What’s the difference between Consulting and Contracting? Good question! In theory there are distinct differences between these two travel jobs. But recently in the professional services industry, the lines have been blurring. Often times a Consultant will play the role of a Contractor and visa verse. But in general (in terms of planning out your career) there are a few key differences that you should know in order to position yourself in an ideal spot. And yes, both typically require a lot of travel!
In traditional consulting, the practitioner will be employed by a firm and payed a salary. However the firm will then bill the client hourly…and usually profit on the difference in pay. Because consultants almost always work over a standard 40 hour week, a lot of time ends up being “donated” to the firm. Engagements can last anywhere from a few weeks to a few years depending on the project. The role of a typical consultant is to direct the client toward the best course of action, since the consultant is playing the role of “expert” in a particular field. This usually takes the form of big picture strategy work which is characterized by data gathering, analysis and a recommendation (usually in the form of the all-mighty PowerPoint deck). People who opt for the consulting track will usually forgo a higher initial wage in hopes of long term stability and a promising career trajectory. Consultants who climb to the highest ranks will usually command a very substantial wage. Consulting is also considered the more prestigious of the two.
Contractors on the other hand, whether employed by a firm or working independently, will bill the client by the hour and get paid by the hour. They usually command a very high hourly wage, and as a result discourage the client from overworking them. Engagements can also last anywhere from a few weeks to a few years with the end result being a tangible product, system or software. Contractors are typically people who are highly skilled in a particular technology. People who opt for contracting will typically have limited upward mobility since they specialize in a particular technology and may not deviate from that path. Many times there is a limited hierarchy to climb and few ways to gain additional skills as the client doesn’t pay to teach but rather to obtain a very specific product or service.
To Sum it up:
The difference between the two business models is based on the output produced. A consultant will usually produce an intangible recommendation or strategy whereas the contractor is paid for producing a specific deliverable such as a working system, network or infrastructure. It comes down to the difference between soft and hard skills.
In my experience, people who opt for consulting are those who feel comfortable in a very structured environment and have a strong desire to climb the corporate ladder in order to achieve career goals. On the other hand, people who go into contracting are specialists in a particular technology that just want to work, get paid and go home. They tend not to care as much about politics or ladder climbing. But that’s just my two cents.