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Consulting Compared to Being an Employee - Part One

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In my time as an executive level consultant, I have met many highly skilled and senior technologists that are interested in becoming independent consultants.  However, in all but a few cases, I have done my best to discourage these colleagues.  Do I think that consulting is bad or too difficult?  No.  Do I think that they did not have sufficient technical knowledge?  No.  Do I think that they would fail?  In some cases yes and some cases no--yet that was not the main decision point.  Why then?  Before I can explain that, it is best to point out the very significant differences in the roles of the three main categories of IT workers (regardless of skill level).

The detailing of these categories make up Part One of a multi-part article.  Part Two will explain the issues associated with each catqagory and help the reader determine if this path is appropriate for them.  All articles can be found together at: or at any one the many  other websites that carry our publications.


  • This individual is a W2 employee of the organization where they perform their duties. 
  • They are staff and the organization has a long term investment in them. 
  • They are a fixed cost. 
  • They have stability, (sort of) and benefits.


  • This is an individual that is employed by a third party such as a (Front-End) Consulting Company.
  • They are W2 employees of one company--that are assigned to a client company for a long term engagement.
  • It is common to find someone in the same job with the same client company for five or ten years. 

To be candid, this one has always puzzled me a bit.  My opinion is that these Contractors should be hired as Employee after paying appropriate fees to the Consulting Company that brings them to the engagement.  I have written about this, in part, in another article entitled, "Mentoring in IT."  It describes how valuable knowledge is not retained by the organization without a proper mentoring program that is not well served by using long term employees that are still considered temps.  It includes a discussion regarding hiring such contractors outright.  From a financial sense, these workers cost a great deal more than an employee--even with benefits.  The advantage is that they are "disposable."  Yet, if they are disposed of--let go--they take with them valuable knowledge about the organization that took them many years to learn.  While the organization can let them go with no further financial responsibility--it loses far more than their cost when they go.  In a long term engagement, much of the individual's value is company-centric.  In my opinion, if you intend to keep someone for more than two years--you should offer them a permanent position and groom them for a career in your organization.


  • This category of worker is often incorporated and independent, but still get most of their work through a larger (front end) consulting company. 
  • However, they are also likely to be a W2 employees of the larger organization--if only on a Temp basis. 
  • Clearly, there are major differences in the advantages and disadvantages of each method. (These are discussed in Part Two of this article.)

This individual works in any one of, (or a combination of) the following four categories:

Project Oriented:

  • A fixed project with a beginning and an end.
  • It is often contained by a Scope of Work--but not always.
  • Typical engagements range from weeks to a couple of years. They often are extended.  Yet, they can also be terminated early with little advance notice to the worker.  A long term commitment in this environment is nothing more than a statement of intent—not a binding guarantee.

Client Oriented:

  • You are assigned to work with one or more clients of your organization.
  • You become the contact point and Subject Matter Expert (SME) for that account.
  • The work may be technical, managerial or both.
  • Same range of engagements as Project Oriented work, but with a  better long-term outlook.

Product Oriented:

  • You become the Subject Matter Expert (SME) for one or more products of your organization.
  • Best long-term outlook as their investment is more obvious and harder to ignore.

Specific Technological Skill-Set Oriented: 

  • You have a level of expertise in one or more areas of technology that are higher than are typically found in an employee of a client company.
  • This expertise may be due to the fact that most companies do not have enough challenging work in that particular skill-set, so their workers don't get the opportunity to develop to the same level of expertise. 
  • It could be that you have worked for a technology vendor and are at a very high skill level with their products. 
  • There are many reasons why an individual can reach this level of expertise.
  • This is usually the least secure of consulting engagements as, almost by definition, the client company does not see a need to maintain this level of expertise full-time.  Nevertheless, it is also one of the higher paying categories—for the same reason.

In the next installment, we will discuss the details of how to best perform in each role and what soft skills are required to succeed.


Related Topics:

Back to main topic: Team Building
Resolution is the Primary Goal
The Application & Network Performance Analysis Team (NAPA)™
The Missing Link in IT Management
Mentoring in IT
What's So Great About Packet-Sniffers?
Testing Enviroments--Cost Justification
The Technical Enterprise Practitioner (TEP)™
The New Information Technology Marketplace
The Ethical Conflicts Created by MBO Incentive Programs
Horizontal Knowledge and Vertical Knowledge in the IT World
Inter-Silo Communication in IT Organizations

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