Every manager I know … hates consultants. Managers often believe consultants are at best, unnecessary luxuries — like training and travel — that are easy to cut out of tight budgets. Managers often focus on the cost per-hour of a consultant (like they would with a lawyer.) My hourly rate is $275/hour. Managers may multiply that rate by the 2080 hours in a year (52 weeks x 40 hours/week) and get the astronomic figure of $572,000 per year!!! See, I knew consultants were bloodsuckers!
Well, wait a minute. At the risk of sounding self-serving (this is my web site, after all). let’s debunk some myths about consultants.
- No consultant I know works 2080 hours a year or even close. No consultant I know is able to bill even 40 hours a week. No consultant I know is able to find employment 52 or 50 or 48 weeks a year.
- A lot of our time isn’t billable at all, like that spent seeking clients (marketing).
- People like me, who work as consultants, first have to work as freelancers or employees in the field for decades. I have 42 years of such experience under my belt. Like most college educations, this is one heck of a major investment I have made before earning the right to hang up my own shingle and do consulting.
- But, here’s the real myth. Managers often think employees are much cheaper than consultants. The truth is that consultants deliver expertise in an efficient package compared to most employees. Consultants perform a specific set of tasks, with a start and finish to each project and without any benefits and taxes being paid or ongoing obligation.
As we used to say at Marketplace, let’s do the numbers:
Let’s say you hire me for to do a project for you. My typical fee is $7,500 to audition, analyze, critique, lead a 2½ day Intensive and write you a comprehensive plan for a program.
In my opinion, if you had an employee on staff who was actually qualified to do this for you, and allowing for vacations, holidays, sick leave, etc., it might cost you:
4 weeks x $100,000/year + 30% benefits and taxes = $11,440
… and this doesn’t count office space, telephone, and all of the other “overhead” you pay for an employee.
You can do your own math, but the point remains: When you hire a consultant, you get highly-experienced temporary service with no ongoing cost. For certain kinds of work, the consultant is appropriate. For short-term but high-level tasks like planning new programs, the cost of a consultant is a bargain. Not to mention how it frees you from elaborate and expensive recruiting efforts, relocation costs, training and ramp-up time, and the risk you take that every new employee may not be the right hire.