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I've run a consultancy. They're not making anywhere near the money you likely imagine. There are several major sets of costs to consider. One set is costs di
by fbags 13y ago
I've run a consultancy. They're not making anywhere near the money you likely imagine. There are several major sets of costs to consider.
One set is costs directly related to employing you. Benefits, employer paid taxes, equipment, insurance, office space, a fraction of your manager, and so on. These alone are hefty.
A second set is buffer to pay you when you aren't being utilized. A well-run consulting company might expect 80% utilization, so 20% of the time you're incurring salary plus all the above costs and they are receiving absolutely nothing for it. A more typical consultancy might have even lower utilization rates.
A third set is the costs of customer acquisition and account development. There are expensive staff who do a lot of expensive things solely to get the contracts signed in the first place. And if a consultancy stops attempting to grow, it's at grave risk that a few existing customers will leave for one reason or another, and they'll be left in a terrible spot.
A fourth is the cost of finding somebody like you in the first place. If I'm hiring a junior employee it might be something like $10k direct, plus the time associated with sourcing, vetting, and interviewing candidates. For a senior employee, it could be a lot more than that.
Put all of these factors together, and the profits simply aren't nearly as hefty as you'd imagine.
- moron4hire 13y agoEvery consultancy I've ever worked at started threatening to fire me whenever I dipped under 95% billable time for more than... a day.
- Retric 13y agoDepends on where your working, I have been on the bench for 3 months in a row without issue.
- chucknelson 13y agoI think it's highly dependent on the firm. In my experience, some of the larger ones will tolerate people at 3-6 months (or more) of "bench" time. I would think it's because of the size and they can't babysit everyone, but automated reporting sure helps catch these instances (and mid-year or annual review time too).
- reeses 13y agoWe decided to view it from the opposite direction. 'Bench' time means lab bench, which works well as most of our actual employees[1] are grad students and postdocs. We support their research and have a publication policy that puts their dissertation work first. When we have interesting RFPs from consulting clients, then we pull people away from the bench. It's a great way to retain people, have flexibility in the projects we take, and have significant depth and breadth for a small firm. [1] we also very heavily draw from a pool of highly trusted subcontractors, many of whom are former employees. Because of our experiences with them, we go to them first and they all give us first crack at their availability.
- adrianpike 13y agoYikes. My friend, you're working for the wrong consultancies. They're not all like that.
- moron4hire 13y agoThat would be why I don't work in those places anymore. My choice.
- moron4hire 13y agoI'd be curious to check out the places that you think don't act that way. I like to think I can tell the nature of a place by the corporate bullshit they put on their website. Care to make a wager?