Should You Hire A Consultant Or A Contractor?

Having worked as a project and facilities manager within the corporate real estate for fortune 100 companies, I have found that people often misunderstand the difference between the roles of a contractor and a consultant.

In this article I want to highlight the differences between a contractor and consultant.

Both individuals play a significant role in the construction and real-estate industries, and it’s important to know the difference when hiring an individual to manage your next project.

Contractors And Consultants

Contractor: A contractor essentially acts as a temporary employee. The contractor works under the manager’s supervision, often with other employees to help complete part of a large project. He or she is told what to do, how to do the project, and what needs to be done in order to accomplish the project at hand.

Consultant: is brought in when the company has an urgent need and either isn’t able or doesn’t know how to take care of it-and more than likely doesn’t have the time to come up with a solution to the problem. The consultant analyzes the problem and creates a proper solution, often using methods or tools that the client may not have thought of on their own. The consultant is self- directed and does whatever he/she needs in order to deliver a solution that meets the client’s needs.

What Is The Difference Between A Contractor And A Consultant?

A contractor generally bills by the hours spent on the project. Invoices detail the number of hours worked multiplied by a set rate per hour. Contractors generally work onsite under direct supervision. They often work directly with an agency and often times do not market themselves to find their own work. Often times they are on a company payroll and are expected to be at the office for 40 hours per week.

A consultant most often bills by project, charging for creating and implementing the design with the solutions being offered. Consultants very rarely work through an agent; they often represent themselves with their own marketing efforts.

A consultant sets the price based on the quality of the solution, as well as the demand for solving the problem. Because a consultant can bill by the project, he has the potential to increase his hourly rate by working faster and more efficiently. Also, many clients like the approach because they know what the project will cost upfront, and they know there’s no incentive for you to drag out the deadline of the project.

Perhaps You Can Relate To This Story…

A company was having problems with its systems crashing. Every hour their system would continue to crash while their business remained idle as they could no longer process transactions. So they called in a consultant to fix the problem. The consultant was very knowledgeable and licensed. The consultant went to the admin of the system and did some work for a total of 5-10 minutes. One reboot later, the system was up and running. The consultant solved the problem in under an hour.

When the accounting department received the bill, they were shocked to find that the consultant billed them for nearly $1,000. When the accounting department requested an itemized bill, the consultant sent the following:

  •       Fixing a computer crash $50
  •       Knowing how to fix computer crashes: $925

In the end, the consultant is 100% in control of the hourly rate and what they deem is a fair price to charge their clients, but typically there is a contract in place with the consultant so that the client knows what charges are up front. A consultant never wants to blindside a client with excessive charges.

The Benefits Of Hiring A Consultant:

1.  An Objective Outsider’s Perspective

Owners and upper management normally have invested a significant amount of time, energy, and resources into their companies. Many companies refer to their business as their “babies.” Due to bias or simply being too close to their issues to see clearly, companies can easily become blind to the day to day problems that can arise, and this blindness is the reason they seek outside professional help, getting a second set of eyes to look at the bigger picture and create a better solution.

2.  Accomplishing Short- Term Goals

Employees have established performers within their own job description: however, it can be difficult to get employees to implement more short terms tasks when trying to utilize skills that are outside their knowledge base. Bringing in an experienced consultant that has the proper resources available ends up saving the company time and money so your employees can spend their time focused in areas where they can perform at their highest level.

3.  Leveraging New Skills

A major part of a consultant’s job is to keep up to date with the current trends, strategies, and methodologies. Companies require an in-depth explanation of certain processes and procedures in order for the consultant to formulate a solution.

Now you have the proper information between the role of a consultant and a contractor when looking to hire outside help.

If you need further assistance, please feel free to reach out to me at chris@thegreshamgroup.com

I’d like to hear from you. Please leave a comment below.

What has your experience been with hiring outside contractors and or consultants?

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