The lucrative world of consulting lures many young graduates every year. Although the relatively high pay is a strong attraction, the path of a consultant is not always strewn with rose petals. There is quite a high bar for entry – expectations are as high as the pay. As a consultant, your social skills are often tested to the utmost, since you will be thrown into sink-or-swim projects, travel a lot and will be required to build a rapport with new people every few months.
In the current economic climate, hourly rates are also in an increasing crunch, emphasizing the need to stand out with exceptional skills. Furthermore, long hours at the office are standard, while contracts are often fixed-price, meaning no pay for overtime work. As a consultant, you also have to be self-reliant. You are your product, you are your own brand, and your reputation follows you. You’re only as good as the reference from your last project, so the pressure to perform is constant.
Consultants typically run their own business, so you have to be willing to take risks. Sometimes it is worth lowering your rate in order to win a contract at a client who could end up being a long-term customer. Clients are equally well-connected as job-seekers and follow social media, so you also need to be worthy of the trust that your clients will place in you. Confidentiality and tact are highly valued ‘soft skills’ in a world where there are many new entrants every season.
There are no paid holidays, no paid sick days, and no pension plan. During a career spanning more than 15 years, I’ve met some inspirational people who let me tap into their brains a bit from time to time. Here are seven factors from their experience and mine, to consider before deciding to dive into the shark tank.
1. Develop Specialized Skills
The base line for a career as a consultant is of course a set of strong skills in a sought-after area. This means that the best consultants are those who have a few years of solid experience. Income for consultants, or any salary for that matter, is based on the economic principle of supply and demand. If there are thousands of Java developers pouring out of colleges each year (not to pick on one area, just an example) then the probability of getting a high rate as a Java developer is slim.
Even within one area, for example Mobile App development, there are some niche sub-areas where there is not a lot of knowledge and experience yet. The most highly paid consultants pinpoint the areas of demand and work in their own time to build knowledge in that area. This is a continuous process. Sought-after consultants are constantly making reassessments of their skills and interests and whether their skills are still relevant.
Are you worth your salt? Be prepared to build and learn. Also, be prepared to travel. Why do companies hire consultants? The main reason is that they don’t have the skills in-house, but more frequently they have tried to hire top people locally without success. People working for a regular salary are usually not prepared to commute too far for work, since the expense is not recoverable on a regular salary.
2. Build Relationships
The career of an independent consultant is really based on relationships. When consultants are considered for projects, the people making the hiring decisions will hire and re-hire consultants whom they know well. Building up these relationships takes time and hard work. When working on a project, one gets to know people and their expertise. Be open and keen to share your knowledge, because this is how colleagues get to know you and in turn, they will share their knowledge with you.
Write documents and how-tos and contribute them to the project, this way you will be remembered positively long after you’ve moved on. Ask questions and try to gain an understanding of the broader goals and other parts of the project. Build up relationships with recruiters at contracting houses, and the way to do this is usually via referral from a manager on a current contract.
Sites like LinkedIn.com have also proven valuable to me, but mostly I was contacted by people who already knew me from referrals. As a side note, when using a networking site, I’m always very careful to set my privacy settings to the maximum. Some of the niche areas where there is a demand for skills are really quite small ‘cliques’ where most people know each other. Reputation and integrity matter.
3. Be Prepared To Work Long Hours
Initially, you are expected to work extra hours without compensation, because you have to show that you are willing to go beyond the basic requirements. This is how you show your commitment and make your mark. If possible, be willing to be in the office early to get a head start, but also keep an eye on the habits of your project leaders, and try to match your work day to theirs so that you are in the office when they need you. This is especially important at the start of a project, when you are still unknown. Nothing kills a reputation more quickly than a perception that you are hard to find when needed.
Here it’s important to note that some contracting firms pay per day, not per hour, and that contracts are mostly fixed-price these days, so it is quite rare currently to be paid for extra hours. Overtime hours usually have to be pre-approved and based on project requirements. In the late nineties and 2000s, consultants were able to work insane hours and be paid for all the extra hours. With current business realities, those days are over. Don’t be perceived as expensive. Start at a modest rate, be humble, and you will gain respect and be offered a higher rate based on your hard work.
4. Know That Independence Has Ups And Downs
Independence really means you are on your own. Your gross income would be higher as an independent consultant than as an employee, but you would have no pension or health care benefits and would have to provide these for yourself. It may also be harder to get a mortgage if you have unsteady income. If you apply for a loan, the bank would ask for many months of statements to prove that you have regular income. If you are in a committed relationship, it helps if one of the partners has a regular job with benefits, which could cover the independent partner.
This steady ‘basis’ also helps in negotiating financing for various needs. Another challenge of independence is that you have to find contracts on your own. Here again your relationships and track record are important. Most independent consultants keep a steady flow of work, based on past projects and connections. Some positive factors for independence are of course the higher income and you have a choice of which clients you would like to work for, to some degree. Furthermore, once you have gained a client’s trust, you might sometimes be able to set your own schedule, although increasingly this flexibility is becoming a rare privilege.
5. Be Willing To Take Risks
The economics of risk and reward show that a certain amount of risk brings a higher return. This is true in our career as well. Those starting out in their field might find it serves them well to spend money on training courses before landing a fixed job in the field. This can certainly pay off, because it shows potential employers that you’re willing to put skin in the game, and it also allows new opportunities to meet people and network.course it pays to do some legwork and research. Talk to people and gather different opinions on which areas are likely to grow in demand for skills. This is called an informational interview, where you may ask questions about a company, an industry, company culture or future prospects.
This conversation is not related to hiring or a specific job. Sources for contacts for an informational discussion include social networking, newspaper ads, job boards like monster.com, placement agencies, company websites, trade association meetings, job search engines, human resource contacts, trainers, teachers and recruiters.
6. Be Trustworthy And Responsive
Integrity is one of the most important unwritten rules in the world of work. Consultants sign non-disclosure agreements for most projects and are often entrusted with valuable company information. Integrity also means being true to your word. If you committed to delivering a piece of work on a certain date, your integrity is at stake if you don’t deliver.
Furthermore, quickly responding to requests for help or even adjusting to last-minute changes in requirements, is what sets a top consultant apart in a highly competitive field. The most trustworthy and responsive contractors are the ones who are always in demand.
7. Take Care Of The Goose
The one which lays the golden egg; that’s you. Eager young consultants get into a habit of working through lunch breaks, inhaling a sandwich at their desk and barely coming up for air during the day. The more successful people are able to sustain a well-paying consulting career by taking a balance approach. Take your lunch break, go out and see the sky. Get up from your desk every few hours and let your eyes rest. Financially, planning will keep you going strong. Since you are not entitled to health or retirement benefits, the only way to provide for your retirement or for a break between projects is by diligently setting aside enough money for at least three months of regular income.
Another factor in planning is taxes. A good tax adviser could save you thousands per year and many hours, because that is their specialty. As an independent consultant running your own business, you have to set aside money for taxes every month, since tax is not normally deducted from your invoices. This depends on the tax jurisdiction in which you live.