What’s the Difference Between a Consultant and a Contractor?

I was having lunch with friends at the weekend – as it was a sunny Sunday afternoon, we were dining al fresco! – and invariably the conversation turned to our businesses and careers.

As I talked about what I’ve done this year and what’s still on the horizon, a question came up which gave me the idea for this post.

“What’s the difference between a Consultant and a Contractor?” my friend asked. “Aren’t they one and the same?”

And that got me wondering how many people out there in the marketplace share that opinion.

Having worked in both capacities, I can confirm that there are differences in expectations once in a business

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On the surface, the terms and roles may appear interchangeable. But having worked in both capacities, I can confirm that there are differences not just in the roles, but in terms of expectations once engaged in a business.

I’ve listed four of those differences below:

Influence

A consultant is expected to routinely engage with, influence and provide a steer to senior management regarding their project, and the business as a whole. While a contractor may also wield some influence, strategic decisions tend to be are made without their involvement. Decisions are cascaded for information and implementation (whereas the consultant plays a key role in shaping those decisions). There is less flexibility for the contractor, as the client pre-determines the scope of the project and the boundaries of their role, which limits the ability to influence the project or decisions taken.

Expertise

Consultants tend to possess a level of skill, expertise and experience that does not exist in the client’s business, from which the client benefits for the duration of the engagement. In general, those specialist skills, experience and intellectual property come at a premium, when compared to the investment required to engage a contractor.

Resource Backfill

Contractors are typically brought in to perform a very specific role on a project or programme, for a set period of time. Contracts usually run for a minimum of three or six months with the possibility of extension afterwards, depending on what remains to be done on the project. Contractors serve as a backfill for permanent resources, and are based at the client’s location. Consultancy engagements tend to be shorter. It is not uncommon to have a consultant on-site to perform specific tasks – such as a review, workshop or an implementation – for a set number of days in the week or month. With office and desk space being in high demand, it has become more common for consultants to work remotely, and just go on-site when face-to-face meetings are needed.

Independence and Objectivity

In a previous post, I highlighted this as a key asset of a consultant, and it's worth doing so again. Particularly in scenarios where it is crucial to the success of the client’s business, consultants are better equipped to go into a business, and give objective recommendations on how to improve. While such reviews and recommendations can form part of a contractor’s role, it is more challenging to do this effectively if they do align with the interests of their department or boss.

As always, there can be exceptions to these “rules”, and it’s not to say that consultants cannot work as contractors when the occasion presents itself. Hopefully this helps clarify the nuances between these two roles. It could make a difference the next time you decide to recruit resources to support your business goals.