Interview for Network Consultant Position - Split $/hr rate?

TLDR: Two different hourly rates: non-billed vs billable & questions at bottom

I applied and received a call from a recruiter hiring for a small network consulting business - around a dozen employees. Met with the headhunter this week and they scheduled me an interview with the business owner later this week.

It's a very JOAT focused consulting position. Sounded like the recruiter couldn't find many candidates with my varied experience who will work for the pay they are offering.

The HR recruiter said the pay is variable between billable hours and non-billable hours. The concept makes sense but it's not something I've heard of before. The billable hours rate is more than double the nonbillable pay.

They estimated 12 hours nonbilled and 28 hours billed for average not including any overtime. Some quick math averages that to around $20.50-21.40 an hour or $42640-44500 a year.

I'm not sure how I feel about the base rate being less than I currently make. The average should still be somewhere around a %35 pay jump though if their estimated billed hours per week is correct.

Has anyone else heard of a system like that?

Any advice on insight questions I can ask the owner? I have a general list but I've never interviewed for a consulting business and unsure what all I need to ask. Thanks

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Comments

Bokeh

Yep, worked a position like that many years ago. When in office got paid x amount, if I was on site with a customer, it was xx amount. Was actually quite common in the Dallas area back in late 90s.

networker050184

I personally haven't worked this kind of arrangement, but I would be very hesitant to take it. There is no guarantee on how many billable hours you will get (if I'm understanding you correctly) so there is a real possibility you end up with pay cut. Something to definitely take into consideration is if you can live off the non billable pay if the work slows for a few weeks.

ptilsen

In consulting firms and service providers billable hours are usually a big target, sometimes the only target. Industry standards for MSPs tend to be 70-80% billable of a 40-hour week, though in my experience a 40-hour week is a joke. I worked 50-60 most weeks at my MSP position, but I was paid a salary with a commission on billed time, rather than a variable hourly rate. I can tell you I would have greatly preferred a variable hourly rate.

I would take it if the position looks right to you. Even if they're way off and you're only 50% billable, it should still be a pay raise. I would bet on the other direction, with at least 30 billable hours on average. Without knowing the details I would also assume it is hourly exempt -- meaning overtime is not a concept. You get paid for more than 40 hours put not at time-and-a-half. Perhaps I'm wrong there but I would verify.

The biggest risk here is that it's a lot of non-billable overtime at that base non-billable rate (which is what, $14.50 or $15?). Again, I don't think that's a huge risk, and it's still overall better than a salaried position with long hours where you make no incremental pay at all. I would put a worst case scenario at you work 50 hours a week and make $46,000 - $50,000 yearly. Ask yourself if that's an appropriate workload and rate. If it is, then I think you have your answer.

Edit: I should add, depending on the firm, you might be expected to get a certain bill rate. The risk there is if you aren't billing enough you can get fired. Make sure you have the drive to get work done during business hours. This is not a trivial thing. If they expect a certain billable number and you can't deliver you're screwed. It's really no risk if you're driven and have the aptitude.

Pishof

Bokeh; Thanks. I've only done corporate work so I'm unfamiliar with consulting firm business practices.

Networker; I was/am hesitant on the variable pay rate idea but even a conservative estimate puts this at a significant salary increase. (I'm working well below market for my role even in the same industry.)

ptilsen; Thanks for the write-up, lots of helpful info there. From dealing with other consultants, I assume there would be potential for overtime as they worked 60-80 hour weeks during busy seasons.

I am a major saver and have no children so I could weather any slow seasons and have the freedom to put in overtime. Conservatively I could see a 35-40% compensation increase if their estimates aren't grossly exaggerated on billed hours. An interview with the owner will answer any concerns I have hopefully.

sieff

I'd pass on this opportunity. Just doesn't add up. I work for consulting firm and my pay is the same whether I'm on the bench for 3 weeks or out billing a full 40 hour week for any number of weeks. its not the consultants fault if you're not billing time, that's a sales issue.

sratakhin

Pishof, $20/hr for a network consultant is too low even in Midwest. What state (or city) are you in?
It may be an increase from what you are making now, but did you consider moving somewhere else?

hostingbadger

I agree with stratakhin. $20.00/hr is too low.

ptilsen

I disagree. I made more than that, but I was in a senior position. Most of the staff at my organization probably made close to that -- some made less. That is standard pay for a junior-level "consultant" position at an MSP. Don't let the word consultant fool you. A better title might be "Field Systems Engineer". While it's true that there is a consulting aspect to it, don't let that fool you on what the job is.

OP is looking at a 35% raise, possibly more like a 50% raise depending on bill rates and overtime. The experience will also be very valuable. My recommendation based on OP's response is to take the position, and stay there 2-4 years depending on how compensation works out and how happy OP is, then move on to something more specialized.

Pishof

I know in many areas $20/hr gross might weak but it would be a significant increase for me. It's a 3 hr drive minimum to civilization other than the tiny city(large town) I live in. There are a small handful of decent corporations here but IT openings are scare and fill up fast because of limited opportunity.

Everything here is typically who you know or moving up internally. I've been lucky to come out with the wide experience I have but at the sacrifice of making any decent wage.

I am concerned about the bill rate gamble, but conservative estimates still make it such a significant increase so it's probably worth the risk.
I do think it would be around $21-23/hour before any overtime.

Thanks ptilsen- considering the circumstances, that is likely what I would do. It really depends on what sort of work they plan on having me do. If it's mostly helpdesk type support I'll pass but it's being advertised as a general network tech/consultant.

hostingbadger

ptilsen wrote: »

I disagree. I made more than that, but I was in a senior position. Most of the staff at my organization probably made close to that -- some made less. That is standard pay for a junior-level "consultant" position at an MSP. Don't let the word consultant fool you. A better title might be "Field Systems Engineer". While it's true that there is a consulting aspect to it, don't let that fool you on what the job is.

OP is looking at a 35% raise, possibly more like a 50% raise depending on bill rates and overtime. The experience will also be very valuable. My recommendation based on OP's response is to take the position, and stay there 2-4 years depending on how compensation works out and how happy OP is, then move on to something more specialized.

In reading this response, I think it's probably more fair than my initial post. I have been static for a while (10 years) so I need to adjust perspective a little. I was also fortunate in my 1st consulting position and my locale doesn't hurt when it comes to compensation. I think the happiness factor is probably the most important issue. I took a position with premium pay that I eventually jumped ship from to a 30% salary decrease. I was/am much happier and the salary is good (not 150k premium, but good).

Pishof

hostingbadger wrote: »

I think the happiness factor is probably the most important issue. I took a position with premium pay that I eventually jumped ship from to a 30% salary decrease. I was/am much happier and the salary is good (not 150k premium, but good).

Good point. The main goal is generally to be happy. I like my current job but it's not offering compensation sufficient to meet my financial goals. Modest house in a safe neighborhood with a privacy fenced backyard. Patio for grilling, garden for my SO, and yard left for the dog. Maybe a hot tub if I'm feeling really fancy.

If I can find a position that will meet those goals with a bit leftover for the yearly vacation I'd be satisfied. Would much rather work a 45-50k job that I'm content with than a stressful 100k job dealing with bureaucratic sociopaths all day.

taternuts666

Pishof, may I ask where you are located? Your salary averages sound very close to that in my area.

NotHackingYou

If you wound up unhappy because of either lots of non-billable pay (sounds like around $15/hr?) or tons of overtime, how hard would it be for you to switch back to a regular hourly job making close to what you make now? How big of a dip is the non-billable for your current rate?

Pishof

taternuts666 wrote: »

Pishof, may I ask where you are located? Your salary averages sound very close to that in my area.

Located in the southern half of Indiana. The tri-state area is generally low COL so tech salaries and opportunities are scare and lower paying on average. Around here, you're known as doing well to make 11-12$ out of school with a bachelor degree.

CarlSaiyed; Great question. I don't think it would be too difficult for me to find a position around 34k (still better than I make now) if I were absolutely miserable and had to get out quick with only a few months to search. The difficulty is finding anything 38k+ that doesn't have too many qualified applicants to compete with.

The non-billable rate is a negotiable amount with the upper range about what I make at the moment. The billable hour pay would be a massive increase.

NotHackingYou

Pishof wrote: »

Located in the southern half of Indiana. The tri-state area is generally low COL so tech salaries and opportunities are scare and lower paying on average. Around here, you're known as doing well to make 11-12$ out of school with a bachelor degree.

CarlSaiyed; Great question. I don't think it would be too difficult for me to find a position around 34k (still better than I make now) if I were absolutely miserable and had to get out quick with only a few months to search. The difficulty is finding anything 38k+ that doesn't have too many qualified applicants to compete with.

The non-billable rate is a negotiable amount with the upper range about what I make at the moment. The billable hour pay would be a massive increase.

Can you negotiate the non-billable rate to close to where you're at now? Though if you think you can get back to the rate you're at now or better without too much trouble, it sounds like a good risk. It also sounds like you're financially stable enough to deal with a variable paycheck too.

Pishof

So I had my interview with the owner - it went much better than expected. They are hiring two people and I'm the most experienced they've looked at and an excellent fit with my background. They are hiring me to replace the badass that left a year ago who pulled in 80k a year because he was so customer oriented the businesses always requested him and he always found more work to do on-site. (Left to be an IT Director at a CC)

The billable hours will actually be closer to $35/hr for my position. It's intended for server projects and not to focus on PC repair but the guys tend to neglect desktop work and favor other tasks. I could even fix three desktops at once at triple rate for an 1hr 1/2.

The guys usually pull in 50k-70k a year depending on how proactive they are. The owner the other guys tend to be "in and out" and not pick up extra work available so there is room for improvement. I can keep my own consulting job on the side as well.

ptilsen

I say take it. IMO, worst case scenario is you feel bored or overworked after 18 months or so, at which point you take all that experience and get a senior position elsewhere. Best case scenario, you love the work and the pace, get significant raises each year, and start pulling in double or triple what you make now within two years.

NotHackingYou

Sounds like a good move to me