So you have a vacancy on your team or have identified a skill or knowledge gap that needs to be filled in your company. Time to draft the recruitment ad or call the headhunters? Not necessarily. Consider, before going any further, whether you want to recruit a full-time employee or if it is worth taking an alternative course of action by hiring a consultant instead. You may well find that the consultant route offers you numerous benefits in terms of reduced cost, greater flexibility, a significantly lower commitment from you in terms of time, and immediate access to the knowledge and expertise you are seeking.
Here are some of the key benefits from hiring a consultant as opposed to a full-time employee.
- Lower Cost.
Hiring full-time employees means assuming the cost of not only their salary. You have to add to this social insurance and payroll taxes, holiday pay and, depending on the employer and the type of contract, potentially health insurance as well. There might also be a requirement to pay into a pension scheme or provident fund as well.
All this means that a full-time employee can cost significantly greater than a contractor who will normally charge by the hour at a pre-agreed rate with no hidden additional costs.
Not only, however, are you required to pay for all the employee’s costs; you are required to administer them as well. Changing regulations add complexity and cost to a business. And whilst the cost of employment administration rises, so does the seriousness of the consequences if you fail to meet those regulations.There are payments and reports to be made to government departments, employment legislation to be understood and complied with, additional reporting requirements, and other administrative burdens. Contrast this to the hire of a consultant where the burden of such issues falls on them.
Another saving with the hiring of consultants comes from the avoidance of recruitment costs. Whilst at the lower-end of the scale recruitment expenses may just be limited to placing an online ad on a job board, recruitment at middle management level may well require the services of a dedicated recruitment firm. In return for sourcing, vetting and short-listing candidates, such recruitment consultants will expect a fixed fee when an appointment is made, usually equivalent to several months’ salary of the successful applicant. At the most extreme levels, senior appointments may be filled by employing a specialist headhunter who can charge up to six months’ salary for a successful hire. There are no recruitment costs when you hire a consultant.
- Increased flexibility
Consultants can normally be hired, and fired, with minimal notice. This is in contrast with full-time employees where there can be significant legal obstacles associated with recruiting, and more especially, terminating them. The issues may begin with the initial employment.
You have drafted the ad, engaged the recruitment consultancy, interviewed the short-listed candidate, and made an offer to the successful applicant which they have accepted. Great, except if they are currently working for an existing employee, in which case they may legally be obliged to serve their notice period. This can be a matter of a few weeks, or a few months. Meanwhile, you might have need of their skills and knowledge now. Why wait? Hire a consultant and they can begin working for you almost immediately.
Making somebody redundant, or terminating their contract, can be even more difficult. There may be internal procedures to navigate, including disciplinary procedures and notice periods, or local legal and government regulations that prevent firms making employees redundant easily, or without significant financial and administrative cost. In some countries this may extend to restrictions on subsequent hiring, forcing employers either to do without or to realign roles and responsibilities to get around the legislation. Compare and contrast with the consultant where the engagement can be terminated easily and with no lasting repercussions.
- Reduced commitment of time.
Hiring an experienced consultant usually entails significantly less of your time than is required with a full-time employee. Not only are you spared the considerable time that the recruitment process normally entails. Provided the consultant has the requisite skills and knowledge, they should need considerably less management time than a new employee, where you will be required to manage them, not only on a day-to-day basis – especially in the beginning, when they are new – but also in terms of an ongoing commitment to their training and development.
There is also a less emotional commitment from your side with an external consultant. Because they normally do not work for you, or your company, on a long-term basis, there is less shared identification, and focus on mutual objectives. Your relationship can remain strictly professional. This is opposed to the full-time employee where personal relationships, and often friendships, are formed. This means that when painful decisions have to be made that affect the employee – for example, turning down a promotion or terminating the position – there can be personal as well as corporate consequences. Having to make somebody redundant, for instance, whom you have known and worked with for years can be emotionally very stressful.
- Immediate access to knowledge and expertise
When you hire a consultant, you are engaging them for their existing skills and expertise, knowledge which they can bring to your business immediately. Provided you have done your homework, made sure that the consultant has the necessary expertise and qualifications to do the job, and that you defined the terms and scope of the engagement properly, there should be minimal training required in order for them to make an immediate contribution. This may be in contrast to a full-time employee where it might take months, or even years, to train them to a level where they can properly fulfill a role, or where you might be waiting for them to serve a notice period with their present employer before their knowledge and skills are available to you (and even then few are so qualified that they can hit the ground running with no initial training required first).
Broadly speaking, employing people is expensive and administratively burdensome. As employment regulations change, the complexity and cost for businesses increase. whilst the consequences of failing to comply with regulations becomes more severe. Fortunately, a viable alternative to the full-time employee is at hand.
Engaging an experienced, skilled consultant rather than hiring a full-time employee can be less expensive, offer greater flexibility, require less valuable management time, and give you immediate access to their knowledge and expertise.
If you have a vacancy now, or expect to have one in the future, think before placing that advert or ringing those recruitment consultants. A much better alternative could be close at hand.