Recruiter's Glossary

Examples: Gap Analysis • Business Process Reengineering • Project Portfolio

Cost-Benefit Analysis

Term from Consulting industry explained for recruiters

Cost-Benefit Analysis is a business planning tool that helps companies make smart decisions about projects or investments. It's like making a detailed pros and cons list that focuses on money and other measurable benefits. Consultants use this method to help clients figure out if a project is worth doing by comparing all the costs (like money spent, time used, and resources needed) against all the benefits (such as increased revenue, saved time, or improved efficiency). Similar terms include ROI Analysis, Business Case Development, or Financial Impact Assessment. This is a fundamental skill that most management consultants use regularly to help clients make important business decisions.

Examples in Resumes

Led Cost-Benefit Analysis for client's $2M technology upgrade project

Performed Cost-Benefit Analysis and CBA studies for 5 potential market expansion opportunities

Created detailed Cost/Benefit Analysis framework resulting in 30% improved decision-making efficiency

Conducted Business Case Analysis and Cost-Benefit Study for merger opportunities

Typical job title: "Management Consultants"

Also try searching for:

Business Analyst Management Consultant Strategy Consultant Financial Analyst Business Consultant Project Analyst Strategic Planning Consultant

Where to Find Management Consultants

Professional Organizations

Online Communities

Job Resources

Example Interview Questions

Senior Level Questions

Q: Can you explain how you would lead a complex cost-benefit analysis for a large-scale organizational change?

Expected Answer: A strong answer should describe their process for identifying both tangible and intangible costs/benefits, how they would involve stakeholders, methods for calculating long-term impacts, and experience leading teams through this analysis. Should mention risk assessment and sensitivity analysis.

Q: Tell me about a time when your cost-benefit analysis led to a counterintuitive recommendation. How did you handle that?

Expected Answer: Look for candidates who can explain how they used data to support unexpected findings, managed stakeholder expectations, and successfully communicated complex analysis in simple terms to get buy-in.

Mid Level Questions

Q: What factors do you consider when conducting a cost-benefit analysis?

Expected Answer: Should mention direct and indirect costs, quantifiable and non-quantifiable benefits, time value of money, risk factors, and alternative options. Should demonstrate understanding of both financial and non-financial impacts.

Q: How do you handle uncertainty in your cost-benefit analysis?

Expected Answer: Should discuss methods like sensitivity analysis, scenario planning, and risk assessment. Should mention the importance of making reasonable assumptions and documenting them clearly.

Junior Level Questions

Q: What are the basic components of a cost-benefit analysis?

Expected Answer: Should be able to explain the basic process of identifying costs (direct and indirect) and benefits, how to quantify them when possible, and the importance of comparing alternatives.

Q: How would you gather data for a cost-benefit analysis?

Expected Answer: Should mention sources like financial statements, market research, stakeholder interviews, industry benchmarks, and historical data. Should understand the importance of data validation.