Contractor, Consultant or Employee?

There are many valid reasons to support each of the above. And the decision to be made is often not an easy one. It is however important, and it can significantly alter the success of your objectives.

Should you be paying for expensive qualifications long term?

Many tasks associated with things such as acquisitions, downsizing, relocations, significant new business etc., require skills that may not be resident within your existing workforce. In these circumstances there are always highly capable and experienced contract managers and consultants available to step into the fray, get the job done and leave you with the option to continue at that level or downsize the role to one more appropriate. However just as is the case when recruiting, it is vital to investigate, evaluate and choose wisely.

A successful management career does not always translate into a capable consultant or contractor. The environment is very different and one not always compatible with someone with (perhaps) decades of experience in the corporate world.

Can your need be accommodated with a short term assignment?

In many situations the skills and personality required to review current circumstances and implement appropriate change, are quite different to those necessary for long tem success. Change is an excellent example. It takes a very skilled manager (and yes they certainly do exist) to negotiate the stormy waters of significant change and at the same time comply with all the requirements of long term success within an existing work force. Will the workforce rebel or relate to someone tasked with the numerous and often significant and aggressive challenges of change? Challenges that usually cannot be sugar coated. In circumstances like these the answer is often found in a contractor to come in, get the job done and then hand over to a competent manager with long term aspirations and skills.

This is only a consideration. There is no doubt that a skilled manager can effectively negotiate through a minefield of change, and achieve support and commitment from all stakeholders. The resulting support can then become an exceptionally valuable future tool.

At times It is also important to recognize that perhaps your existing managers just do not have the time or resource to carry out their own responsibilities, and at the same time deliver additional projects on time, and within service level requirements. Major (additional) tasks are perhaps the most obvious opportunity to enlist the assistance of appropriately qualified temporary personnel. They can be contracted for a specific task, managed by those responsible within your organization, and terminated immediately upon completion, with no disruption to the service levels expected by your internal and external stakeholders.

Do you have a variable requirement?

Embarking on a new venture? Establishing new facilities? Relocating? Introducing new products and/or services? There are many tasks that require a significant range of skills and experience.

A major relocation may require –

  • Sourcing of a new distribution centre
  • Analysis, procurement and installation of materials handling equipment
  • Scoping, procurement and establishment (or relocation) of technology
  • Recruitment of new or additional skills
  • Fit out requirements
  • Analysis of OH&S, governance and risk requirements and exposure
  • Relocation of existing facilities
  • Significant liaison with all stakeholders
  • Professional project management skills

…. and it is always interesting to see situations evolve where company personnel are expected to deliver required results, at the same time as carrying out their own responsibilities and maintaining required service levels. Individually skilled contract personnel are available on an as required basis to assist with all of the above.

Contract Personnel seem expensive. Are they?

A contractor will usually seem to be more expensive than a permanent employee. However there are many factors that affect this comparison.

  • A contract rate is all inclusive. No holiday pay. No workers compensation. No administration costs. No payroll tax. All are incorporated in the rate.
  • They can be hired (and fired) at will. On an hourly/daily/weekly agreement. When the task is finished so is the cost.
  • No distraction cost to your permanent workforce. What is the cost of taking your valued manager away from his permanent routine to deliver additional programs? It can be very significant in terms of service levels, cost and culture.
  • A contractor with very task specific skills can be retained which should result in less time, enhanced result, and a quick return to normal.
  • You only pay for time required. If there is no work there is no expense.

Employee, Contractor or Consultant?


The role of an employee requires no definition other than to say that he/she is most productive when clearly directed, supported, and managed within specific parameters. Distraction cost is very real and can be very expensive. So the strategy to outsource some tasks from your manager or employee can easily be justified, particularly for specific tasks when a specialist can be retained. If a contractor is retained it is important to ensure that your personnel understand the positive reasons for doing so, and not be left thinking that they are deemed to be incapable of also delivering an effective result. When in fact the real reason is that they are just too important to be distracted from their everyday activity.


The role of a consultant is to bring professional expertise into a business and advise. Some of the skills include, specific experience, analysis, interpretation, benchmarking, communication, reporting, planning, and program management. All at a high level of achievement. A consultant will generally be retained to bring understanding and structure to specific circumstances, and provide advice as to how company personnel can provide solutions. They are usually seriously qualified professionals from non-corporate sectors.


Your contractor is generally an individual offering skills achieved via significant and successful business experience. Preferably at relatively high levels in the corporate sector. They are usually focused on doing rather than advising, and seek the opportunity to not only advise, but engage with your team to “get the job done”.


Contractor, consultant,

All obviously have an important role to play. But the really important decision is yours to make. Which is the appropriate choice in your circumstance?

Don’t hesitate to bring in a contractor when there is a chance that your already overworked manager is about to disappear down the wrong rabbit hole, taking his all-important daily tasks with him.

Don’t hesitate to reward your manager with an important task somewhat beyond his normal scope if you feel he can deliver without detracting from his daily responsibilities.

And don’t hesitate to spend some hard earned money to benefit from the advice of a professional consultant when you have defined a task and know that help is needed to ensure the best result.

Managing these choices can be the most important decision you will make in achieving the best possible result.

Finally … please don’t make the mistake of not recognizing when the job is done, and it’s time to regain control.
If you’ve had consultants and/or contractors in your business well after the task has been accomplished, they probably shouldn’t be there, and you shouldn’t still be processing remittance advices!

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