When you hire a big engineering consultancy, you’re not just paying for engineering. You’re paying for a whole management layer that never touches technical work.
How Large Firms Staff Projects
The typical org chart:
Partner takes the sales call, disappears after kickoff. Program manager coordinates across projects, isn’t really involved in yours. Project manager is your main contact but doesn’t do technical work. Technical lead actually understands your project. Senior engineers do the real work. Junior engineers do more of it, learning as they go.
Of those six roles, maybe three are doing engineering. The rest is overhead.
What It Costs
Large firms bill senior engineers at $200-300/hour, project managers at $150-200/hour, and mark up juniors to near-senior rates. Then they add 15-25% for “overhead and administration.”
On a $100k project, you might see something like:
- Project manager: 80 hours at $175 = $14k
- Status meetings and coordination: 40 hours at $200 = $8k
- Technical lead: 100 hours at $250 = $25k
- Senior engineer: 150 hours at $225 = $34k
- Junior engineer: 200 hours at $175 = $35k
- Admin overhead: 15% = $17k
Total: $133k. Of 570 hours billed, only about 450 were actual engineering. That’s roughly $30k just for coordination.
What PMs Actually Do
In big organizations with multiple teams and complex dependencies, coordination is real work. But for a typical embedded project with one client?
Weekly status emails that could be a 5-minute call. Monthly reports summarizing what the engineers already told you. Executive dashboards nobody looks at. Scheduling meetings between you and the people doing the work. “Sync” meetings to discuss what happened in other meetings.
All of this creates distance between you and the engineers.
The Communication Lag
Here’s how a simple technical question flows in the PM model:
You email the PM. PM schedules time with the engineer. Engineer explains to PM. PM relays to you. You have a follow-up. Repeat.
What should be 10 minutes becomes days. And information gets distorted along the way. The PM simplifies technical nuance because they don’t fully understand it. The engineer never hears your actual concern.
This is how projects go sideways. Not because engineers made bad calls, but because too many people sit between the question and the answer.
The Junior Engineer Math
Large firms love staffing with juniors. Internally, a junior costs them $40-60/hour. They bill at $150-175. That’s 2.5-3x markup.
Seniors cost $80-100/hour internally and bill at $200-250. Only 2-2.5x markup. Less profitable.
So projects get loaded with juniors, supervised by a senior stretched across three other projects. Juniors take longer. They make mistakes seniors catch immediately. They need more review cycles.
You’re effectively subsidizing their learning curve.
The Alternative
Direct access to senior engineers means:
Questions get answered in minutes. Technical nuance stays intact. Context builds over time. No game of telephone.
Senior engineers are faster. Fewer mistakes means fewer iterations. Less time spent explaining requirements through intermediaries.
When PMs Make Sense
For huge projects with 5+ engineers across different workstreams. When your organization requires formal reporting and governance. Multi-year programs with changing teams.
For most embedded systems projects? A senior engineer or small team with direct client access just works better.
Questions Worth Asking
Who will you communicate with day-to-day? If it’s a PM, ask why an engineer can’t just handle it.
What percentage of billed hours are project management? Over 10% should get scrutiny.
Can you talk directly to the engineers? If not, that’s telling.
What experience level are the actual engineers on your project? Not the technical lead who shows up at kickoff - the people doing daily work.
How is overhead calculated? “Administrative overhead” is often a profit margin in disguise.
The Takeaway
PM overhead at large firms adds 15-25% to project cost. That’s not engineering. It’s coordination that often makes things slower, not faster.
Direct access to senior engineers eliminates the tax. Faster communication, better decisions, efficient execution. Worth considering what you’re actually paying for.
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