When managers are considering a project, they always want to know how much the IT consulting fees will cost. Often, they face a decision whether to bring in a consultant for a few months, hire a company or even hire a full time employee. These decisions are always based on cost. It’s no mystery that IT consulting fees are typically higher than hiring a full time employee. However, it is not an equal comparison. There are many fees associated with employees that you will not have to pay consultants. This article will discuss some of these fees.
Why Hire a Consultant
IT Consulting Fees v. Employee Costs
When you hire a consultant, you only have to pay their IT consulting fees. You do not have to provide healthcare, vacation time, sick pay, payroll tax, unemployment, retirement or any other employee costs. Typically, these additional costs could be over 50% of the employee base pay. Thus, the accurate comparison is Employee Base Pay x 1.5 – IT Consulting Fees.
Sick Time / Vacation
When you hire a consultant on a short term project, you don’t have to worry about one of your key people taking vacation during the critical points of the project. The consultant will be there when you need him. If not, many consulting companies will provide an up to speed replacement for the duration of the consultants leave.
Project Conclusion
With consultants, when the project is over, the consultant moves onto his next project. Again, you’re only on the hook for the IT consulting fees and you do not have to worry about finding work for the employee or laying anyone off. This by itself is a huge reason why companies prefer to hire consultants. Despite what you hear on the news, companies hate laying off employees for any reason.
Direct Consulting or through a firm
For the most part, it is usually better to go through a firm when you bring consultants on board. While the IT consulting fees may be more, you don’t have to concern yourself with insurance or have to worry about an employee quitting. If a consultant quits in the middle of the project, most consulting agencies will do whatever is necessary to find a suitable replacement. If you hire a consultant directly, and he quits, you’re back to square one.
However, there is an exception to this rule. After consultants reach the top of their game, they often start going directly to the customer. They prefer not to have the agency eat into their IT consulting fees. This usually only happens after the consultant is so good at what they do, they no longer need the help of the agency to find projects. When this is the case and you are considering going direct with a Senior professional, you won’t have to worry about him quitting or not carrying the appropriate insurance. Doing a good job for you, directly relates to his future project prospects. In addition, you can often save money on some of the IT consulting fees. For example, if the agency charges $100 per hour and pay the consultant $70 – You can probably save some money by hiring an independent contractor and paying him $85.