There are only three legitimate times to hire a consultant.
If your company or department is about to hire an outside resource or if you are an outside contractor, look at the situation and ask yourself these three questions:
1) Is this a competency that is missing internally that we need to utilize quickly? Examples of that would include needing to build a forecasting algorithm with high level mathematics that don’t exist within the company or advise on international copyright laws which your in-house counsel does not know.
2) Is this a short-term need for which it would be foolish to build long term staffing? Examples would be year end auditors, physical inventory counts or high peak workload in a particular department.
3) Is this a politically tinged initiative or project? It may be best to bring in an when delivering hard news, driving change among headstrong management or brokering an agreement between powerful stakeholders.
If you answer “yes” to one of these three questions, then an outside resource is likely the best solution.
If, however, you think there is a need for a long-term resource, you may want to reconsider. I am thinking specifically about a company that regularly pays top dollar to bring in outside Project Managers and Change Management teams for strategic company initiatives. Each year in the budgeting process, EVP’s include the six to seven figure line item to bring in a bevy of consultants for their projects. If the company looked holistically at their needs, they would realize that they could build or hire internal resources to be project managers or change managers and utilize a shared resource costing model for the projects year after year and save millions of dollars.
As a consultant, I don’t want to put myself or my brethren out of work. But I can assure you that ethical consultants will tell you that unhealthy relationships exist when clients are too dependent on outside resources. The times that I have been brought in that I think were very smart include when senior management needed external validation on a project’s assumptions or business case, when systems integration required detailed knowledge of technical requirements that outstripped the IT team’s experience, and when a project had to be supported by multiple departments or external partners who had the ability to derail the project.
Before investing in an outside resource, think of these three questions. Before making a pitch to a client, ask yourself if you can honestly meet one of these three needs.