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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
 
  
   
 
 
 
 this is not one of them.
The second, and 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
 
 staff whose skills aren’t
in demand; lower 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