Comments on: How Much Does a Full-Time Employee Really Cost?

By: Stephen Sweeney

Stephen Sweeney — Mon, 02 Nov 2009 03:29:35 +0000

Kevin, the main idea of this post is that the monetary cost, including both hard and soft costs, of a contractor and an employee are pretty comparable. Are there pros and cons of each? Absolutely. As you allude, many are rooted in the differing incentives and “unintended consequences” of those incentives. I’m not advocating that using contractors is ideal in every case. I’m actually not advocating anything in particular … I hope that you check out my previous blog post, Part I, which proposes that the decision of whether to hire or use contractors should be rooted in business strategy. http://partnerit.com/2009/10/to-hire-contract-or-full-time-8-questions-to-help-you-decide/ I hope that you’ll find that posting useful.

By: Kevin

Kevin — Sat, 31 Oct 2009 02:36:20 +0000

Wow, pretty one sided article there. Might want to at least point out a few of the benefits of the full-time employee route. The most obvious one is that if you continually go the contract route you’ll have an employee who is interested in short term goals rather than the long term stability of the company. Then throw in the fact that you’ll be continually training (policies, procedures, business processes) said contract employees vs. having a full timer who once you train them they’ll retain that knowledge.

By: Stephen Sweeney

Stephen Sweeney — Fri, 30 Oct 2009 19:34:29 +0000

Henry, What can I say? Not all contract staffing companies are equal. How many others have a blog like PartnerIT.com? Perhaps I should have written, “Third, good contract staffing companies have the interest of the client in mind.”

By: Henry

Henry — Fri, 30 Oct 2009 17:09:54 +0000

“Third, contract staffing companies have the interest of the client in mind”
Really ? I do not think so . I have been with 4 staffing companies as a contractor. It seems like they only care about my time sheet so they can collect money on time.

By: Stephen Sweeney

Stephen Sweeney — Thu, 29 Oct 2009 13:44:57 +0000

Dheeraj, Wow. It sounds like you’ve had some pretty bad experiences with consultants. I definitely don’t agree with most of the generalizations that you are making. Here are my comments to your comments …

First, I’m pretty certain that the math is correct but if you see a math error, please let me know and I’ll correct.
Second, using contractors (and please note that I’m specifically referring to contractors, not consulting engagements) still requires management to ensure that the tasks, project, or functions are being performed adequately at the least. Oversight prevents much of what you’ve seen and articulated.
Third, contract staffing companies have the interest of the client in mind. If the contractor is not performing, then the contract staffing company works to put the right person in place … who can perform and fit with the organization. That said, any vendor should have the client’s interests AND their reputation in mind. As such, most of the consulting companies that I’ve worked with pay very close attention to being on-time and on-budget.
Forth, we have many clients (and I would consider that a representative sample of a very large set) who use contractors exclusively for specific functions not only long-term but perpetually. In these cases, the decision fits within their business plan on how they operate their business, and is culturally compatible with their organization.

Last, the decision to hire, use a contractor, engage consultants, or outsource to a managed service has to be rooted in the business strategy of the company or department. I wrote a blog on that last week and encourage you to check it out if you have not already. Framed that way, the appropriate management would be allocated and expectations set to maximize the chance of successful execution of the plan.

By: Dheeraj

Dheeraj — Thu, 29 Oct 2009 04:00:17 +0000

I don’t think you are doing the math right neither are you focusing on the problem. The key to a hiring decision is the question why hire anyone? consultant or employee and a common answer is one person can not do it all.
If seen from this perspective, the numbers look a lot different. The process of hiring an employee and all the management spend is to keep that person involved in the focused effort of growing the company.

Mark my words,

A Consultant will NEVER (99.99%) follow or advice a path to follow that gets them out of there.

I have seen examples of these to nth degree where a consultants drag feet by offering more of the same while the premise of the process is change.

This whole old school calculation is not only wrong but a worst possible choice for any company. Consulting is strictly short term staffing, if you ever need a consultant for more than a few months (6-8) then you have a problem that you need to fix and for the most part that consultant will neither fix that problem nor will they help you fix that problem, to top it all they just might hide it under the carpet, play politics to misguide you or create other distractions to keep you occupied worst, give you big misguided dreams that completely set you on a wrong path, ANYTHING as long as you pay the consulting company..