Fog Creek Software
Discussion Board




Do firms even hire longterm "consultants" anymore

I offered to forward a resume of a friend 1 to friend 2 who is director of IT at his firm.  Friend 1 has been one of those perma-consultants at his current gig for about 3-4 years.  (He was finally told a fulltimer would be taking his place next month)  So friend 1 sends me his resume, and adds "Can they do consulting or FT?  Either is fine." 

The comment struck me.  The entire "perma-consultant" thing always eluded my sense of logic (and budgets!)  It was hardyl for traditional temp work, where you pay hoiurly for an added man for a few weeks.  And maybe in the true sense of "consultant", where the person played a role differing from that of an inside employee (like an outside expert, but still with "temp" connotations) 

It did seem like a convenient way to pay someone a lot of money, which was necessary during the labor shortage.  But from what I read (so it must be true!), this is hardly needed anymore. 

So I ask, do companies even hire "consultants" for semi-permanent positions anymore (6 mos.+)  And if so, ....why? (again)

Bella
Tuesday, August 05, 2003

I've had a lot of gigs like this in the past, these days they tend to ring me up ad hoc, but its a continuation. 

It was never that high a pay, in fact it was a way for companies to reduce your rate, if they claimed you for 6 months or a year then they weren't willing to pay what you'd normally bill on a per project or daily rate.  Naturally.

Sometimes those kind of gigs got to be more trouble than they were worth because you couldn't move on some snafu always dragged you back.  Becoming enmeshed in the company's politics didn't help either.

Though its always cool to get invited to the Company Christmas do.

Simon Lucy
Tuesday, August 05, 2003

Companies don't have to pay consultants benefits, nor do they pay employment taxes on the consultants. This is generally 1/4-1/2 of the cost of an employee.

However, if you have someone sitting in a company-owned chair at a company-owned workstation being paid hourly for 40 hours/week and working on what they're told to do and told how to do it, then they are legally an employee no matter what the company calls them, and the "contractor" status will only last until the IRS hears about it.

Philo

Philo
Tuesday, August 05, 2003

i am a long term consultant, working 2 year long contracts for 2 different places. (each a continuation of a previous year long contract) i bill each at $10K/m. It is mainly because the companies like me, i think.

.
Tuesday, August 05, 2003

>> "i bill each at $10K/m."

What do you do that is worth $10,000 a month?  I have never seen more than $9/hr.  Are you ripping these people off?  or you just lieing to us about what you make?

No one, let me repeat, no one is worth $10,000 a month.  I don't care what you do or how good you claim to be.  You're taking these companies for a ride.

I wonder why jobs are going to India?


Tuesday, August 05, 2003

Uh, $10k/month for half-time is $120/hr - well below what would be considered "absurdly high" rates for an IT consultant. (Hint: MS Consultants average billing around $200-300/hr)

Philo

Philo
Tuesday, August 05, 2003

You seem to use the word 'consultants' in a US sense.

This could be confusing for some.

Generally, in other parts of the world I believe people use the term 'contracter' for someone who is paid hourly and not a full time employee.

A consultant is someone from PWC/KPMG/Accenture/DC etc.

LCS
Tuesday, August 05, 2003

>> "Uh, $10k/month for half-time is $120/hr - well below what would be considered "absurdly high" rates for an IT consultant. (Hint: MS Consultants average billing around $200-300/hr)"

That's still absurd and $200-300/hr is even worse.  Nobody is worth that amount of money.  It's a product of ignorance and greed.  Why are jobs going to India?  Because of greed and ignorance.


Tuesday, August 05, 2003

I don't think they ever did.
Firms usually hired consultants for a few months to a year and then just let the guy stay until he left or was asked to leave. With rates so low it's not worthwile for a "consultant" to work as a perma-temp techie. It's better to either go fulltime or try to do contract projects, really consult, and bill appropriately.     


Tuesday, August 05, 2003

That's still absurd and $200-300/hr is even worse.  Nobody is worth that amount of money. 

You're worth what you're paid. If you'll accept less there are many companies willing to exploit you. Beware of people that say  "Nobody is worth that amount of money", they are the first to steal from you.


Tuesday, August 05, 2003

One Vp explained, that that consultants are capitalized and depreciated, while employees are expensed. That is an employee earning 1 dollar counts a 1 dollar of expense, while a consultant counts at 33 cents for 3 years!

Wake up dude
Wednesday, August 06, 2003

Why are those rates absurd? I've charged much more than that and, in return, the employer gained:

- $100 million boost in market valuation
- rock solid application that people didn't have to worry about
- met crucial deadline, keeping customers and stockmarket happy
- senior executive came out looking good even though he had potentially made a major mistake

Another .
Wednesday, August 06, 2003

[$200-300/hr]
"Nobody is worth that amount of money. 

You're worth what you're paid"

So, if he is paid two or three hundred, he is worth that much. However, nobody is worth that much, so... he does not exist.


Wednesday, August 06, 2003

So if someone paid $300 an hour for your company is responsible for adding 100m to the valuation, then it isn't worth it?

I don't understand.

Konrad
Wednesday, August 06, 2003

In my experience the perma-consulting gigs is offered by companies that does not realize IT is a core business function for them.

Say you have a company in the financial sector, banking, insurance and the like; to make upper management in these type companies is damn near impossible if you have a technology background. The club is all made up of MBA type people who thinks programming  is just fancy typing.

This brokenness of upper management thinking that IT is a costly department and not a cost-saving department, that saves costs or increases turnover for the core business people often leads to problems in the hiring process.

Its a truth that as long as you turn a profit you can do pretty much whatever you like to do on the middle management level, but when your department is considered a cost only then you have to ask upper management to be able to hire people. Most times those requests are declined.

As long as broken upper management thinking exists, perma-consulting deals will, because thats the only option middle management has to staff their departments.

Anonymous(this time around)
Wednesday, August 06, 2003

I propose everyone in America becomes a consultant and then goes back to their work place.  No one works for anyone else.  Then instead of working for $10.00hr we can all charge $300hr for our work.  I'm not talking unions here.  Down with the union.  Up with consultants.  Want me to work in the plant assembling cars?  That'll be $300hr... so sorry.

Greedy Greedy Lieing Pigs
Wednesday, August 06, 2003

I've been working on a long term gig for over 2 years now with probably at least a few more years more to go.

Some companies simply don't want to have deal with the overhead of having additional employees. My contracts are typically six months in length, so every six months they can re-evaluate if they want to continue the relationship.

Works well for them. Works well for me.

Mark Hoffman
Wednesday, August 06, 2003

$200-$300 /hr? Forget that. Go for the real money...

http://www.ajc.com/business/content/business/0803/03mirant.html

Bob
Wednesday, August 06, 2003

sounds like sombody didn't know how to estimate their worth and is a little p*ssed about it!

"
Wednesday, August 06, 2003

Maybe instead of trying to drag everybody else down, you should see what you could do to bring yourself up?

"
Wednesday, August 06, 2003

GGLP,

You can lead an idiot to knowledge but you cannot make him think. You can, however, rectally insert the information, printed on stone tablets, using a sharpened poker.

Mark

Mark Pearce
Wednesday, August 06, 2003

Re: Mirant

Now there's a growth industry:  bankruptcy consulting!

Jim Rankin
Wednesday, August 06, 2003

>It was never that high a pay, in fact it was a way for companies to reduce your rate

At $100-$150/hr, it was hardly a way to reduce rates.  It was a way to pay someone out the wazoo. 

> Companies don't have to pay consultants benefits, nor do they pay employment taxes on the consultants. This is generally 1/4-1/2 of the cost of an employee.

Maybe 1/2 the cost of a $30k employee.    But not when youre billing $20k/mo.

Oooh!  HMO = $350/mo.
Oooh!  Fica = $500/mo.
Not even one day of billing, you hypester...

Bella
Wednesday, August 06, 2003

When I said "consultant", I was implying "indep. contractor", not some consultant from from big shop, like the Big 6, or big tech firm like MSFT, ORCL, etc, or even body shop.

Bella
Wednesday, August 06, 2003

Most sensible companies don't want to lose their good people. If they have to keep someone on as a contractor to keep them, they'll do it.

I've had contracts 3+ years long, that were in theory 6 months with possible renewal.

In fact, thinking about it, I have always left contracting jobs myself - i.e. I have *never* had a contract expire without an option of extending from the employer.

dude
Wednesday, August 06, 2003

Konrad, I was questioning the claim that the stated rates were high, or were unjustified.

In the case I gave, from my experience, the company that paid me a lot of money gained at least $20 million in direct appreciation in stock value directly due to my work. The ongoing appreciation after that was much higher and was also due to my work.

On top of that, the manager that hired me turned out looking really good even though he had made a mistake that could have turned into a disaster.

Another .
Wednesday, August 06, 2003

hi. i was the guy who posted the original $10K/m per client figure. i arrange the contract as a consulting retainer agreement, not as an hourly itemized contracting wage.

I am a hybrid sysadmin programmer. I set up and maintain the entire IT infrastructure. This includes working with telcos to provide connectivity to the office, maintaining the internal server room, dealing with oracle and sql server, dealing with networking to all the workstations, dealing with the IP phones, doing backups, etc. If any of that goes down, i am the guy who has to fix it.  I try to lock that down so I have to deal with it as little as possible.

My other role is to help internal teams with application development. The development at both places is very similar, but one place is pure research whereas the other place is commercial. I am a "guru (i guess)" on a few kind of weird platforms, and with programming in general (I have a degree from MIT and 10 years of experience) so I am able to quickly point junior guys in the right direction.

I also try to do a lot of research which I share with the right people at work. Thus I'm getting paid more for being the guy responsible for the systems, for mentoring people, and providing research and experience, than I am for just programming. I probably would not be able to charge even half of what I do now if I was just doing typical programming contract services.

.
Wednesday, August 06, 2003

*  Recent Topics

*  Fog Creek Home