Consultant+Vs+Employee

1. Explain when and why you would use a consultant vs employee. What are the benefits and drawbacks of each type of report. (30 points) 30 **Benefits of consultants** Contractors may have more diverse experience especially the ones we need. They can be more specialized and qualified on the area of work. They are not locked to one desk and to one organization. So, they have the opportunity to work on more diverse issues and learn more about market needs. They can learn more by working on different projects and to different companies on similar topics that can contribute their experience and level of knowledge. Due to the contractors' varied experience they usually don't require training. They generally need short orientation training at the beginning. So, you can obtain the results you wanted in a relatively short time. Contractors don't add to the "head count". Companies don't need to add their staff. The financial tie with the contractor will be over as soon as the contract requirements are met. Even it looks expensive at the beginning; it can be cheaper in the end since the company will not pay to the contractors any more as in hiring. Contractors usually focus on the topic mentioned on the contract while full time employees may have many responsibilities. It makes contractors faster regarding the goal. Deal with the contractor can be terminated quickly and easily while terminating a contract with hired employees are difficult, time consuming and requiring more care to legal issues. **Drawbacks of consultants** Contractors often cost more than full time employees. That is more possible when you hire them through an agency. Estimating the contract time period is needed for budgeting purposes. Estimation can be harder since you don't know the exact capabilities and assets of contractor. Also there can be some variables that you are not aware and the contractor dismissed. Sometimes estimation process can take a week or three months. Contractors' loyalty is to themselves. If a contractor feels that he may not have much of a future with your company, he may start looking for a more reliable revenue stream and possibly leave you at his convenience, not yours. As every other company or people they have to care about their own future. You need a very good planning and contract to get the result you want from the contractor. You need to control their execution to make sure that they are doing what you have asked for. You should have knowledge about the job put on the contract to avoid mistakes and overcharge by contractor. You need to know about contracting market conditions. You need time to find an eligible and convenient contractor for you. If the contractor is not eligible to meet your requirements you may lose much more time than expected. **Benefits of employees** In general, full time employees are more committed and loyal to the organization since they have mutual interests in the organization. They have a better understanding of the context and they are a part of organizational memory that is valuable when needed. They can help us save time, money and assets by reminding us past experiences and projects. Many big companies value their experienced employees regarding their contributions that stems from serving to the same organization for a long time. Full time employees are cheaper in the short term. Contractors are more expensive than full time employees even the costs of benefits and other expenditures made for full time employee are included. It can be considered as an investment to our organization through people. Sometimes full time employees are better suited for the specific task/job at hand. People make fewer mistakes by the time since they learn about the topic so do organizations. That is called learning curve. Learning curve can be long and severe for a contractor. However, full time employee has the advantageous of learning curve due to his experience in the organization. We can recognize better and know better full time employees by the time. So, we can learn or have a real idea of the capability of our organization. Hiring contributes esprit de corps in the organization by avoiding circulation of people and having a stable personnel structure. This is useful for creating organizational ID. **Cons of employees** Full time employees can sometimes be less deadline driven. They can think there is tomorrow always to finish their task. Terminating full time employees is much more complicated than terminating contractors. There are many laws surrounding the termination of full time employees. They can lose their excitement on the job and make the job a routine. That is not good for the organization since they will not be able to create value.

1. Explain when and why you would use a consultant vs employee. What are the benefits and drawbacks of each type of report. (30 points) 22, when and where you would use each was the integral part of this question. Staffing your IT team can be complicated in a fast paced technology era. Programming languages that were the next big thing can become nearly obsolete in a couple of years. Following trends can help an IT manager stay on her game, but is no guarantee. IT managers need to follow the hiring process more closely than other departments. Human Resources can assist in the screening process, but may not understand some of the programming languages and how they may translate easily (or not so easily) to other development settings. Sometimes, when the job is highly technical in nature, outsourcing may be the only option. Outsourcing has many benefits. The company does not have to worry about paying unemployment if the job doesn’t work out, nor do they have to pay a severance package. Human resources does not have to pay for employee benefits or provide special training for consultants.

The drawbacks are that consultants usually cost a lot more money than a regular employee. Often they are project driven and do not participate in the daily operations, but that is not always the case. Sometimes, the consultant may move on at the end of the project when the employer wishes for them to stay aboard.

 **CONSULTANTS are often hired when an organization needs **  · Additional staff to work on short term projects  · “Damage repair”  · Expertise that current staff does not have  · Interim position while searching for the full-time replacement  **It can be advantageous to hire consultants because **  · There are no benefits to pay <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">Employers can terminate the contract as needed <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">Employers can avoid other HR issues/costs such as bonuses, additional training, raises, promotions, tuition reimbursement. <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">Consultants may have connections or be able to help your organization establish connections to a customer, client or service provider. <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">Consultants can accomplish a project faster because they don't have all the other responsibilities that a regular employee would have. <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">Consultants often have a broader base of experience. <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">Consultants don’t add to the “head count” which can look bad to upper management. <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">Consultants can be selected for special expertise and will not require as much training to become productive. <span style="font-family: Arial,sans-serif; font-size: 10pt; line-height: 115%;"> ** <span style="font-family: Arial,sans-serif; font-size: 10pt; line-height: 115%;">There are disadvantages **<span style="font-family: Arial,sans-serif; font-size: 10pt; line-height: 115%;"> ** to ** **<span style="font-family: Arial,sans-serif; font-size: 10pt; line-height: 115%;"> hiring consultants ** <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l3 level1 lfo3; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">Hourly cost is more than full-time staff especially when hired through an agency <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l3 level1 lfo3; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">No company loyalty- may or may not do a great job; can leave at will <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l3 level1 lfo3; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">Manager may have difficulty determining, for budgeting purposes, the duration of the contract

**<span style="font-family: Arial,sans-serif; font-size: 10pt; line-height: 115%;">It can be advantageous to hire permanent staff because ** <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l0 level1 lfo4; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">They will become an integral part of the operation and will develop legacy knowledge which can be tapped in the future. <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l3 level1 lfo3; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">With good management they will develop company loyalty. <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l3 level1 lfo3; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">They will perform many tasks (other duties as assigned). <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l3 level1 lfo3; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">They could be counted on to work more than 40 hrs as needed. <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l3 level1 lfo3; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">Excellent employees can be selected to be groomed to advance through the organization. <span style="font-family: Arial,sans-serif; font-size: 10pt; line-height: 115%;"> **<span style="font-family: Arial,sans-serif; font-size: 10pt; line-height: 115%;">There are disadvantages to hiring permanent staff ** <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">Long-term cost is more than contractors; requires support of the HR processes: benefits, bonuses, additional training, raises, tax issues, performance appraisals, disciplinary action <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">They are more difficult to terminate than contractors <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">They may have other responsibilities within the organization (committees, inter-departmental projects) <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">They probably have many projects within the department so their time is divided <span style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -.25in;"> · <span style="font-family: Arial,sans-serif; font-size: 10pt;">They may have limited base of generalist experience when compared to contractors