Platt Perspective on Business and Technology

Social networking and job search 26 – working in-house, working as a consultant and your constraints box

Posted in consulting, job search and career development by Timothy Platt on December 4, 2009

I have two goals in this posting: delving a bit into the differences and similarities of working in-house and working as a consultant, and looking more fully into the constraints box we bring to any job search and to our career decisions in general. I will simply note for now on that second point that it is the walls to this constraints box that we simply take for granted without examination that will limit and hurt us, and in our job searches and in managing every other aspect of our careers.

Most people do not automatically put the question of working in-house versus working as an independent consultant in the list of constraints box qualifiers but I would argue that any a priori filter that we bring into any job search as a fixed restriction belongs there. And fixed or not it is important that we at least know and understand both the constraints box limits we set and why, and with what possible costs and/or benefits.

When we work in-house:
• We generally work long term as an employee with the same firm or business. But at the same time, and judging from employment trends that did not begin with our recent economic downturn, long term employment is never certain with the possibilities for downsizing and outsourcing and business realignment from mergers and acquisitions, etc. always there.
• We generally think in terms of being eligible for benefits. But for smaller businesses and even some of the larger ones benefits like health insurance coverage and 401k plans are not always offered, at least to all full time employees. Even when they are offered the qualifiers for receiving benefits (e.g. full time employment with the business for at least X months) may be extensive before new hires are eligible for anything. And benefits may not be very extensive as offered even after these qualifying requirements are met (e.g. low coverage level/high co-pay health insurance plans and no or very limited 401k employer matching). Healthcare reform legislation under discussion in the United States may address health insurance coverage concerns here, but this is not just an issue for the United States and there are other benefits that may or may not be offered and under restricting terms when offered at all.
• We generally think in terms of achieving a level of certainty as to where we will work, live (so as to maintain a reasonable commute), where our children can realistically go to school and so on. This might really apply, unless our on-the-job travel requirements change or we are told we have to relocate to a new, distant office if we are to keep our job.

When we work as a consultant:
• We generally think in terms of moving from job to job and business client to business client. But I know a number of consultants who work for the same client business long term and even for years at a stretch. Among other things, when a client company hires a consultant they do not have to take on the indirect costs of healthcare coverage, vacation time and other in-house employee benefits for them so hiring consultants can be a valid solution. I will add that consultants are generally paid out of different lines in the budget than are in-house employees and this can make the business financials easier too. So consultants can begin to look like a good long term answer to a number of business operational problems and concerns.
• We generally think in terms of not getting benefits. But not all consultants work as stand-alone business persons or for small firms. Some work long-term and even for entire careers with larger consulting firms that offer in-house benefits.
• We generally think in terms of always having to look for that next client and assignment, dividing our professional time into working on a current assignment and making sure we say working as it ends. But this might not be a significant issue if we work for one of those larger consulting firms where they have specialist staff who work full time identifying and cultivating clients and developing new consulting assignments for their consultant staff colleagues. And if you are working with a client company that hires consultants long term, you may be in much the same position as their in-house staff for job stability (which may or may not be very stable.)

These days the most reliable difference between working in-house and as a consultant with a business almost sounds like the selection of forms used by the business to report your earnings for tax purposes! That is an exaggeration, but not always that much of one.

The important point here, citing in-house and consultant options as a working example, is the need to really know the differences and similarities in the options you potentially have. As stated above, it is the unexamined ones that will come back to hurt you, and the untested assumptions that will unnecessarily limit your constraints box and your opportunities.

The next entry in this series will look into working at a set office or other business location, telecommuting and other work site alternatives. As a preview I note here that options like these can serve as job priorities in your search, as negotiation points and as walls and barriers in your constraints box.

6 Responses

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  1. geovanny said, on December 4, 2009 at 10:14 pm

    great post

  2. josie erent said, on December 11, 2009 at 6:38 pm

    Your topic of consultants is rather flawed. There are corporations out there hiring contractors who are renewed on yearly contract for the purpose of not paying employment fees. The problem with this is that these companies keeping renewing their contracts form year to years….How can you define a contract working working for a company for 8 years. This is a clear case of a company avoiding payment of employee deductions to the IRS and they should report these companies immediately. There is certainly a short term benefit to hire contractors…but to insult the US taxpayer who is makes cases wants a full time job….is a real social and ethical issue. Laws are certainly there …the will power to enforce these laws and these companies should be ashamed of themselves for exploiting these individuals.

    • Timothy Platt said, on December 11, 2009 at 7:13 pm

      I pay my taxes and would prefer that everyone else do too so we all participate in society as on a level playing field. OK, taxes are not always equitable but the basic principle still applies as to what I would prefer, and it should apply to corporate citizens too. I was not addressing the issue of tax strategies and the way some businesses use them to limit or avoid paying taxes in hiring consultants and other non-in-house employees. I was simply pointing out that regardless of employer reasoning, longer term consulting and related assignments do happen.

      I add that I know people who have worked long term on the same consulting assignments where taxes were not involved as an underlying reason, but limits imposed by organizational silo structures and indirect benefits issues were. The hiring manager was unable to hire in-house for key positions but was permitted to bring in consultants on the relevant budget lines for that, and long term. That, I add can mean paying a lot more money for the same help. So as far as budget levels and overall costs are concerned, this can get really complicated.

      I add thank you for bringing up a good point and for your comment. Please feel free to comment on other postings too and I will reply, Tim

  3. josie erent said, on December 11, 2009 at 6:40 pm

    You may have studied biology but laws and ethics are a human issue… Not everyone wants to be a contractor

    • Timothy Platt said, on December 11, 2009 at 6:59 pm

      I did not mean to imply that everyone would or should seek to be a contractor, but merely set out to highlight the fact that from an employee’s perspective, the distinctions can blur and both for work done and time on the job, and for benefits received. Whatever you prefer, it is important that you really know your options so you make your decisions as fully informed as possible.

      Thanks for your posting, Tim

  4. […] in a real sense is a continuation of a posting I added to this blog and this series last month: Social networking and job search 26 – working in-house, working as a consultant and your constrain…. I wrote that posting with an intention of provoking thought, and even disagreement and some of the […]

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