Why Be a Consultant? (Risks and Options Explored)

Making the move from permanent employment to consulting can seem daunting and risky.

After all, there are reasons why so many people are willing to make sacrifices for the rewards of a full-time job: a steady paycheck, reliable benefits, and a clear path to advancement.

But these advantages come with trade-offs: longer working hours, often with no overtime compensation, and high stress, to name a few.

Consulting offers an alternative path for those who no longer want the salaried lifestyle. Maybe that’s a director who’s no longer as concerned about paycheck as about trying new things, sharing their expertise, and making time for personal priorities. Or, maybe it’s someone looking to get their feet wet before getting back into the workforce.

The point is, by limiting yourself to permanent roles, you could be missing out on some incredible opportunities.

Consulting offers some valuable advantages for many people, but it’s often perceived to come with a prohibitive level of risk. A frank evaluation of consulting’s true risks and benefits can help you decide whether this path makes sense for your career.

Benefits of Becoming a Consultant

For many, the most attractive benefits of becoming a consultant are balance, flexibility, and variety.

Balance

Permanent positions may offer apparent stability and peace of mind, but one trade-off is often work-life balance. For salaried jobs, this may involve overtime and/or excessive demands.?The work has to get done, and if that’s on the weekend (or during your island vacation), so be it.

Consulting allows you to reclaim balance. By nature, consulting creates firmer boundaries to avoid the trade-offs of salaried work. For example, overtime isn’t allowed for most consultants, and if it is, it’s compensated at higher rates.

Flexibility

Consultants have more say in their schedules than permanent employees. As a consultant, you decide how much work you’re committing to with every engagement. You can even stagger projects to create extended periods of time off.

This flexibility extends beyond your calendar. Though many companies are bringing full-time employees back to in-person, in-office work, most are still perfectly comfortable with fully remote consultants.

Variety

Consulting offers a greater opportunity to meet new people within new environments. Consultants get to work with diverse teams on many types of projects, always learning and broadening their experience.

Sometimes, a manager, controller, or director loves their role and isn’t looking to advance to something else within their company down the road. Consulting offers them a way to share their expertise in different ways and settings rather than being pressured to take on more.

Fears and Misconceptions About Becoming a Consultant

Even if the benefits of consulting work appeal to you, you may still find yourself hesitant to get started.

Most of the common fears about becoming a consultant stem from misconceptions. Separating these fears from facts is essential to making a well-founded decision.

Fear of Losing Stability

A permanent position brings with it peace of mind — you have bills to pay, and you rely on that steady paycheck. At least, that’s the idea.

In reality, no job is truly permanent. In an ever-changing economic climate, even good people get laid off and find themselves unemployed.

A strategic approach to contract consulting can create a similar sense of stability to a full-time position. For example, you can schedule yourself as much or as little as needed and fix an hourly rate that compensates for any gaps in work.?The biggest change is that much of your job continuity now rests firmly in your hands.

Fear of Losing Equity

Start-ups sometimes offer the alluring benefit of ownership in the company in exchange for the loyalty and commitment of key employees. Missing out on equity opportunities is a legitimate concern for some.

The choice here comes down to your personal priorities. To make a decision, weigh the benefits of consulting against the sacrifices that come with holding equity — ownership that can often be held over employees as a reason to do more for less. You may find that you’re willing to trade equity for flexibility.

Fear of Increased Tax Burden

Many people believe becoming a consultant equals becoming a 1099 contractor — which comes with its own tax considerations.

Often, that’s not the case. When you contract through a staffing agency, more often than not you’ll work as a W2 employee for the duration of your engagement. Consultants contracted this way are also eligible for agency benefits like medical insurance, overtime pay, and a 401k.?

Fear of Being an Outsider

When you join and leave companies frequently, you may worry you’re missing out on company culture and other social benefits. It’s true that sometimes security and legal considerations create a barrier between consultants and full-time employees, but boundaries can have benefits. For instance, there’s no need for consultants to stay tied to struggling companies, and you can stay clear of workplace drama and company politics.

Why Be a Consultant Instead of a Permanent Employee?

Why do professionals choose consulting over permanent employment??

First, becoming a consultant gives you more freedom to focus only on the work you want to do. Many people have no desire to manage a 20-person team; they prefer to work in smaller groups. Others love fast-paced problem-solving in a young, growing business, but become dissatisfied when work steadies and settles into routine.

Consultants have the unique opportunity to choose their preferred environment rather than getting shuffled around in an ever-changing business.

Second, consulting work may be easier to land quickly. There’s demand for contract consultants in any market. When business is booming, companies employ consultants to facilitate growth and implement new systems or processes. When the market is unstable, businesses combat uncertainty and attrition by bringing in consultants to stabilize and support the remaining team. In almost any economy, consultants remain in demand, and are hired quickly!

Third, consulting is an excellent way to get back into the workforce after time away. You can get work quickly, ease into a full-time schedule, sharpen your skills, and get current insights into your industry. Consulting also broadens your network, making it that much easier to transition back to permanent work if that’s your longer-term goal.

Final Thoughts

The fundamental difference between consulting and permanent employment is that consulting builds work around your lifestyle, rather than building your lifestyle around your work.

The decision comes down to what you want your work-life balance to be. Do you want the flexibility to choose work that fits around other parts of your life? Or, do you prefer to be part of something big and build your life around your work?

Once you identify your priorities, you can be sure you’re making the right decision for you.

If you decide you’re ready for consulting, don’t hesitate. We can help you get started as a consultant — and guide you through searching, interviewing, and beyond. Apply now to test the waters or dive in!