The Consultancy Market: What you need to know

Just as there are many types of consultancy you can specialize in, there are also many work arrangements available to consultants. The consultancy market is competitive and dynamic space that offers a rewarding profession to those who join the ranks. But before you can get to work as a consultant, you have to decide where you will work or who for.

Where do consultants work?

Will you work for one of the Big Five? How about a temp agency? Or are you ready to strike it out on your own? Each of these options comes with pros and cons. Your first task as a consultant is to determine which option is the best fit for you, your abilities, your needs, and your aspirations. To help you along the way, we’ve broken down the three types of consultancy opportunities available to you.

Management Consultancy Firms (The Big 5)

The first employment option in the consultancy market is being hired by one of the Big 5 management consultant firms (or similar companies). Who are the Big 5? Usually, we refer to the following companies as the big players in consultancy.

  • Accenture
  • Deloitte Touche Consulting
  • Ernst & Young
  • KPMG Consulting
  • PriceWaterhouseCoopers

Historically, the core business of these global firms was the provision of compliance based services: accounting, auditing, and taxation. While these core services remain central to the success of each of the Big 5, they now offer a diverse range of highly profitable corporate consulting services developed alongside the core compliance based offering. They consistently offer benchmark best practice information that their brand specializes in. Due to that brand specialization, they do not customize comprehensively to clients. Organizations hiring from the Big 5 pool essentially purchase the brand – not you as a consultant.

Understanding the consultancy market - the perks of the Big Five

Pros:

  • They attract top talent and work with Fortune 500 companies around the globe.
  • They will train you in their branded way of doing business.
  • You will learn a methodology for delivering their products.
  • You will travel for work (not fun) – extensively.
  • You will represent a respected brand.
  • You will work hard and get a great training base which helps acquire business experience quickly.

Cons:

  • They charge the highest rates for their consultants; however, you only get a fraction of that cost as the consultant doing the work.
  • You are not independent – you are an employee of the firm.
  • You deliver their branded products and deliver them how they tell you to.
  • They are highly competitive internally.
  • You will travel for work (not fun) – extensively. You are a commodity and you go where they send you – period.
  • They often create environments where it is hard to maintain a work/life balance.
  • They have a high burnout rate.

Partner with Temporary Personnel Agencies

The second type of consultancy employment is through Temporary Personnel Agencies. These are commonly known as Temp Agencies. With this option, consultants are hired on short-term contracts to temporarily fill a need or a gap in skills within the client organization for a project or program.

How to get contracts as a consultant

The Agencies act as brokers in the consultancy market – who take a percentage of the daily rate being provided by the client organization. This fee is to cover the costs of managing payments to the partnered consultants and to profit as a business. Agencies do business development to reach client organizations and then provide the skill set required (a consultant) to meet the needs of the project or program. The best agencies recognize consultants as a client as well and seek to provide win-win scenarios for both the organization and the client.

Temporary Personnel Agencies tend to fall into three categories based on size and/or client reach.

Large Agencies have a strong infrastructure and a large network of contacts. Consultants are often treated as commodities to deliver services to the agencies clients.

Medium Agencies are still big enough in terms of infrastructure to bankroll regular payment; however, they provide a more personal touch with their consultants. They tend to know them better and can offer more “boutique” or customized services to organizations because they are well aware of needs of their clients and the expertise of the consultants they put forward.

Small Agencies make up the largest number of agencies. Often they are less discriminating on the proposals they go after, meaning the pull on consultants time/effort is far greater because they tend to respond to every request for proposal in the hopes of getting something. They also do not have enough money to bankroll a consistent paycheck – so the consultant will only get paid when the agency receives money from the client organization. This could mean a 6-8 week delay in getting paid.

Understanding the Consultancy Market

Pros:

  • You can be an employee, sole proprietor or incorporated business and partner with an agency.
  • You can find an agency that suits you and fits your needs as each agency is different.
  • You have the opportunity to work well and become a “top of mind” consultant – so sustainable work becomes less of an issue.
  • They will run all the HR and form filling required to get you the job and get paid.
  • You have the flexibility, autonomy, and independence to determine when and where you work.
  • You will have the opportunity to check out many different organizations/cultures.
  • They open the door for you to start developing a network based on your reputation.
  • You will gain skills and experience from every contract you take.

Cons:

  • You may feel isolated.
  • You may be treated like a second-class citizen on the job.
  • You may feel a lack of certainty about income.
  • You will not have a pension plan or paid vacations.

Go out on your own

The third employment option in the consultancy market is to be an independent consultant. This is by far the most labour intensive and time-consuming way to work as a consultant because you need to be responsible for every aspect of your business – marketing, business development, proposal writing, financial invoicing and tracking, and all the administrative work. Not to mention the legal liabilities you will need to cover off through incorporation and insurance. Running a business is the ongoing work that needs to take place while you actually deliver the consultancy service to your clients. If you have a great network to start with, it may be more manageable; however, if you are starting from scratch, this level of effort could be more burdensome than beneficial.

Being a consultant - Run your own business or work for others?

Pros:

  • You are truly independent. You are your own boss, running your own business.
  • You have the chance to grow your business beyond yourself and start managing other consultants.
  • You can pick your industries and drill down into your area of expertise.
  • You will learn how to run a business which is a universal skill that will benefit your career.

Cons:

  • This is the most time consuming and labour intensive way to consult.
  • You will spend more time doing administrative work rather than actual consulting.
  • You have no guarantee of continuity of work.
  • Your work never ends.
  • You will find it hard to achieve work/life balance.

Consultancy 101: Where Consultants Work

Your Career in the Consultancy Market

If you are serious about making a career out of consultancy, you need to do some research. This is a competitive job market and the employment options available to you will vary drastically. Consider what you need as you start your career, what you will want as you progress, and what you end-goal is. Are you more suited to the Big 5, a temp agency, or are you best to go it alone? Navigating the consultancy market is your first decision to building the right consulting career for you.

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