Consultant or contractor – what’s the difference?
I have been in sponsor meetings when the subject of staffing gets discussed. There can be many reasons why additional people are needed for a project or team. Could be that someone moved on, could be the project is behind schedule and some adjustments are needed, could be there is a specific challenge, and some outside expertise and perspective is needed.
What is the best way to fill the need – consultant or contractor? Well, it depends on your need!
Consultants are change agents. They bring experience and perspective from working with a wide range of clients and often across multiple domains. A good consultant is there to help you identify, and guide you along, a sustainable path for change towards your goals and aspirations.
The price tag for a consultant may seem high at first glance if you just look at the per hour rack rate and assume it will be 40 hours per week. An engagement may be front loaded with hours to rapidly get up to speed and then the hour commitment may drop over time. An engagement may start out with a few hours per week commitment and then ramp up as an assignment matures. Rarely is a consulting assignment 40 hours per week for x number of months. Also, dealing with the big consulting companies is a lot different than working with a boutique consulting company like AMF Communications. Boutique companies generally do not have a high sales and profit margin overhead and are able to be flexible and work with you to meet your expectations.
Contractors are generally a better fit for staff augmentation like situations. They can have a range of experience levels and abilities. Hiring a contractor is like hiring an employee with the resume review and interview cycles. A contractor can a good fit for a project that is fixed length, or your organization does not have approved staff positions available, but you have a staffing need to meet a deadline.
Contractors filling staff augmentation roles are typically looking for an hourly rate equivalent to a full-time salary plus a percentage (20 to 30%) for benefits that they will provide for themselves. They also expect a set length of contract which may or may not be renewable. If there is a recruiting agency involved, they will also add a percentage for their services and there may be multiple layers of agencies between you and the contractor that gets hired.
AMF Communications is a boutique consulting company specializing in helping clients achieve business agility with a focus on product ownership. How can we help you?
