Why You Should Be a Consultant – Hint: You Are

be a consultant
You may already be a consultant

My father worked for a large manufacturing company for nearly forty years. He retired from his management position in 1986.  Twenty-two years after his death, my surviving mother still collects a pension from his company.

In his day it was almost taken for granted that he would work there for his entire career.  They assumed he wouldn’t go off looking for another job and he assumed they wouldn’t lay him off.

In a modern day contrast, throughout my 23-year career I have worked for six different firms. I’ve had one company go out of business, been laid off twice due to down-sizing, and left two companies on my own accord for better opportunities.

This is not your father’s career track.

Things began changing several years ago.  Companies realized that they couldn’t afford the presumed guarantee of lifetime employment.  Increased competition prevented them from the ability to fund pension plans for the rest of the employee’s (and surviving spouses) life.  Skyrocketing health care costs limited the employer’s ability to fund that benefit for their entire workforce.

Today, systems have been established to allow employees to fund and manage their own retirement systems.  The employee is expected to pay for an increasing part of their health insurance, with higher deductibles and co-pays.

The trend will likely continue to place more of these burdens on the employee, which is both good and bad.  The obvious bad side is that the employee will be responsible for funding benefits for which the employer was traditionally responsible.

You may already be a consultant

The good side to this is that it gives the employee more freedom to change jobs without fear of losing his pension or health care.

Growing up, I knew many people that worked at the same company as my dad, who would tread wearily to work every day, hating every minute.  They were prisoners of the company’s great health care and promised pension.

Today the employee has the freedom to leave a job they hate.  It’s much easier to change jobs and roll over one’s self-directed retirement fund to one with a new employer.  As we have become more self-sufficient in managing these benefits and less tied to the corporation we work for, we have become a much more transient work force.

This trend got me to wondering what the difference is anymore between hiring an employee and contracting with a consultant.

Companies hire consultants for various reasons; to augment their staff temporarily, to bring in needed expertise or to execute a large project.

It’s usually a temporary period, but I’ve seen consulting contracts that were open ended and last for years.  Many that have finite end dates get extended into near perpetuity.  As a consultant, I’ve worked at clients longer than many of their employees.

The main differences between hiring a consultant and hiring a full-time employee are:

  • There is a lot of overhead involved with a full-time hire, with Human Resources getting involved to make sure correct protocol is followed
  • Benefits, such as health insurance and vacation are usually provided to the employee.
  • It’s often harder to release a full-time employee, requiring the overhead of HR once again, development and maintenance of performance plans for under-performing employees and severance packages.
  • Rates for consultants are usually (but not always) higher.  But the client only pays the rates for as long as they need them.

The similarities:

  • Consultants and employees are brought in to utilize his or her expertise to help the company achieve their goals.
  • Consultants and employees are paid an agreed upon fee to perform tasks.
  • When a consultant’s services are no longer needed, the contracting company informs him or her that those services are no longer needed and they ask them to leave.  Sound familiar to any former full-time employees?

In essence, we’re all temporary workers.  The temporary period varies depending on what we are hired to do, but few people obtain employment today with any certainty that this is the company where they will retire.

So, career management is different these days.  Back in the day, on the rare occasion that someone left my dad’s company, they wished him well, said they’d keep in touch and never did (what were they going to do, write each other letters?)

Today, people leave companies on a regular basis.  They stay connected via LinkedIn and other social networking applications.  Most do a good job of staying in touch or at least being able to connect if need be; but not everyone.

I’ve found that the people who are better at staying connected are the most transient.  This includes consultants.  Those few that stay at the same place for years don’t put forth the same effort of maintaining ties.

And then it happens.  The axe falls.  The company lets 10% of the staff go in a down-sizing effort.  And all of the people they’ve met over the years have changed their jobs, phone numbers and email addresses from the business card they handed out ten years ago.

See my related post: Why not consulting?

Because of the increased trend toward serial employment, everyone should have the “consulting mindset” of building their network, keeping in touch, and always being ready to move on to the next job.  Always strive to stay current.  Know the technology and business trends that are affecting their industry.

A prepared employee will make herself so essential to the company that management fights to keep her when layoffs come around; and so marketable that she can find that other job when she needs to, or when she wants to.

If you would like to learn more about what it is like to be a consultant, get Lew’s book Consulting 101: 101 Tips for Success in Consulting at Amazon.com

As always, I welcome your comments and criticisms.

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