Sub-contracting work continues to grow in popularity. This, of course, may include offshore sources, but professional services overall is a growing industry and is especially prominent in the UK. Most people who have worked with consultants and contractors have a horror story or rave review; consultants equally have stories about nightmare clients and brilliant working relationships. Sub-contracting can be useful and effective when it goes well but it can be expensive and counter-productive when it goes wrong.
Here are eight myths to consider when working with consultants and subcontracts alongside ten pieces of advice about how to get the best out of the working relationships with consultants and sub-contractors.
1. Sub-contractors are better at meeting tight budgets.
Government can be the prime example here and often seem surprisingly resistant to learning that the lowest bid, up front, does not always lead to the lowest price in the end. If the lowest bidder always wins, the bidding companies will compete in a race to the bottom. This often leads to one of two outcomes. First, quality may be compromised to provide the services within the quoted budget. Or, second, the work is not or cannot be completed within the budget. The piece of work ends up running late and over-budget. Blame can be shared between both parties. Consultants may be optimistic about what they can deliver, the hiring party may have unrealistic expectations.
Best practice advice: Ensure deliverables, timeframes, costs are clearly specified up-front. Establish appropriate penalties or outcomes from delays from either party, link costs with deliverables, agree terms to specify what happens if and when the project goes over-budget.
2. The most expensive contractor is always the best.
The most expensive contractor is not always the best. The slickest pitch, the biggest name or the most impressive price tag does not always equate to quality. High prices may be justified, but beware of assuming price equals quality. Supermarkets know how well this tactic works, and often sell exactly the same product, from the same factory, but branded in two different ways: the cheap: “own brand” product, alongside an attractively branded product for triple the price. Don’t be tricked into overpaying for slickly repackaged own brand consultants.
Best practice advice: Check references, ask for samples of work, and review previous work. Do your homework on the consultant. It can be time-consuming and costly to thoroughly vet a potential contractor, but can save costly mistakes.
3. Consultants or external contractors will deliver results faster.
There are significant challenges inherent in sub-contracting, establishing a working relationship between two or more organisations. There will almost always be unforeseeable delays. Every delay from either party is likely to move the entire project back, and these delays can compound. Both parties should be mindful of how their own delays impact the project and remember that unexpected things can happen.
Best practice advice: Report on delays as soon as possible, ensure schedules are regularly updated with realistic timeframes.
4. Sub-contractors are better at meeting deadlines.
Even if both parties keep to the timelines, there may be a tendency to only just meet the timelines. Sending out a 30 page report for review the night before an 8am meeting helps no one. Providing stacks of documentation during the afternoon progress update meeting wastes everyone’s time when a roomful of people watch each other read the latest material. Similarly, sending a contractor 50 new documents to review a day before the final report is due will just lead to further delays.
What to do about it: Set communication, feedback, document delivery deadlines which align with deliverables. “All feedback needs to be received within X days”, “Documents will be sent X days prior to the meeting for review”.
5. Sub-contracting is cheaper than doing the work internally.
Run a cost analysis to ascertain whether some or all of the project could be done internally. Some type of cost-benefit analysis is useful to determine whether outsourcing is actually worth it. What are the advantages and disadvantages of both? What are the material costs (equipment, labour, expenses) as well as the advantages that are more difficult to quantify, like opportunities to develop talent internally, stretch assignment for current employees. Include best and worst case scenarios.
Best practice advice: Break each project into a list of specific deliverables, then consider the costs and benefits of doing the work internally vs. subcontracting.
6. Sub-contractors are more flexible in the scope of the work.
Beware scope creep. Everyone who has ever done project work knows that delving deeper into projects tends to increase the size of the project. Consultants may get irritated when they are asked to do more than was initially agreed in the contract. Clients, too, may get frustrated when they realize the project turns out to be more work than expected, or additional work has to be done for successful completion.
Best practice advice: Develop the contract and workplace clearly and carefully. Working relationships often begin optimistically, but unclear expectations and different assumptions on both sides can quickly lead to a toxic working relationship. Always spend the time to be specific about deliverables and/or what might be “extra” right up front.
7. Hiring and selecting consultants is easier than hiring employees.
Just as consultants work on a project-by-project basis, many business and organisations may need to employ contractors in response to varying amounts of work. It is much better to have a potential list drawn up ahead of time, than to try and find the required talent at the last minute. Many consultancies work on this model, with a list of potential consultants they could work with, if needed. Longer term thinking can help to ensure the needed, external, support can be drawn on very quickly.
Best practice advice: When possible, test consultants and contractors on small projects first. Find pieces of work that have the least impact if cocked up, and test consultants out before working on a larger project. This is akin to an employee’s “trial period”. Establish a list of “trusted contractors”.
8. Personal relationships with consultants don’t matter.
Many consultants will tell you theirs is a relationship business. Good consultants end up with most of their business being repeat business. Effective consultants keep their ear to the ground for potential work, maintain positive relationships with current and past clients; maintaining contact at realistic and respectful intervals. Smart businesses and leaders will do the same, and capacity building may involve keeping in touch with a few consultants on good terms. Also, all of the messages about motivation in this book apply equally to consultants. Good communication, strong relationships and happy motivated consultants will likely do better work. Many consultants say they are happy to put in some extra time, value or higher level of services to the clients they like.
Best practice advice: Relationships and communication should be considered when working with consultants. Disgruntled consultants are more likely to deliver sub-standard work and motivated, engaged consultants tend to go above and beyond.
High Potential: How to Spot, Manage and Develop Talented People at Work by Ian MacRae, Adrian Furnham and Martin Reed (Bloomsbury, £25)
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