. I'm going to ask my friends that are Managers and up, what's going with this new comp program.

 

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