In past posts, I've discussed the difference between firms that hire consultants and those that place consultants on a contract basis. There are firms that hire consultants as salaried employees and pay them whether they're working or not (bench time), and firms that bring on consultants and pay them hourly for the term of the project. There are also some firms that do both.
If a consulting firm hires salaried employees, they’re going to make an effort to have projects available for them when they near completion of their current assignments. If the firm doesn’t have a project for their employees when their current assignments come to an end, they’ll become a pure expense until projects can be found. Therefore, many people getting into consulting think it’s less risky to be a salaried employee of a consulting firm, because they’ll have someone looking for their next project.
On the other hand, there are firms that place consultants on a contract basis. Some consultants feel that working on a contract basis is more of a risk due to the fact that they won’t be paid if they find themselves without a project when their current contract comes to an end. They also feel that, as a contract employee, the firm for which they’re working isn’t necessarily going to make an effort to find them a new engagement when their current one ends, because they’re not paying them a salary.
All of the thoughts above are correct but incomplete. They’re general rules of thumb. A majority of people looking to get into consulting use these rules of thumb when making their decisions regarding the best place for them to work. As a result, many people make misguided decisions.
Let me give you a couple of examples.
As stated above, many people think it’s best to be an employee of a consulting firm because the firm will proactively find their next engagement. As a result, they won’t have to worry about not having future work. Well, many firms have access to a large number of projects, but that doesn’t mean they’re actively looking for something for you. There may be work you ideally want to do and work that you can do. Many consultant employees find themselves on three-week activation-support assignments because that’s what their firm has for them. This may be a project that will keep you working, but would you have joined the firm if you’d known that this is the kind of work you’d be doing?
On the flip side, when it comes to firms that place consultants on a contract basis, some will proactively help you find your next project, even if you’re a contracted hourly employee. If you’re a true professional who has a marketable skill set and has done a good job on past projects, why wouldn’t a contracting firm want to find you your next project? If you take the time to truly question the quality contracting firms in the market, you’ll find that some may provide you with more personal attention than many of the larger firms.