1. EXTERNAL BENCHMARKING IN
COMPENSATION
Studying the compensation strategies at Ernst and Young vis a
vis other major consulting firms
SUBMITTED BY:
Ritu Kapse: 12 HR 024
Shishir Swaroop : 12 HR 028
Shitanshu Singhal: 12 HR 029

2. Flow of the Presentation
What is External Benchmarking
About Ernst and Young
Company Structure for a consulting firm
Job Description for a Consultant
Salaries across the Big 4 Consulting Firms
Salary Break-up for Ernst and Young
Review of Employees
Compensation Strategy
Sources of Data

3. What is External Benchmarking
 Process of comparing an organization’s
current policies and practices to that of a
competitor organization(s) to determine
current and future trends in areas of
employment and business practice
 This helps in designing a suitable salary
structures in the sector
 It therefore helps to attain two-fold
objectives :
- Attract and retain the right kind of
talent
- Control Company Costs

4. About Ernst and Young
 Ernst & Young (trading as EY) is
a multinational professional
services firm headquartered
in London
 Third largest professional services
firm in the world by aggregated
revenue in 2012
 Provides services in
assurance (including financial
audit), tax, consulting and advisory
services to companies
 709 offices in 140 countries.
 India’s Head office is in Gurgaon

5. Ernst and Young

6. Company Structure for a consulting firm
MD/CEO
PARTNER
MANAGER
CONSULTANT
ANALYST/ASSOCIATE

7. Job Description for and EY Consultant
 Develop Client needs, use cases, system
requirement specification
 Gather non-functional requirements for
the project
 Support development and testing team
during development.
 Review system test cases
 Review user manual, help files and training
material
 Work with user experience team in
developing story boards
 Assist functional teams during user
acceptance testing.
Ernst and Young charges $59 for each hour of a consultant’s work to the
client but pays the consultant $5.47 per hour of work.

8. Salaries across Big 4 Consulting Companies
1100000
1050000
1080000
1020000
1010000
1000000
950000
919000
900000
850000
Figures in
INR
800000
Deloitte
EY
PWC
KPMG

9. Salary Break Up
Sales
Basic Pay
Cash Bonus
Tips
1%
135188, 14%
859761, 85%

10. Compensation Strategy
Tightly controlling pay around a
desired market positioning: The key
measures for this strategy would
include compa ratio and market
percentile. In this case, an emphasis
on measuring compensation expense
ratios or performance differentiation
would send the wrong message and
promote the wrong behavior.

11. Compensation Strategy
 Salary : Lag Strategy - Hire below the median Pay Scale
 Skill development
- Believes in developing the employees for suitable roles after hiring
them.
- e g : Tied up with ISB Hyderabad for management programs to be
taught to high performing associates and analysts.
 Career/Growth Opportunities
- Believes in Promoting rather than External Hiring
- Does not go for campus hires for Consultant Profile
Recruit majorly for Analyst and Associate roles and then
them to Consultants
promote
 The firm, unlike other Big 4 firms is majorly into
“Process and Performance management.”
- Hence they tend to hire people who are Problem Solvers rather than
recruits of other consulting firms who are more in an advisory capacity

12. Review from Employees
We analysed the reviews posted on Glassdoor, of 50 current and Ex- employees at Ernst and
Young designated as Consultants.
Consultant Reviews
3.5
4.5
4.5
3

13. Sources of Information
 Glassdoor.com
 Payscale.com
 Ernst and Young Associates
 Wikipedia
 ey.com
 linkedIn.com
 SIHRM