Consultants; specialized professionals or companies who sell their services by the hour. Sounds expensive, does it not? You may have considered hiring a contracted employee or a consulting firm to help you with one or several portions of your business, but didn’t move forward because you assumed these professional consultants would cost you too much money. Well, it’s time to think again. In reality, these consultants are providing you and your business with tons of advantages which can save you big bucks and help you grow.
Utilizing consultants is not a new idea. Many business owners have wised up to the idea of hiring consultants a long time ago. But, it is an idea which has definitely become more popular since the recession. From start up entrepreneurs to small business owners and even large, established corporations, business have started harnessing the power of these services more and more.
For example, Xan Hood hired seven contract employees to get his cash-strapped startup clothing line, Buffalo Jackson, up and running. Hood attributes this decision to how he kept his company, “Lean and mean.”
Specifically, what advantages could contracting out to consultants mean for your business? Here are just 6 of the ways that hiring consultants can help save your company big bucks:
1. Less Government Paperwork and Expenses
While there is certainly paperwork associated with hiring a contractor, it is miniscule in comparison to hiring a full-time employee. Full Time employees require you as the employer to make payments and contributions on behalf of your employees towards:
–Social Security and Medicare
–State Unemployment Compensation Insurance
–Workers Compensation Insurance
When you hire a contracted employee or contract out to a consulting firm, you don’t have to deal with any of these expenses. This in itself will save you a pretty penny.
2. Lower Overhead
While you will most likely pay a consultant more per hour than you would a full-time employee, you will typically spend less on them in the long run. Beyond cash you don’t have to fork over to Uncle Sam, you do not have to pay for your consultants’:
–Benefits (such as health and dental insurance, paid time off, maternity leave, 401K, tuition reimbursement… the list goes on and on)
–Equipment (such as computers and printers)
On top of that, you can typically pay a consultant for fewer hours than a full-time employee. Think about how much “non-productive” time you are paying your full-time employees for: think bathroom breaks, company meetings, chatting with coworkers, etc etc. With consultants you are only paying them for the time they are actually spending working. AKA you are only spending money on time that is spent making you money.
3. Less Time Interviewing and Onboarding
Think about the time you have to spend as a business owner interviewing potential employees, going through new hire orientation with them, filling out and processing paperwork, etc. Time is money, and this is time that you could be spending on tasks that could be directly making your company more money. Or, if you have a Human Resources department that takes care of these processes for you, think about the money you are having to spend in payroll for this department.
When you contract out to professional companies or individuals, you don’t have to worry about any of this time spent interviewing and onboarding. You spend a little bit of research time finding a reputable company or contractor, discuss terms with them, and then they’re ready to go. No endless interviews. No time consuming paperwork.
It’d be nice to think every individual we ever hire will be an instant fit. Unfortunately, that just is not the case. Using consultants also gives your business more amount of flexibility to hire and let workers go. This is especially true if you hire a consultant for a specific task. Once the project is finished, you and the consultant can part ways amicably. They will be hunting for another job and you will no longer have the expense of paying them.
Then, if your need for them arises again, you can try to hire them again. But you are not having to pay them for the weeks or months in between projects, and you don’t have to worry about the hassle or cost (or potential legal issues) of hiring and firing new employees frequently.
5. Reduced Exposure to Lawsuits
Speaking of potential legal issues and costs… federal and state laws give employees a wide array of rights (aka legal claims). But, consultants are independent businesspeople. Therefore they are not protected by many of the same government regulations which your staff would be. They do not qualify for:
–Minimum Wage – Staff has the right to receive at least minimum wage. And for employees who qualify, they have the right to receive overtime compensation.
–Discrimination – While consultants are protected from racial discrimination, they are not protected from many of other discriminatory details that your staff are, such as: nation of origin, gender, gender orientation, and religion.
–Unions – Consultants can’t form a union. Your staff can.
–Family Sick Leave – Your staff has the right to leave work to care for sick family members and bond with a new child. Your consultants do not.
Typically, consultants have honed their chops working in a specific field. They have become experts in the field that you are hiring them to do work for you in. They are skilled at doing the job you are hiring them to do. So, they can help increase your bottom line because of the great work they are able to do for you.
If you hire a contracted web developer, you know that they know what they are doing. They are able to provide you with the best design for your site, the most streamlined layout, the cleanest code, the most user-friendly site, and the most beneficial tools. This can help your website to be more successful, thus increasing your bottom line. The same thing goes when you hire an internet marketing consulting firm.
When you hire a professional company on a contract level to take over your internet marketing for you, you can rest assured that you are paying for the best of the best, and that they will be able to bring you the best results possible… thus increasing your bottom line.
About the Author: Jasmine writes about the latest in business and marketing. She loves helping entrepreneurs and small business owners learn more ways to better compete and find success in the business world.