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Contractors can be hired, even recruited, by clients; ‘consultants’ are supposed to be something different, says Fiona Czerniawska, co-founder of Source.
Contractor or consultant?
 
 
   It’s not just a
question of glamour
(‘consultant’ sounds so
much more upmarket, as
any hair or sales
consultant will tell
you), but hard cash:
consultants can charge
more than contractors.
  
   But the question of
how you tell the
difference continues to
vex clients. Consultants
are supposed to work on
projects, rather than
open-ended contracts, so
they’re tasked with
completing something,
not simply doing it.
Contractors would
probably argue that
they’re just as focused
on delivering results.
Consultants come in
teams (it’s one reason
why they’re more
expensive per capita) so
can take a more
integrated approach to
bigger projects:
contractors have to be
 
 managed by the client.
Consultants are preceded
by their brand, the
quality ‘stamp’ which
means that they meet an
acceptable standard –
although many clients
say they now vet
individual consultants
as they would
contractors or, indeed,
employees.
  
   These are murky
waters, made murkier
still because consulting
firms use contractors
much as clients do to
deal with peaks of
activity or to provide
short-term, specialist
input which it doesn’t
make sense to have
in-house on a permanent
basis. And that’s
happening more and more:
consulting firms are
telling us that
utilisation levels are
high; many are quietly
but constantly shedding
staff whose skills
aren’t in demand; lower
 
  
   
 
 
 
 
 perhaps more important,
problem is that both
clients and consultants
are making use of the
same contractor market.
“We found they were
using a lot of
contractors on the
project, not their own
staff,” complained a
client we spoke to
recently. “If we’d
wanted those people we
could have gone to the
contractor market
ourselves. We don’t need
a consulting firm to do
it for us.” Contractors
can be hired, even
recruited, by clients; a
‘consultant’ is supposed
to be something
different, a rarefied
beast who comes trailing
clouds of experience in
their wake. But the
issue is not simply that
consulting firms are
trying to pass off
contractors as
consultants (and charge
accordingly); it’s that
if a consultant is
 
 someone who isn’t
readily available in the
contractor or
recruitment market, then
many of the people who
are currently working
for consulting firms may
be in danger of being
seen as contractors by
their clients. They’re
just not expert, or
different, enough to be
seen as a scarce
resource by people who
themselves are former
consultants.
  
   Some years ago, when
I started writing books
about the consulting
industry I looked at the
way in which differences
between clients and
consultants were being
eroded and asked if we
were all going to be
consultants in the
future. I was wrong: I
should have been asking
if we were all going to
be contractors.
 
 margins mean that
recruitment usually
comes after a large
piece of work has been
won rather than before
it. Of course, the irony
here is that the
flexibility clients seek
from consultants is
being passed on, as lean
consulting firms look to
the contractor market to
provide them with the
flexibility they need.
It’s the labour market
equivalent of a
back-to-back contract.
  
   There are two quite
obvious problems with
this. The first is that
consulting firms are no
better than their
clients at flexibility:
the consulting firm may
add value in many ways,
but this is not one of
them. The second, and
 
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