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In a consulting firm, if my company charges our client $168 hourly as my billable rate, what reasonable cost rate hourly should I get out of that?

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Why would your pay have anything to do with what your firm bills you out at?

Your firm bills you out at the best price they can get. You work for the highest salary you can get. The two are not necessarily related.

likesmartfunny

Hilarious that you won't take a job at A&M precisely because your "share ratio" (as I defined above) was less than 50%, which is a threshold that is unacceptable to you... that ratio is exactly what is being discussing on this thread.

Similarly, no, I would never take your hypothetical deal, for the same reason you won't take the role at A&M. The 1% share ratio is too low

P.S. Apparently you misread "some firms have taken that risk off the table", it was written in the perspective of the firm. Yes, A&M has mitigated the utilization risk by passing it on to you, the employee, and in return grants you a larger "share" of the billings. Big4 takes on the utilization risk and mitigates it by paying you a much smaller share of billings. You can't have it both ways.

Come to offshore….<10%

funnylike

Not how it works, son.

funny

35%

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$63 plus minus 5 per hour if are Senior consultant or above plus overtime!

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Depends how you define reasonable. From the company POV, giving you in the ballpark of as low as $25-30/hr can be easily rationalized.

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Isn't $168 super low?

funny

Maybe $50 an hour.

1/3

Divide in by 2 (50% margin), then divide by 1.25 (loaded cost). Multiply by your target billable hours (say 1800). (168/2/1.25)*1800=$120,960. Gives you a directional number at least. Your actual leverage model, margin targets, etc may vary widely by company, location, type of work, client rate card, etc. Etc.

$69

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