What is the best alternative to consulting
Putting together the right team when you’re starting and growing a small business can be a daunting task—it involves trust, time, and intuition. If you’ve been considering the possibility of using contract vs. full-time workers to take on some of your projects, the decision might be lucrative—but you’ll have to figure out if it’ll actually save you any money in the long run. When making the decision between a consultant and developing the skills in house, it’s necessary to take a good look at the needs of the business. Assess which will benefit you the most through research and how urgent is your need.
Some Pros of Consultants –
1. Unique set of skills - As the “client” who is hiring, you are not obligated to train this individual.
2. Pre loaded with skills - More importantly, consultants are called in because they bring a certain amount of functional expertise to the table, which they can utilize to create benefits for your organisation.
3. Lower cost due to short term engagement - Cost is always a question to consider when deciding which option to take. Depending on the fee arrangement, you will pay only when you actually use the consultant and there’s no overhead costs such as tax, health care or other benefits. Many projects a consultant is hired for, will have a definitive end time, so you know exactly how long a time you are paying them for. The overall cost will be lower than training a member of staff and then compensating them at a new wage that fits their new position and skill set.
4. Organizational fitment not required- They work for your company, yes, but from the outside. In the eyes of the law, consultants should have an equal footing with your company. Hence the levels of hierarchy and chain of command that you have built in your organisation should not apply to them. A consultant may be hired to train your employees, but his/her execution of the activity would not depend on the rules that apply to your employees.
5. Get what you pay for - You can discuss deliverables ( Scope of Work or SOW) with the consultant you plan to hire and only pay on completion of the task. This means you can decide how much a task is worth and only spend that amount. In the case of full-time employees, fixed compensation is not directly linked to performance or achievement of certain goals. Regardless of how an employee performs, he/she is still eligible for that salary cheque at the end of the month.
6. More flexible - if your staffing requirements do not have room to spare an employee to develop a new skill, then hiring a consultant might be the right solution. There may be more flexibility with regards to terminating a consulting relationship since the engagement is not intended to be long-term. Even if you hire an at-will employee, that doesn’t mean that you can terminate them for any reason.
1. Time restrictions - A downside is the consultant’s availability. Consultants may take on more than one project at a time, depending on their client’s level of need. They might have prior commitments when you contact them. This can also affect their ability to meet deadlines, increasing the cost if you require them to complete the project on time.
2. Legal Contracts required - Have the legal contract like NDA signed before hand, you may find there is legal issues regarding the ownership of documents.
3. Less Loyalty – When another client offers a better fee for the services being rendered, there isn’t a guarantee that your favorite contractor won’t leave you and go to your competitor for higher pay. As a result, there can be little to no expectation of a long-term working relationship with your contractor, and you will always need a plan in place for how you will proceed if the contractor becomes unavailable.
If the situation within the business is not so urgent, you may consider taking the time to develop the necessary skills in house. A benefit of this is, you will then have reliable, consistent access to the skills through your own employee. Since they are already a member of your staff, you do not have to worry about their availability. An employee within your business will be more motivated to focus on the goals of your business, rather than split their time between multiple clients.
Some Pros of Hiring Full-time –
1. Cost of recurring projects – If the projects are recurring and constant in nature , then it will benefit from training in-house for those skills.
2. Availability – Consider that your efforts to hire a consultant is more tiresome and time consuming than doing the task. Then it’s best to cross train or create a role within the company to perform these tasks.
3. Often employees are trained by their company for any specialized work beyond their general education and prior work history.
4. Hire for management skills – When the role needs to manage a larger scope of work and organizing, then it’s very less chance that a consultant can be hired.
1. Employee turnover – Employees also leave for better options which makes the firm vulnerable to the loss of skills and lack of continuity
2. Cost to company – Most full time employees are a year on year expense with medical insurance, raise, bonus issues, minimum pay etc.
3. No guarantee of delivery – It’s not always certain that goals will be met to the best satisfaction
Figuring out Whether Contract vs. Full-Time Workers Are More Cost Effective
In the end, your best answer to the contract vs. full-time worker debate could be either one—or even a combination of both. Ultimately, the most cost-effective choice for your business is going to be the one that allows you to thrive in the current market while keeping an eye on the years ahead.
1. the current and future needs of your business
2. the cost-benefit of long-term relationships vs. short-term responsibility
3. legal liabilities of potential misclassification
You’ll need to scrutinize all of these closely before choosing which type of workers to bring into your business.
Dilzer Consultants Pvt Ltd