Why do many businesses hire consultants?
While it’s true that most small companies don’t have the budget to hire an entire team of consultants, the number of consultants that companies have actually increased over the past decade.
That’s because of the boom in technology and the rise of outsourcing.
“You can have people on your team who do work that you can do yourself,” says John Leung, who directs the McKinsey Global Institute’s business consulting program.
“In the past, if you had one person doing all the work, they would be a distraction.”
For that reason, many companies are outsourcing their consulting work to a third party.
But a growing number of companies are also outsourcing the business development aspects of their consulting.
As a result, some small businesses aren’t even sure how to hire a full-time consultant.
One in five small businesses have no full-timers, according to McKinsey, while only 6% of companies surveyed said that a full time consultant should be paid an hourly wage.
“The cost of a consultant is really high,” says Leung.
That can be a deterrent to hiring one, especially if you are already well-known in your industry.
A consultant, Leung adds, can cost you about $200,000.
And because consulting is so important in a small business, it can be difficult to get the right person hired.
“I’m a big believer that if you can get an outside perspective, you’ll find somebody who is a better fit,” says Scott Eisner, the CEO of the consulting firm Eisner Associates.
In the last five years, the cost of consulting has increased by about $50 million per year, according in a recent McKinsey report.
The report said that consulting costs in the U.S. rose $5.4 billion, but the total cost of the practice has remained stable.
But while many companies aren’t hiring consultants anymore, the practice is still prevalent.
“There are consultants everywhere,” says Eisner.
The McKinsey consultants say they’ve seen a rise in the number and quality of consulting jobs. “
The problem is that we have this whole trend of outsourcing, so there is not a lot of good information,” says Oren Eizenstat, a consultant in Boston, who is the author of the book “The Consultant’s Toolkit.”
The McKinsey consultants say they’ve seen a rise in the number and quality of consulting jobs.
“For me, it’s been a good opportunity to get to know some of the consultants,” says Ryan Haney, who heads the consulting practice at A-List Associates.
“They can be very knowledgeable about a business, they can be incredibly efficient, and they’re good at communicating with the client.”
And even if you’re not interested in consulting, there are plenty of opportunities to work with a full team of people.
According to McKinson, more than 3,000 companies have created their own consulting teams.
And they’re all hiring.
For example, consulting firms are creating more than 1,200 full-timer companies, according the consulting report.
In some cases, companies are using a team of about 20 to 20,000 people, but even these small teams have become quite large.
For the top consulting firms, it means they are adding more than 100 full- and part-time employees in a given year, which adds up to nearly 10,000 jobs.
A McKinsey consulting report said some of these firms are even using virtual teams for full- time jobs.
And McKinsey’s report said about 1,600 full-service companies were adding their own full- or part-timing teams.
These firms typically hire consultants to manage all aspects of the business.
McKinsey also found that more than half of the firms were hiring consultants for the same positions that they were offering.
“It is becoming increasingly common for companies to offer consulting as a standalone, high-pay, flexible-time, and hourly position,” according to the McKinseys report.
“While the average consulting salary for a fulltime job is now $1.3 million per annum, the average hourly rate is $6,000 per year.”
And some companies are even hiring full–time consultants for their team-building events, such as business meetups.
The McKinseys consultants also found more than 50 companies are now using their consultants for a variety of other roles.
For instance, in some cases they are hiring consultants to coordinate marketing and public relations campaigns.
McKinseys reported that companies are increasingly hiring consulting for customer support and customer service agents.
In addition, the McKinays report found that consulting firms were employing a team size of about 200 to 250 people, which equates to more than 10 full-term employees.
According a McKinsey study, about 30% of the companies surveyed were hiring part- time consultants.
“We have an enormous amount of knowledge on how to use a consultant to do this,” says Aizenstat.