What is the difference between employees and consultants for business services and support?
Liability – that’s number one. As an employer you have much greater responsibility for the relationship in terms of being legally accountable for their work, to the state and federal government employment laws, and even personally liable for their well-being at work.
Service – Consultants have a very different mindset going into the business relationship, they are there to provide a service and build business which produces a proactive, self-managed effort geared towards treating you as their customer. Employees tend to see themselves as the customer and come to the employer with their hands out and often need management guidance. Each hour worked by a consultant is valuable professional work time, where-as employees tend to be on the clock regardless of productivity.
Loyalty and Conformity – This is the one I hear most often. It feels more comfortable knowing your employee is ‘in the fold’ of your organization. There may be more ability to control where they work, when they work, etc, the ability to build morale. While the nature of the relationship is different, Consultants have incentive to do business with you and to protect your business relationship as well with integrity and loyalty, or they risk losing your business, which circles back to service. Consultants do not have to be kept at arms length, they can be integrated into your team, participate in events, meetings, etc.
Benefits Programs – Employers are under legal obligations to provide certain benefits and protections for their employees, which does not extend to contractors. There is no potential for increased expenses due to benefit options, no paid time off, no workers compensation requirements, etc. Consultants get paid for their services as defined in the contract, nothing more, so the expense is straightforward, predictable and manageable.
Business Fluctuation – It is significantly easier to scale up or down for consulting hours, to fulfill project-based temporary needs, and to increase or decrease the support required dependent upon fluctuations in business. Employment can be a bit harder to adjust up or down, it has the potential to impact that status and nature of the employment relationship and may not fulfill the employees needs.
Discipline/Termination – The relationship is less burden for the employer to have a consultant where a contract can be terminated under the terms of the agreement, no harm no foul. There is a greater expectation that consultants must perform to continue the business relationship. The employee relationship often has greater risks in separation of employment, can require investigations and documentation even in at-will states.
Ultimately, it is up to the business to determine what model works best for their needs. Often times a hybrid arrangement can be beneficial, where certain tasks and projects are outsourced to a consulting firm particularly to offset liability or to bring in specialized or skilled professionals on a limited bases, while other roles are best kept in-house. Consulting isn’t scary, it is a service-based, professionally self-managed option to assist in providing a well-rounded professional-quality set of skills that may not all be required full-time. And employment isn’t easy – as anyone who employs people knows, but it can also be rewarding to build those bonds.
Power3 Solutions, my consulting firm, established a business model that assimilates to your business as much as possible to create a seamless business operating experience for our clients, their employees and their associates that we may come in contact with while doing business. We offer a large variety of business services including Business Development, Proposal Writing, Human Resources, Recruiting (technical), Employee Relations, Compliance, Web Design, Graphic Design, Web Hosting, Accounts Payable/Receivable, Bookkeeping, and Strategic Business Planning and Implementation, available as needed, ongoing or project basis!
Contact Business@Power3.com for your business consulting needs!