Women consultants make more, work harder

by Lynn Graebner

Niti Agrawal loved her jobs, marketing and managing products for Hewlett-Packard Co. and then Agile Software Corp. But with two young boys and a need for a break, she delved into independent consulting four years ago. She hasn't looked back.

She's still working hard, 40 to 45 hours weekly. But she's making more than she did as an employee and she's got the freedom she craved. Revenue for her company, Stage 4 Solutions Inc., of Saratoga, are up more than 30 percent a year, yet her rates are the same.

This seems to be the story for many women consulting in the Bay Area. Female consultants are making more money than they did last year, although they're working harder for their compensation since rates stayed flat, according to a survey by Women in Consulting (WIC), a nonprofit association in San Jose.

WIC got responses from 154 women consultants, 46 percent of whom are WIC members. The majority of those responding to the survey have been consulting for between 10 and 20 years, 48 percent have master's and 4 percent have a doctoral degree.

According to the June survey, average total revenue is $146,000 -- up from $139,000 last year. But the average hourly rate is down 4 percent from $125 in 2004 to $120 this year. Basically, it's flat, says Deborah Henken, WIC's president. Thirty-three percent of respondents make between $100,000 and $175,000 and another 36 percent make between $50,000 and $100,000. Only 9 percent make less than $50,000.

Despite the encouraging numbers, it was a rough ride for consultants during the downturn, says Mark Haas, chair elect of the Institute of Management Consultants USA, a nonprofit Washington D.C.-based association that certifies management consultants. It has 1,700 members and 24 chapters in the country and certifies consultants based on standards accepted by 41 other nations.

Mr. Haas says that Kennedy Information Inc., a Peterborough, N.H.-based information source on management consulting, calls the recent economic downturn the worst in 30 years for the consulting sector. And recovery only really started in 2004.

Mr. Haas speculates that women consultants may have been hit even harder than the industry as a whole since they typically excel in the field of human resources. When the economy is down, human resources are scarce.

The institute has not been focused on recruiting members, so Mr. Haas has not seen a surge in the number of consultants over the past several years, although he has made a push for more women in his local Washington, D.C., chapter.

Yet Ms. Henken has seen seven-year-old WIC's ranks triple in five years to 225, mostly in the Bay Area.

The largest percentage of the consultants in WIC's survey are marketing strategists. The next largest category is "other" and the next most prevalent categories are public relations, management consulting, product marketing, graphic arts or design, project management and market research.

Most of them are in their 30s and 40s and looking for ways to balance their personal and professional lives. Ms. Henken, who has an MBA and previously was a vice president at Blue Pumpkin Software Inc., in Sunnyvale, started her marketing consulting company five years ago largely because her son was starting first grade and she wanted to be home more.

Despite the bad economy -- she launched just after the 9/11 tragedy -- Ms. Henken and the majority of WIC members surveyed increased revenue from May 2004 to May 2005. During that time, 60 percent of survey respondents said revenue increased in the past 12 months and 73 percent expect it to climb even higher in the next year.

Ms. Henken's first year revenue was $125,000 and last year she pulled in $175,000. Unlike many consultants, she was able to raise her rates between 30 percent and 40 percent in 2005.

Consultant Julie Merrill, who does business as Change Catalysts in Oakland, says she hasn't really raised her rates but that she's getting a lot less resistance when she quotes them to clients. She charges by project.

That seems to be the trend, Mr. Haas says. "If you sell yourself as time [by the hour], you put yourself out as a commodity in the lowest bidder market," he says.

Many WIC members find they can generate more personal revenue if they outsource to subcontractors.

Consultants with subcontractors average $132,000 in personal income versus $86,000 without subcontractors, the survey reports.

Of those surveyed, 66 percent are sole proprietors and 81 percent have no employees, yet 63 percent use subcontractors. In fact, Ms. Agrawal of Stage 4 uses as many as eight subcontractors, including one in India. And her business is growing so rapidly that she's considering hiring employees. Her annual revenue is increasing between 30 percent and 70 percent annually and she hasn't seen any dips since she started her business.

But that's not typical, says Ms. Merrill. She and most of her consulting friends have seen dips and valleys in their revenue, although over the last 16 months the landscape has been improving, she says. She works about 50 to 60 hours a week and supports herself on her income.

While she's still working long hours, she's not on the phone or a plane eight hours a day, like she was when she was vice president for training and development in Bank of America's call center division.

"It's my own hours now."

Lynn Graebner covers nonprofits and life sciences for the Business Journal. Reach her at (408) 299-1822.

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