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Drawbacks to Using Consultants and Contractors

One of the primary drawbacks to using consultants and contractors is their high cost in relation to onboard staff. The rates of critically skilled consultants from key suppliers or major accounting firms can range to thousands of dollars per day per individual. But if the need is urgent enough, expense may not be a prime factor.

A drawback that occasionally occurs in larger shops is the adverse affect on employee morale. Consultants and contractors who are highly skilled in a critical technical area may dismiss the need to be good team players. In their minds, their extremely high rates may justify an insistence on priority treatment in order to optimize their time on the clock. Thorough interviewing and reference checks can usually mitigate this concern.

Since most consultants and contractors bill on an hourly or daily basis, there is always the concern that some may not work as efficiently as possible; more time equals more revenue. Three areas prone to this problem are the use of email, voice mail, and meetings. Email is an excellent mechanism for distributing simple, one-way information to many recipients. It typically does not lend itself to activities such as brainstorming, problem-solving, or personnel issues in which tone, emotion, and reactions can easily be misinterpreted. When consultants or contractors engage in these activities, a task that may have taken only a few hours can drag on for days or even weeks.

Voice mail and telephone misuse is another source of inefficiencies among consultants and contractors. They often neglect the simple technique of leaving a detailed message on voice mail about the nature of a call when a called party is not available. Instead, the consultant or contractor asks only to have the call returned, with no mention of subject, topic, or the issue at hand. This usually results in numerous rounds of time-wasting "telephone tag." Efficiency-minded consultants and contractors can often resolve issues with voice mail by simply providing specific questions, information, or responses.

Meetings with consultants and contractors can become a drawback from two standpoints. The first is simple mismanagement of meetings. Commonly accepted meeting practices such as advance online invitations; agendas; objectives; action items; minutes; and the use of a scribe, timekeeper, and facilitator can significantly improve a meeting's efficiency and effectiveness. Contractors, and especially consultants, need to conduct numerous meetings as part of the performance of their duties, but few follow many of the common meeting practices described above. Also, unnecessary meetings are sometimes held by consultants and contractors. A brief face-to-face discussion or even a telephone call may accomplish the same result as a costly and time-consuming meeting.

A final drawback to using consultants and contractors is the issue of hidden costs. The total cost of employing a consultant or contractor is not always apparent when the initial contract is drawn up. Some of these hidden costs include office space, parking, and long-distance telephone use. Most consultants today have their own notebook computers or access to desktops. But an independent contractor who is employed primarily to do coding work may require access to a company desktop computer, ability to input data directly into company resources, login authority to the company network, and printing services. All of these activities require setup time, administration work, and other expenses not specifically spelled out in the initial contract.

Today's urgent demand for and diminished supply of specialized IT talents makes the use of consultants and contractors an attractive alternative to costly permanent headcount. Understanding and managing some of the extra benefits and hidden costs of these expensive hired guns can make your short-term investment in part-time labor pay off for the long run.

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Last Update: November 17, 2020