As a company grows, it must look outside its current employee base for help with various projects and responsibilities. During these times, a company must decide whether it makes more sense to hire a consultant or a full-time employee. In this article, you will learn the advantages and disadvantages of each option. You will also learn how to decide which kind of worker makes the most sense for a given situation.
Advantages and disadvantages of hiring a consultant
Here are three of the main advantages of hiring a consultant:
- Your company does not have to pay for health insurance, other benefits, and administrative expenses (i.e. office space, computer, phone).
- Consultants can usually get started on projects more quickly.
- It is easier to part ways if things aren’t working out, or if your company no longer need a consultant’s services.
Here are three of the main disadvantages of hiring a consultant:
- Consultants typically demand much higher fees/rates than full-time employees performing similar work.
- Consultants may unintentionally act in a way that is inconsistent with your company’s values and culture.
- Consultants usually have less time and energy to devote to your company- since consultants typically serve multiple companies at one time.
Advantages and disadvantages of hiring a full-time employee
Here are three of the main advantages of hiring a full-time employee:
- Your company can pay a lower rate for someone’s time- since you are providing the stability and benefits of a full-time job.
- A full-time employee can be trained and shaped to behave in a way that is consistent with your company’s values and culture.
- A full-time employee can devote all of his time and energy at work to your company.
Here are three of the main disadvantages of hiring a full-time employee:
- Your company has to pay for health insurance, other benefits, and administrative expenses (i.e. office space, computer, phone).
- It usually takes longer to hire and onboard a full-time employee and for him to start working on projects.
- It is typically more difficult to part ways if things aren’t working out, or if you no longer need an employee’s services.
How to decide which kind of person your company needs
As noted above, there are tradeoffs for hiring a consultant vs. hiring a full-time employee. Here are three questions that your company can ask itself to decide which kind of person that you need:
(1) Are we only looking for help with a short-term project?
If your company is only looking for help with a short-term project, then it makes more sense to hire a consultant. For example, if your company needs help developing a fairly basic web site, it would not make sense to hire a full-time employee for this project. A consultant would be sufficient.
On the other hand, there will be “projects” where your company will need ongoing, long-term help. For example, maybe your company needs to develop and manage a highly complex e-commerce web site. Since this “project” would not be limited to the short-term, your company would likely be better off hiring a full-time employee(s) to focus on it.
(2) Is there enough work to justify a full-time role?
If there is not enough work to justify a full-time role, your company would be better off hiring a consultant. For example, a small start-up probably doesn’t need to hire a full-time CHRO. A part-time HR consultant would likely be able to handle all of the HR-related issues for the organization.
However, as that start-up grows, it will eventually reach a point where a part-time HR consultant would no longer be sufficient. At that time, the company would need to hire a full-time HR leader.
(3) What type of work arrangement does the potential employee prefer?
If someone currently prefers to work as a consultant, that might be the only way that your company can leverage their expertise. In that case, hiring someone as a consultant might be the only way that you could work together.
On the other hand, someone might be in a full-time role with another organization right now. In addition, he might only be willing to leave that role for another full-time position. In that case, hiring him as a full-time employee might be the only way that you could work together.
What about hiring someone as a consultant first?
If a candidate is in transition, your company might be tempted to test someone out on a part-time consulting basis before offering a full-time position. However, such a move comes with significant risks, especially if the person prefers to be in a full-time role.
First of all, the candidate could be turned off by your company’s hesitation to offer a full-time role from the start. Secondly, the candidate could view a part-time arrangement as a stop-gap situation, while he searches for a full-time role with another organization. If your company is not willing to make a full-time commitment to a candidate, then you should not expect a candidate to be committed to your company.
Summary and Final Thoughts
There are advantages and disadvantages to hiring a consultant. It makes sense to hire a consultant in the following situations:
- When your company only needs help on a short-term project
- When there is not enough work to justify a full-time position
- When your company wants to work with someone who prefers to work as a consultant
- When your company’s only option is to hire someone on a consulting basis
There are also advantages and disadvantages to hiring a full-time employee. It makes sense to hire a full-time employee in the following situations:
- When your company needs ongoing, long-term help in a certain area
- When there is enough work to justify a full-time position
- When your company wants to work with someone who prefers to be in a full-time role
- When your company’s only option is to hire someone on a full-time basis
P.S. If you enjoyed this article, you can share it by clicking a social media icon on this page.
About the author: As the Founder of Stronger Talent, Pete Leibman recruits exceptional leaders for innovative sports, fitness, and wellness companies. Throughout his career, Pete has helped clients recruit exceptional leaders at the Board, C-Suite, Senior Vice President, Vice President, General Manager, Managing Director, and Director levels. Pete’s work has been featured on Fox News, CBS Radio, and Fortune.com, and he is the author of two books and over 250 articles on career management, peak performance, and executive recruiting.
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