In past posts, I have discussed the difference between firms that hire consultants and those that place consultants on a contract basis. There are firms that hire consultants as a salaried employee and pay them whether they are working or not (bench time), and firms that bring on a consultant 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 are going to make an effort to have projects available for these salaried employees when they are near completing their current assignments. The reason for this is because if the firm does not have a project for their employee when their current assignment comes to an end, 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 when their current contract comes to an end. 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 when their current one ends 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 the best place for them to work. 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. 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 in the market, you will find that some may provide more personal attention than many of the larger consulting firms.