CWS 3.0: November 30, 2011 - Vol. 3.34


Peek under the Hood: From Consultant to Employee

Headlines and news reports these days about the economy and who’s hiring are pretty consistent. Hiring is projected to be flat or slow and organizations are focusing more on using contingent workers instead.

In uncertain times like these, it’s a pretty good strategy. I can’t think of a manager who wants to re-live 2008 and 2009 when they cut their teams by 10, 20, 30 percent as the economy cratered. Hiring a consultant or an outsourced team for a project brings in specialization when it’s needed. And when the project is done, the consultants transition knowledge back to your company and go home. No fuss. No muss. No layoffs required.

And in the process, managers at your company have developed relationships with a number of prospective employees. Even though they may not be looking for a new job — at least not right now — and you’re not ready to hire.

The new, new normal. In the managed services world, delivering talent has traditionally been defined as picking a contingent worker from a supply chain of staffing firms. But with the scope of managed services programs quickly transforming and with supply chains expanding beyond staffing and including more and more project, outsourcing and solutions firms, that definition of talent delivery has expanded to solutions design and delivery. Converting a contractor from a supplier to badged employee is now much more than an administrative act.

Sure, the primary goal is still that the work is done according to agreed-upon terms. And that everyone involved is satisfied with the outcome — whether it’s long-term or at key checkpoints. Beyond that, however, there’s the potential that employees of your outsourced partners will eventually be joining your company.

It’s certainly not unheard of. Associates at law firms or traditional management consulting firms come over to the client side all of the time. In fact, it’s often a core marketing strategy those firms use to increase their books of business. But in the outsourced project world, it’s not as common. At times, it’s because of “do not hire” or penalty clauses in a contract. Or even that the employee of the outsourced company doesn’t want to appear disloyal.

But whether it’s six days after a project is completed or six months later, one-time consultants may start knocking on your managers’ doors. And that’s why you need to be prepared.

How to prepare. There are several steps you and your managed services provider can take to prepare for the potential of supplier employees joining your organization:

  • Review standard contracts to ensure that you understand all of the clauses related to hiring employees of third-party solutions or outsourced project firms.
  • Meet with your managed services provider to understand the processes involved with hiring a worker from a third-party company and ensure that all sides of the equation understand the potential issues that may arise.
  • Have frank conversations with all outsourced project firms to discuss issue so there are no unpleasant surprises when one of their people want to become an employee of your organization.

Jim Lanzalotto, a member of Staffing Industry Review’s “Staffing 100”,  runs Scanlon.Louis, a strategy and marketing outsourcing firm that helps companies grow. He can be reached at or 610.212.5411.You can also follow him at


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Outsourcing12/02/2011 03:26 am

Good article. It was inevitable that the consultant made the transition to an in-house consultant-employee. A consultant dispenses their information to several others (including the competition) but once they become in-house employees, that expertise is solely for the benefit of your company.

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