Some thoughts on career models and compensation

Warning serious rambling post (you will recognise these by the absence of a picture to start the post!)

Last Friday I attended the KL office Partners (now called "Senior Executives") and Managers meeting and a fair portion of the discussion was our compensation and the Senior Executive Career Model. One of the challenges facing the firm is that it has become more difficult to make the jump to Senior Executive whereas the relative compensation of a "Junior" Senior Executive is not really much different from that of a "Senior" Senior Manager. The question then arises whether it is worth it to make that jump at all. Accenture used to be a private partnership (hence the term "Partner") and making it to Partner was a really big deal, as you were then a part owner of the firm and you collectively made decisions on the future direction of the firm without having to get the approval of external shareholders. Now, however, as a public listed company with over 150,000 employees, making it to Senior Executive (SE) is really not the same - you have all the additional responsibility, but you are still just another cog in the wheel.

All this would not be an issue except for the following feature of career progression in Accenture's consulting workforce, which is that rising through the ranks from analyst to consultant to manager to senior manager (SM) is fairly automatic (you may be a little faster or a little slower than average, but you'd have to be seriously flawed to get kicked out - most people leave on their own due to lifestyle choices or better compensation as a contractor). Then you have this huge barrier from SM to SE, which involves being responsible for several million $ of revenue on a sustainable basis, amongst other requirements. That used to be worth aiming for back when the firm was a private partnership, however the targets and expectations are now no longer commensurate with the package, at least at the lowest "level of responsibility".

So what seems to be happening, at least in Malaysia, is that everyone is making it to SM and not really seeing an attractive proposition after that. The revenue for the Malaysia office can only support a limited number of SE's and even if we achieve our growth targets there will be quite a lot more Senior SMs qualified for promotion than promotion slots according to business need. Managers and SMs seeing the writing on the wall are leaving the firm as a result.

I think several things need to happen before this situation can be improved:
1. Think about making SM a landing point - or else do away with "automatic" promotion at levels below SE.
2. Start having an equity portion of base compensation, not just at SE level but even at M/SM level.
3. Start teaching even analysts and consultants about the revenue requirements and get them to understand the P&L for their projects.

All three of these points above are really meant to make it clearer to all consulting workforce employees (not just SEs and SMs) what makes the firm tick and instill some ownership mentality even amongst the ranks of analysts and consultants. Otherwise there will be 2 Accentures - one for SEs and one for everyone else, with the non-SEs not really sure how to get to SE and why they should want to.