Consulting or contract services

TODAY the need to break out and 'do something on one's own' has become the desire of the day. This is perceived as providing for greater flexibility, self-actualisation and fulfilment. Providing for other business, the services that are always needed but never usually available in-house, is an option that bearsconsideration. You could, for instance provide consultancy services in your areaof expertise, or you could extend client services as a contract serviceprovider. Deciding which of these is best suited to you is where the train ofthought can get derailed! Your decision depends on your personal priorities, theway you work, and your field of expertise.

What's what?

As a consultant, you will deal face to face with the organisations to which you will provide the service. You will require to look for clients, negotiate terms for the services you will provide them, agree on the ambit of the job to be done and look into all the tax and payment issues yourself. A contractor on the other hand will work through another party or organisation to provide services that are laid down as required by them. All negotiations are made beforehand, which include payment for the services and the parameters of the job to be executed.It is possible that a consultant would secure the custom from the client andoutsource the work to the contractor. Normal benefits are curtailed for bothcontractors and consultants, as they will not get group insurance, health andother perks that regularly employed people do. Flexibility comes at a price andthey will miss out on the goodies that employers generally extend to theiremployees.Ratna Bhide established Spic'n'Span Inc. that provides housekeeping services to organisations. She has been a consultant before she became a contractor. She confides that the compensation as a consultant was most attractive provided you could get your act efficiently together all the time. As the one out on a limb all the time, you have no backup but yourself and as you deal directly with the organisations, you are the fall guy every time something goes wrong. She decided to opt out of consulting only because there were two areas that drove her up the wall. These were marketing and bill collection. She remembers with horror the hours she spent waiting for junior functionaries to meet with her and then having convinced them to repeat herself at the next step in the hierarchy. Whenshe decided to start contracting her services through an intermediary, she foundshe had rid herself of all the woes that her consulting business had heaped onher.

Taxing questions

P. Shivanand, MD at Accord Consultants in Bangalore, Karnataka agrees with Bhide's comment about income. He confirms that consultants can earn 25 to 50 percent more than contractors. On the other hand, he reiterates, consultants have to take the time to zero in on the areas they can work in, sell their talent, billing, collection, finding and funding support contract services. In addition he makes mention of the uphill task he has in meeting his tax obligations, given the difficulty of the tax structure in the country. While companies today are happier outsourcing their work to consultants, they prefer contract services, the very services that he himself uses!

Shivanand says that both options are now popular in areas ranging from IT to temporary office staffing to accounting. Most companies, he continues, prefer to use contractors rather than consultants because contracting provides them with an easy way of checking the service providers' antecedents and track record. Consultants are more of a shot in the dark, requiring background checks and mapping to specific requirements, with a new one for every company need.

Matchmaking

Chandrashekharan, proprietor at Temp-o, a contract service agency, describes provider agencies like his as the brokers of the temporary staffing world. These agencies make sure there is a good fit between companies who seek services and the professionals that provide them.

``Consultants are generally good at what they do,'' says Shekharan, ``but they're rarely good at marketing themselves." He adds that larger companies are comfortable with the idea that, if they are dissatisfied with a service provider, they can always get the agency to source and supply a new one.

Avenash Datta, Prime Mover of IT for Tat Agency in New Delhi, provides IT and emergent speciality professionals to companies in the National Capital Region.

He has discovered that contract services score over consulting in a unique way.

In the field of emergent technology, the burnout rate is phenomenal. Individual consultants have only themselves to depend on and the pressure begins to get them sooner if not later. They are pressured by the need to find themselves a new position before they have finished with the one on hand which is a lose- lose situation for the hiring organisation and the consultant. The contract service provider can rest assured that the agency is already looking for another fitment for them. ``Creative whiz- kids and techies are people who are best at being themselves, and are pretty inept at selling themselves and their skills. They like to be hunted, they hate the hunting,'' he says.

Datta's agency gives his contract whiz-kids the compensations they demand and charges the facilitation costs on to his client companies, not to what he terms affectionately, his 'Geek Gang'. "They get what they asked for, on time and they trust me to sell their services to their best advantage.

S. RAMANUJACHARYA

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