When it comes to making the decision between being a consultant or an employee, there are many factors to consider. Being an employee offers more continuity than being a consultant, and many people feel more secure in this role. Employers may prefer the traditional commitment that comes with a full-time employee, while workers may prefer the stability of a full-time job with benefits such as health care and retirement. Self-employed workers will initially cost more, but they still expect to save between 20 and 30 percent per year, considering not having to pay for benefits, including Medicare and Social Security.
Along with that savings, think about the office space and the supplies you'll save. A full-time employee is likely to feel more engaged with their organization and, therefore, be more motivated to contribute to the well-being of the company. How much time are you willing to invest in training? If that position requires a long wait time to get it up and running, having a full-time employee might be a better option. A freelancer may choose to perform work outside of normal business hours, making it difficult to track your progress. By hiring a consultant, specific knowledge can be “bought” and, when distributed accordingly, kept within the company. In addition, there are situations where operations and projects clash when it comes to resources.
Rapidly expanding resources can be easily done by hiring outside consultants and assigning them to tasks. Although there are many situations where a consultant is right, employees are the best option when looking for a long-term commitment. In long-term contracts, the costs outweigh the benefits of a consultant, and a company could be better off if it increased permanent staff. A permanent employee provides stability and consistency. An employee is usually more committed to their work and is more likely to stay with the company for a longer period of time.
Consultants are less likely to commit to the project in the long term; if the project doesn't go well, they can choose to move on instead of staying and trying to fix it. Of course, there are intangible benefits of being an outsider; you can do a better job because personalities and politics don't affect you so much. Consultants are usually hired because of their expertise in one area and can then move between different projects as needed. Consultants are often more experienced than employees and can provide valuable information that may not be available to other team members. Depending on the configuration, the consultant works based on a schedule and milestones or on the basis of a contract and deliverables.
Consulting provides the best framework for digging deeper and working on a juicy project, and then being able to change the dial completely. Workers' compensation benefits and the ability to apply for unemployment insurance benefits are not offered to consultants who work as independent contractors. On the other hand, if you are already a professional with extensive experience in a field and you want to diversify your experience or dedicate yourself to self-employment, consulting can be a good alternative. A company that needs to hire an outside consultant for an extended period may find that the worker is better classified as an employee, especially if her contract is for a certain number of hours or months of work rather than being linked to the completion of a particular task or project. However, if you're an experienced professional looking for some challenges and (maybe) more money, working as an independent consultant is a good option. Consultants are a very useful and valuable source of knowledge, especially in cases where the knowledge is not within the company.
Consultants often charge higher fees than employees, which can add up quickly if the company depends on them for their regular work. The company hires the consultant for the duration of the project and pays him a fixed rate for the scope of the project or per hour for each hour of work. In addition, consultants could be more supportive than regular employees for new and uncertain projects with limited knowledge in the company. Making decisions between being an employee or consultant can be difficult due to all of these factors that need consideration. It's important to weigh all options before making any decisions so that you can make sure you're making an informed decision that will benefit both you and your employer.