6 Reasons Why Companies Hire Consultants
There are many ways companies benefit from hiring a consultant, although some questions do arise about the reasoning behind it. Why not just have an employee handle the project? Why spend the time and resources to instill a consultant in what needs the company has, their challenges, strengths, and weaknesses, just to fill a function for a few months? Often, when consultants’ recommendations are implemented, employees often argue that the actions are not beneficial and do not reflect day-to-day business realities. On the other hand, there is the argument that consultants gather best practices from across an industry and can thus cross pollinate. From our perspective, here are 6 core reasons for companies to hire consultants.
1. An Outside Perspective:
Just as we often turn to friends, family, or a wise mentor to help us grapple with a personal issue in our lives, companies, likewise, turn to consultants for an external view and objective advice. A company might have plenty of in-house expertise for the matter at hand and may have an idea of how to solve a problem. However, turning to an outside, objective perspective can help lend some much-needed confidence and sanity checking. Consultant firms also offer the advantage of collective experience. Moreover, it’s easier for outsiders to connect seemingly disparate thoughts because they have fewer preconceptions than those working internally at a company. More importantly, an outside perspective has the power to enable companies to drive innovation.
2. Closing a Skill Gap:
Sometimes businesses need to tap into specialized skills that may not exist in-house. For example:
- Entering new markets or investment opportunities
- Modernizing and evolving a business to improve competitiveness
- Rethinking existing processes and practices
This is probably the most common reason why companies onboard independent consultants – to bring in qualified, proven experts with the skills to tackle a specific business problem or opportunity.
3. Staff Augmentation:
Companies often have short to medium-term staffing needs due to a variety of factors: e.g., recent downsizings, sudden expansion, a time-based project and the like. Consultants in this situation “plug a hole” for the company by filling the role of full-time employees.
4. They Want a Safe Zone:
Sometimes, when companies are working on a challenging problem or a controversial project, it can be hard for them to make decisions or take the necessary actions without getting wrapped up in emotions or politics, particularly when it comes to job layoffs, salary and benefit changes/reduction, and major operational and strategic shifts. Hiring consultants can be a way to reach the desired conclusions with sufficient political cover in case certain parties are unhappy (e.g., disgruntled employees) or things go wrong (“despite the significant cost uptick, we implemented XYZ’s recommendations to the letter – I’m not sure what we could have done better”)
5. Consultants – Masters of solutions:
Consultants have the rare privilege of serving multiple clients in the same sector and serving multiple clients facing similar problems across different sectors. This enables them to recognize common attributes of effective solutions, applying lessons learned in applicable situations. They may provide a fresh objective viewpoint about a problem from different perspectives. Consultants play a significant role in proposing new innovative ideas that can help a company to retool or reinvent itself.
6. The purpose of a catalyst for change:
Employees are often reluctant to accept or support any drastic organizational change. This is always a difficult dynamic to handle for many companies. Hiring a consultant becomes an effective option as they can do things without worrying about the corporate culture, employee morale, or other issues that tend to elicit high emotions and dissention in the ranks.
Whichever side of the spectrum one stands at in the ‘Why hire a consultant?’ debate, we believe these are core reasons as to why firms look to partnering with external consultants.
If you are an organization in the financial services sector and are looking to partner with a consultant for any of the reasons in this article, EZDynamic would be happy to have a chat with you. We are a boutique consulting firm that caters to the Financial Services sector. We provide client-centric and innovative solutions in the areas of Business Strategy, Regulatory Implementation, Technology, Change Management and Staff Augmentation.
Schedule a call to learn how we can support your organization.