MaRS Library Hiring a consultant or an employee: The pros and cons
Hiring different types of employees can be a confusing but critical step in a startup’s growth plan. In deciding whether to hire a consultant or an employee, consider the pros and cons to see what best meets your startup’s business goals.
Option 1: Hiring a consultant
A consultant is someone who can provide you with expertise for many business decisions. They can be anything from a sounding board to your project leader. Whatever your requirements, there is expertise available, locally or globally.
Hiring a consultant: The pros
Your startup can reap some strong benefits from hiring a consultant:
- You only pay when you actually use the consultant
- You incur no overhead costs, such as providing benefits, a computer and a workspace
- They provide an objective perspective
Hiring a consultant: The cons
Relying on a consultant may also have some drawbacks:
- The consultant may not always be available. Other clients and priorities may affect your ability to meet deadlines
- Your knowledge of the consultant’s abilities may be limited and could affect the success and/or reputation of your organization
- Legal considerations may affect the consultant due to conflicts with competitive clients. In this case, consult a legal professional for guidance
Option 2: Hiring an employee
Hiring an employee: The pros
If it’s stability that your organization requires, choosing to hire a full-time or part-time employee typically gives you the consistency, dependability and availability that you desire. If you need your employee to work on a particular project, your ability to control and manage quality and deadlines would be greater than in the case of a consultant. An employee will be motivated to focus on your goals, rather than those of other clients.
Hiring an employee: The cons
Despite the pros of hiring an employee, some key disadvantages can exist:
- You risk hiring a generalist rather than a specialist
- You risk hiring someone with specialized knowledge that you may not use often
- You risk hiring an employee who is too junior (due to their affordability) and who requires a great deal of guidance
- You need to pay for their salary, benefits and other overhead costs even when they are sick or on vacation
What makes better sense for your startup—a consultant or an employee?
Choosing between hiring a full-time employee or a consultant should be based on your business needs. Review your startup’s budget and priorities to determine the right hiring decision.
Remember that what is right for you now may change as your startup grows and evolves. Study all of your options. This includes evaluating all the candidates and their strengths and “fit” with your current business stage. This will help you make the right hiring decision to achieve your business goals.