Why You Should Consider Consulting

    1 FREE Audiobook RISK-FREE from AudibleIn this weekly podcast, we discuss what it’s like to be a consultant and discuss career strategies for getting in and to be Why Consider Consulting?successful once you are in.  But there are a fair number of people who remain undecided whether to make the jump into consulting or to go to work for a traditional business.  Today we will talk about why someone should consider consulting as a career and why it might be a good career move.

    1. Why should people consider consulting?
      1. Well to start out, it’s an industry with estimated $391 billion (US) in global revenues with continued grown projected into the future.Listen_Spreaker
      2. Pricewaterhouse Coopers, one of the Big Four professional services and consulting firms, recently announced a revenue increase for FY 2012 of 8%; their North & South American revenues alone were up 13%.
      3. PwC also recruited a record 20,500 college graduates last year and expanded their workforce by 7%.
      4. Recruiting numbers by consulting firms were at record highs in 2011 and it looks like 2012 will increase even further.
      5. And there’s a good reason for this.  Many companies see consulting as an investment opportunity to either cut costs or reap higher return on their investments.
      6. For instance, let’s say a company brings in a consulting firm to implement a new software system.
      7. It may cost them upwards of $500,000 in consulting fees to perform this implementation, but they may see an annual cost savings of $100,000 and the potential for increased revenues of another $200,000.
      8. The investment in that system pays for itself in less than 2 years.  So as long as they can count on the assumptions for those numbers, they can look at that as a good investment.
      9. Additionally, many of these companies went through massive layoffs during what we’ve come to call “The Great Recession”, and many of those layoffs came in multiple waves.
      10. They’re very reluctant to make the commitment of hiring people for the long term.
      11. Because of this, they see consulting as alternative to full-time hiring. And that comes from two perspectives.
      12. First, when large projects need to be performed, they have the ability to pick and choose the talent based on their immediate need.
      13. Let’s say a company needs a team of IT professionals to implement that software system we just talked about.  That firm brings in their team, swapping out the necessary people they need depending on the phase of the project.
      14. As the project comes to a close, the consulting firm can gradually ramp down the team and assign them to other projects that are starting up somewhere else.
      15. The company may have another project to improve their HR benefits cost structure.  They may go to the same firm or to another one that specializes in HR benefits.  Either way, they get a team that specializes in whatever they need them for, and they don’t have the long-term commitment of hiring people with that specialty.
      16. Another way that businesses use consulting is simply for the need to augment their staff during a peek in their work load. Work doesn’t always come in a steady stream.  It may be seasonal, or perhaps a new government regulation causes them to need to get something done sooner than their current staffing allows.  Rather than hire one or two full-time employees, they may just need to augment their staff temporarily until they get over the hump.
      17. Here they work with recruiting companies who provide individual consultants to provide the specific skills for the work that needs to be done.
      18. More and more, companies like the flexibility of both of these approaches because they’re not locked into full time salaries with the cost of all of the benefits.
      19. They can change their staffing based on their needs and not have to worry about the costs and morale issues of laying people off that don’t fit their current business needs.
    2. So it appears that a major reason to consider consulting is because of the large availability of jobs.  What other factors should influence people to consider consulting?
      1. One of the biggest reasons is the appeal of the work.  As I just described, firms often have consultants come in when they need them for important projects.
      2. These are often mission critical projects that have executive level attention.  You may be working in newer technologies and building something of great interest.  There’s just more growth and interesting work to do.
      3. Another factor, especially for independent consultants is the freedom to focus on what you want to work on.
      4. This may take some time until you build up a loyal clientele, but once you get to that point, you can select the type of work and clients that you want to focus your growth on.
      5. And finally, consulting tends to pay above average salaries compared to other industries.  That lures a lot of people into consulting.
    3. Do you think consulting will be as lucrative as it is now for the foreseeable future?
      1. Consulting has historically been a lucrative industry.  There are individual businesses that fail in any industry mainly because they don’t have the skills or offer the proper services that the market demands.
      2. But I think there are a number of factors that will drive continued growth for several years.
      3. For one thing, as the economy improves I believe it will begin a steeper upward slope of improvement.  And demand for consulting services will continue to grow with it.
      4. Also, here in the US, healthcare will drive much of that.  As baby boomers continue to age, they’re going to continue to demand better and more effective healthcare.
      5. Many companies are trying figure out the best way to improve healthcare and reduce the costs of providing that healthcare.
      6. Those companies will turn to consultants to assist them on business side to become more efficient and on the healthcare side for medical research based consulting.
      7. Technology will also drive this.  The speed at which technology improvements come increases every year.  And it’s difficult for companies to invest the research and development to keep up with it.
      8. They’ll turn to consulting firms to advise them on high-tech trends and lead them to the most appropriate technologies.
      9. And like technology, strategy consulting continues to be a major source of consulting demand.  Industries don’t stay as stagnant as they used to.  Take publishing as an example.
      10. Years ago, publishers could plod along with the same strategies for years.
      11. The internet and more recently, hand held devices have turned the publishing industry on its ear.  Ten years ago, if you took public transportation to work, you’d see most of the people reading books and newspapers.
      12. Today, I’ll bet a larger majority of people are reading their content on hand held devices.  That might be the local newspaper, a book or someone’s blog.
      13. Some publishers have adjusted and some haven’t.  Many could use the advice of a consulting firm to help them identify industry trends and adapt to them faster.
      14. The automobile industry is another example.  They’ve had their up and down years and dealt with adjustments.  But over the past five years.  We’ve seen long-term lines like Pontiac, Plymouth and Saturn go away and one of the up-and-comers is South Korean-based Hyundai.
      15. Now Google is getting into the market with self-driving cars.
      16. Trends, technology and markets change with increasing speed and companies rely on consulting firms to provide necessary advice to help them navigate these strange waters.
    4. Are there certain specialties that one should focus on to get into consulting?
      1. Well virtually every industry uses consultants. Even consulting firms bring in outside consultants to help with things outside of their core competencies.  But there are some Industries and practice areas that most consulting firms have been focusing on.
      2. I think the biggest one, as I mentioned earlier is health care.  With the combination of aging baby boomers and the constantly changing requirements out of health care reform, there’s a lot of demand for consulting services.
      3. Additionally, there’s a lot of pent up demand for consulting services due to the lack of investment in IT.
      4. Particularly small to medium medical offices have been paper based forever.  Now, partially due to the new federal regulations, but also just to be more efficient and compliant with privacy laws, these medical offices will need to implement Electronic Medical Records systems.
      5. Most doctors are not business people.  And most don’t understand technology – at least not the non-medical related technology.  This will drive a lot of consulting demand.
      6. Financial services consulting will also continue to be big.  Any firm that can assist large and small companies with debt restructuring, global investment strategies and even improvements in complex supply chain efficiencies to reduce time to market will continue to drive consulting revenues.
      7. HR consulting is currently in great demand.  If a firm can learn from consultants how to lower the costs for employee benefits they will pay big money to gain that advantage.
      8. This is tightly interwoven with healthcare reform as companies learn the best way to provide health benefits to their employees under the new rules.
      9. Environmental consulting firms can be helpful to companies by specializing in reduction of carbon emissions and energy efficiency.  This is driven as much new government regulation compliance as to reduce energy costs.
      10. And finally, global expansion to emerging markets, namely India, Brazil and China.  Firms see a lot of growth in these markets and, lacking knowledge of these areas, they’ll turn to consulting firms to get that knowledge.  They may find a firm that has a presence in one of these regions or a firm that specializes in one of the geographical areas they want to expand into.
    5. How would someone decide that consulting is just not for them?
      1. Well it’s true that it’s not for everybody.  Consulting requires a certain lifestyle and attitude that doesn’t fit with all people.
      2. For one thing, travel may be a big factor.  Many firms, particularly the larger ones require significant travel.  You go where the work is and it’s not always in your hometown.
      3. You can get on a long-term project in another city and be flying to that city every Monday morning and home every Friday night.
      4. Some firms try to lighten that by allowing employees to come home Thursday and work either from home or in the local office on Fridays, but you’re still out of town a bulk of the week.
      5. There are people with family commitments that just can’t work that kind of schedule out.  In addition to that, there are people who just aren’t willing to make that sacrifice.
      6. I got to a point in my career where I didn’t want to miss anymore of my kids’ soccer and baseball games and other activities during the week.  I’m fortunate to be working for a firm that focuses only on our geographic area and there is little to no travel.  But that’s rare for consulting firms.
      7. Even without travel, consulting often requires a significant dedication of time.
      8. It’s not always a 40-hour a week job.  One thing companies like about hiring consulting firms and that they usually live up to their commitments.  A consulting firm signs a contract to get a project done by a certain date and their consultants generally put in whatever hours are necessary to meet that commitment.
      9. That can mean long days or even working weekends.   Again, some people have other commitments that restrict their ability to do those kinds of hours.  Some others just don’t want to be saddled with that kind of commitment.
      10. Another reason that it’s not for everyone is that it requires a lot of flexibility.  You can be on a project one day and be told that you need to go to another one at another client site the next day.
      11. I’ve been told the night before to be in another city the next day.
      12. Some people like to have a more stable and predictable environment and know what they’re doing from day to day.  Having to switch gears at a moment’s notice is just not a desirable way of life for some people.  They like the consistency of going to the location and working in a more consistent environment.
      13. Finally, the consulting business can be cyclical. In the recession of 2008-09, we saw layoffs in the consulting industry and a dip of 5%-10% in earnings.
      14. It’s grown back dramatically since late 2009, but for many companies, when hard times hit, the first thing they start cutting back is the consulting staff.
      15. They do that to reduce their temporary staff in hopes that they don’t have to cut anymore into their permanent staff.  There are significantly higher costs to cutting permanent staff than consultants.
      16. Companies also cut back on investment in bad times, which reduces the level of project-based consulting business.
    6. Who should consider consulting?
      1. Well certainly anyone who can deal with those issues I just discussed.  If you’re willing and able to travel, don’t mind rolling up your sleeves and working long hours to get a job done once in a while, if you can be flexible in a changing environment and can stomach a cyclical market, you’re probably most of the way there.
      2. But there are other factors in play here.
      3. It’s important to enjoy challenges and be a problem solver.  Consultants don’t just go to work to put in their time.
      4. They’re engaged and passionate about what they’re doing.  Working extra hours is usually not a hardship because they know that they have a goal that they’re working toward and they want to get it done.
      5. It’s also good to be a team player.  When the team has a committed date they’re working toward, everyone pitches in to get the job done.  If you’re not afraid to do work outside of your job description and don’t mind helping others, then you might be a good candidate for consulting.
      6. If you have a knowledge specialty in some area like healthcare or IT or some specific industry, that may make you a good candidate for consulting.
      7. But I wouldn’t rule someone out because they don’t have skills or knowledge in the top industries.
      8. Consulting firms look for people with those skills but will also consider your ability to solve problems and be flexible.
    7. Any final thoughts on the why folks should consider consulting?
      1. As humans, when we like something, we have a tendency to want others to like it too.
      2. I like asparagus.  It’s one of my favorite vegetables. But I have some very close friends that don’t.
      3. I’ve also come to the realization that, as much as I love consulting, it’s not for everyone.  There are some people that just aren’t cut out for it and it has absolutely nothing to do with their skills or capabilities.
      4. While there are skills and capabilities involved, it’s often more of a personality trait.
      5. But if I met someone that said they didn’t like asparagus even though they’d never tasted it – they just don’t like the way it looks – I’d highly recommend that they at least try it.  Then if they don’t like it, it’s for a legitimate reason.
      6. The same goes for consulting.  I know not everyone is going to love it, and while you can’t actually taste consulting, I think it’s to everyone’s benefit to understand what is involved in consulting.
      7. I hope I’ve given some people who were on the fence, some reasons to look into it further and consider it further.
      8. For some, it may turn out to be the start of an exciting and fulfilling career.

    Next week’s topic: Developing Trust with the Client

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