White Paper: Managing the Consultant Lifecycle

Managing the Consultant Lifecycle

The consultant drug is an addictive one, as many businesses have discovered. To beat the competition, businesses need qualified and motivated individuals to investigate promising opportunities and – when the circumstances dictate – to push them through to fruition. To their misfortune, very few businesses have the luxury of a stable of readily available resources to assign to such endeavors. A seemingly unending emphasis on cost reduction has eroded workforces to their bare bones. With existing personnel operating at 150 percent capacity and significant roadblocks to hiring new employees in a timely fashion, the only viable alternative is to use consultants (i.e., contract workers) to plug resource gaps. Hiring consultants is a fast way to address resource deficiencies, but there is a downside. Compared with full-time employees, consultants are expensive on an hourly basis, and their knowledge departs the building when the work is complete. Most managers shrug off these shortcomings as the cost of doing business – and with good reason. When employed to deliver short-term expertise, consultants are arguably the most flexible and cost-effective option available.

Left unchecked, consultants no longer simply supplement the talent acquisition process; they supplant it. As the appetite for consultants grows, a corresponding increase in consulting spend materializes as a major blip on expense reports. The management team commonly reacts by instituting a zero tolerance policy – an immediate moratorium on consultants. But such a dictate unravels quickly. The need for skilled resources cannot be denied. Turning off the talent spigot can dry up a company’s innovation capabilities. The only alternative is to hire permanent workers, a tactic with serious flaws. Full-time employees are a cost commitment beyond the short term. And the processes to hire permanent workers rarely keeps pace with short-term needs. Gradually, managers feel the pain of the moratorium as their capability to marshal resources to address critical items is minimized. Failing to keep pace, these same managers push senior leaders to reconsider the moratorium. At this juncture, most senior leadership teams concede that a level of contract workers is necessary to provide the desired workforce flexibility. What they really seek is a program to manage contract workers that maximizes their benefit while minimizing their cost. Unfortunately, there are limited precedents. With the collapse of moratoriums, the baton is often passed to a sourcing team with a simple directive: Get us consultants, but at a reduced price.