If a consulting firm hires salaried employees they are going to make an effort to have projects available for them when they are nearing completion of their current assignments. They do this because if the firm does not have a project for their employee, the person will become a pure expense until a project can be found. Therefore, many people getting into consulting think it is less risky to be a salaried employee of a consulting firm because they will have someone looking for their next project.
On the other hand, there are firms that place consultants on a contract basis. Some consultants feel working on a contract basis is more of a risk because of the fact that they are not getting paid if they find themselves without a project. They also feel that as a contract employee, the firm they are working for is not necessarily going to make an effort to find them a new engagement because they are not paying them a salary.
All of the thoughts above are correct but incomplete.
These are very general rules of thumb. A majority of people looking to get into consulting use these broad rules of thumb when making their decisions regarding what they think is best. Because of this, many people make misguided decisions.
Let me give you a couple of examples.
As stated above, many people think it is best to be an employee of a consulting firm because the firm you work for will proactively find your next engagement. And, because of this, you will not have to worry about having future work. Well, many firms have access to a large amount of projects, but this does not mean they are actively looking for something for “you”. There may be work you “ideally want” to do and work you “can” do. Many consultant employees find themselves on three week activation support assignments because that is what their firm has for them. This may be a project that will keep you working, but it may not have been a firm you would have joined had you known this was a possibility.
On the flip side…
When it comes to a firm that places consultants on a contract basis, some of these firms WILL proactively help you find your next project even if you are a contract hourly employee. If you are a true professional that 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 assignment? If you take the time to truly question the quality contracting firms, you will find that some may provide more personal attention than many of the larger consulting firm.
As a contractor, you should understand that the reputable contracting firms want to work with the best independent consultants. These firms will take the time to help you identify your ideal next project. But, this requires a major time commitment on the part of the firm. If you would like a firm to make a time investment in you, you have to be willing to give them something in return. That something is a commitment to them… at least for a period of time.
When the average independent consultant gets near the completion of a project, they reach out to multiple firms to inform them of their upcoming availability. So, an independent consultant may typically reach out to 5 firms and each firm dedicates 10% of their time looking for leads for this consultant. On the other hand, what if this same consultant reaches out to one firm they have established a relationship with, and because of this commitment they now have, one firm will investing 80% of their time for them. In this scenario, you can see how reaching out to only one firm will actually result in more time put towards finding their next project.