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Why large companies hire consultants -- even when they have staff
•Laura Khalil
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00:00 | 13:52
Ever wondered why big corporations would hire a consultant when they have staff
In this episode, you'll get a comprehensive understanding from your business mentor, Laura Khalil, who unpacks this notion, providing 13 illuminating reasons. Laura goes beyond the obvious, exploring the complex factors that often make consultants a more cost-effective and valuable proposition than full-time employees.
Solo service providers can be just as profitable as million dollar businesses. You don't need more staff, more products, or a bigger audience. Join 1000+ email subscribers who are learning how to sign bigger contracts every week --> https://laurakhalil.ck.page/
Hey everyone, it is your business bestie, laura Khalil, and I want to do a follow-up episode to what I talked about last week, which was all about why I like to work with bigger clients. Specifically, I was discussing working with Fortune 500, but any client that's larger than what you currently work with. Why I like doing that? Why I think it helps you earn more revenue, it's easier to work with, and I got one question over and over and over from y'all and I want to address it in this episode, and that question was okay, laura, it's all well and good that you want to work with large companies, but don't they have staff to do this stuff? Why would they actually hire a consultant? So in this episode, I'm going to share 13 reasons, 13 reasons why you could be hired by a larger organization, because they do hire consultants all the time.
Speaker 1:
In fact, I heard a statistic that I think it's by 2025 or 2030, half the labor force is going to be in a contract or consulting basis. So consulting is definitely growing. In fact, it has been growing since the last financial crisis of 2008. There's a lot of reasons why that is. In general, it's a lot cheaper to hire consultants than to pay for full time employees. But having said that, even though it's cheaper for the company, it can be way more lucrative for you, but only if you know how to structure those contracts and structure your timing. If you don't know how to do that, it can be erased to the bottom in terms of pricing and in terms of your time. I find it to be more lucrative to consult than to work full time, because I'm in full control of my time and I don't trade time for money.
Speaker 1:
So let's dive into the reasons why a company would prefer hiring a consultant and why companies who even have thousands and tens of thousands of staff will continue to hire consultants. So if this has been a block for you, keep listening. So the first reason is they don't have budget to increase headcount for full time employees. So sometimes money is coming from different buckets right Within an organization, especially a larger organization, and they may have discretionary amounts of money to put towards hiring a consultant or just it's sort of like can be used for anything, but they won't have that to put towards headcount. So that's a great reason why you could get hired. The second reason actually is that they have discretionary budget that needs to be spent. So if you've ever worked or are familiar with what it's like in a larger organization, you may have heard of the phrase use it or lose it, meaning that if there is discretionary budget and they don't use it within that fiscal year or within that quarter, they will lose that money. So there are actually organizations, believe it or not, that are trying to spend money and they want to spend it with you.
Speaker 1:
The third reason is they may need outside eyes on a project and a fresh perspective. For example, we're a full time employee and I really wanted to get a raise and I knew that the person who was going to give me the raise was really happy with a certain project direction. So I wasn't going to rock the boat, because if I rock the boat with this individual, it may affect my raise. You're not going to get fresh perspective, you're not going to look at it with fresh set of eyes, because you are more incentivized to get your raise than to innovate, and I hate to say that, but that's just a reality of what it's like to be a full-time employee in many of these organizations. Having said that, without innovation, all we have is stagnation, and so organizations will look for outside eyes. They will look for a fresh perspective because they can't get it inside. It's also not uncommon, especially in larger organizations, that there are people who have been there for a long time, who are just really used to the way things are done, and so that again is going to cut off any sense of innovation.
Speaker 1:
The fourth is that they don't have in-house experience in your niche. So if you are the type of consultant and I'm going to talk about content marketing for a second, because that's the world that I came from If you work in the world of content meaning you write different things for businesses and you can write everything from a resume to an obituary, to a speech, to a website you do not have a niche and you are probably struggling to get clients. So when you have a niche, when you have a very specific thing that you do, a very limited menu of services from which you offer the best of the best, that experience is at a premium, and a lot of companies may not have experience in that niche. They may not have somebody on the team who is really really good with that. As a direct example, within my business, within my consulting business, I was really focused on developer marketing.
Speaker 1:
Now you don't need to know what that is, but what it I'll to give you the the brief 10,000 foot overview. It's how do you market to software engineers or hardware engineers? And that is a very specific niche that I had, because I worked in the startup world for several years and honed in on that niche, and so I would go to work with companies who would say, well, you know, we're a software company, but we need this specific experience. We don't need someone who can write anything, we don't need someone who does consumer packaged goods, we need someone who knows this specific niche, because that's where we need help. And that's a different type of understanding than what we need and that's a different type of understanding than what most marketers who do, you know, just write anything would have. Okay, it's a specific audience, it's a specific way of talking to them. So niches can be all different types of things, but if they don't, if they don't have in-house experience in your niche, they may want to hire you and pay a premium Number five, let's say they do have in-house experience in your niche, but that individual is on a different project.
Speaker 1:
They still need the help on this project and they cannot split that individual into they're going to hire you. Number six they want someone unaffected by office politics to give perspective. So this goes back, similar to number three. They need outside eyes on a project. It happens in smaller organizations, it happens in larger organizations. There are kind of, in many ways, sort of fiefdoms that are formed and war rooms, so to speak, where you know teams are discussing how they are going to push through their initiative, even though it may not be what it, what would work best with another team. These are dysfunctional things. I mean, let's be real, this is dysfunction. Office politicking is largely dysfunctional. However, as a consultant, honestly one of my favorite things about consulting is I don't care, I'm just coming in to do a really good job and share my expertise with you. I am unaffected by your politics. They do not affect my contract, they do not affect my work. That's like a real power position.
Speaker 1:
The seventh reason is you're cheaper than a full time employee in terms of total compensation. So very often not always, very often you will be less in terms of total compensation than a full time employee Because remember, they have to pay their salary plus all their benefits and typically benefits between 50 to 100 percent of the salary If we have an HR person who's listening, they can actually inform me on that. So you're gonna be cheaper than that. Even if you're being paid more cash than a full-time employee, which frequently you will be, you're still gonna be cheaper in many, many cases. Okay, the eighth reason this may be a special project and they cannot find an internal resource to work on it. I have gotten many, many gigs because I've been put on a special project and they can't find anyone internally to work on it. This can happen if there is an internal resource, and by resource I mean a human, a person who doesn't wanna take the risk of working on a special project because that might be risky to their career. They may be just more comfortable with the status quo, so they won't accept a special project. So that's where you can come in Number nine.
Speaker 1:
They aren't sure where the market is headed and they don't wanna spend money on a full-time employee. I feel that full-time employees feel that they have more job security and every time we go through rounds of layoffs I'm like y'all, you have no more job security than a consultant. You really don't. At least in consulting. I know when a contract is going to stop and start, but the additional benefit of consulting is I can always expand my services and offerings for a client and grow my revenue within an organization that a full-time employee can never do. So if I'm consulting and they wanna add on another project or they wanna add on some type of work that I'm gonna be doing for them, if you're a full-time employee, you just gotta take it. If you're a consultant, that is an additional fee. So there is this wonderful sense with consulting that you can really seriously grow your revenue and start at a company and expand with them All right.
Speaker 1:
Number 10, the company or the leadership team or the business unit you're working with needs a consultant to break them out of a status quo. This is again going back, similar to a fresh perspective. But if you're working with leadership teams or the heads of business units and they kind of need someone to bring an outside perspective, this is super important. Number 11, the company has committed resources to a project and discovered midway that their full-time talent doesn't have the right blend of experience to successfully complete the project on time. Number 12, the company has lost a leader of a critical functional area and they need someone to close the year out. So it may be that they are going to hire for that role. This happens frequently with fractional C-suite. They often may want to actually fill that role with a full-time employee, but executive search can take a long time it can take between six months and a year in many cases to find the right fit. So they need someone as a stop gap. So that's a pretty nice and lucrative stop gap for you.
Speaker 1:
And the 13th and final reason is that consultants are just easier to manage. Yes, y'all, they are just easier to manage, especially if you are a professional. Okay, you do your work on time. You show up when you say you're gonna show up. You are a good listener, you understand the projects, you know how to ask for help. If you are a professional, you're gonna be a lot easier to manage. They don't need to worry about promoting you. They don't need to worry about any of the office politics with you. They know you're hired to get the work done and if you don't get the work done, you're out the door.
Speaker 1:
In fact, it's not very different for full-time employees, as I just said earlier, but consultants are typically, in my experience, they work at a very high level and the best ones are paid the best for a reason. So I hope this was helpful for you. If you've been wondering how could I ever work with a larger company, why would they hire me? These are 13 great reasons they absolutely would hire you. Now, if you actually want to learn how to go after those bigger contracts, you can either sign up for a VIP day with me or you can join my program, my mastermind, called Elevate, which is for women who are already in business, who are growing their businesses and want to 10x their revenue. I'm gonna share all the information on how to get in touch if you're interested in learning more in the show notes, and you can always find me over at bravebydesignnet with all details. Until next time, giddy up.
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