I recently talked to a CFO who is on the verge of quitting.
She’s so overwhelmed as she’s dealing with investor meetings and long-term planning while also pulling data from the systems and running basic budgets.
She doesn’t even have time to think about a permanent hire.
She called and said, “I don’t know exactly what I need. I could interview candidates for a permanent director of finance or senior financial analyst. I don’t know if I need a junior-level professional willing to get in the weeds or a senior-level exec with experience.”
Instead, I recommend a consultant.
I told her, “Let’s get someone in there who is hands-on and can take some of the mundane work off your plate. You need space to get work done and time to think about the long-term hire.”
She hired an interim senior financial analyst. After a few months, she called and said, “This consultant has done a great job, but I realized through this process I need someone operating at a much higher level for the permanent position. Because I hired the consultant, I have perfect clarity now. We need a director of finance.”
She would have never come to such a clear conclusion by interviewing candidates at different levels for permanent hires. But after working with the consultant, she knew exactly what she needed — and she could fill the full-time hire.
But aren’t consultants expensive? Absolutely.
However, they’re not more expensive than hiring the wrong person. If the CFO had continued with a junior-level search, she would have wasted a significant amount of money in training, resources, and termination once she realized it was the wrong fit for her company.
And while consultants aren’t cheap, they actually save money, time, and culture long term. Here’s how:
Consultants Save Money
Yes, hiring a consultant can require greater short-term investment than making a long-term hire (or having your current full-time employees handle the workload). However, when you hire a consultant, you hire an expert who should not make mistakes. Their experience increases the likelihood that vital projects (like IPOs or system implementations) are completed well.
Plus, you save the investment of a full-time hire. Sure, the short-term rate of a consultant might be higher, but you avoid onboarding costs (and the costs of hiring the wrong person).
It also saves money because you don’t waste time training someone on your team for a special project outside of their expertise. Let’s say you need to do a Revenue Recognition Implementation. Instead of training your senior accountant (who doesn’t have any experience in this area) to implement ASC 606, you can bring in a short-term consultant who’s familiar with the process. The consultant can handle the implementation and your permanent employees can continue working in their areas of strength.
“When you hire a consultant, you hire an expert who should not make mistakes. Their experience increases the likelihood that vital projects are completed well.”
Consultants Save Time
Consultants are also a way to buy yourself (and your company) more time.
A CEO of a series-A startup recently called us and said, “We have to raise money… now. We are growing and great things are happening, but if we don’t get money immediately, we might not survive. So, I need to hire a CFO ASAP. I just need a warm body at this point. I can always replace them later as the company gets bigger if they’re not a good fit long term.”
There are a few flaws in that thinking. You never want to hire someone who won’t last longer than a year. Plus, it takes 4-6 months to hire a CFO in this market. Instead, we recommended an interim CFO who started three days after their interview.
Without any training, the interim CFO took on all the finance responsibilities so the CEO would have time to raise money to keep the company alive. At the same time, we’re still conducting a permanent CFO search for them. We’re looking for someone who’s the right fit now and who will continue to be a great fit when they grow to be $100 million in revenue.
Because he hired a consultant to ease his workload, the CEO now has time to raise money. Plus, he bought himself time to find the best long-term fit for a permanent hire.
Consultants Save Culture
The emotional health of your employees needs your attention — now more than ever. Mental health has received a lot of focus over the past year (as it should), but our current high hiring market makes employee emotional health even more vital to the well-being of your company. Employees can easily jump to join a company more focused on emotional health and wellness if they feel you’re not meeting their needs or you work employees too hard.
Overworking kills your culture. Burdening your team with special projects on top of their 50-hour+ workweek will lead to turnover. If your employees are constantly overworked, you’ll lose more people — which is even more costly — and you’ll create a culture of frustration, exhaustion, and negativity.
However, hiring consultants eases the burden for the team. When you bring in a consultant, you give your team adequate resources to do their jobs well, without requiring relentless work hours. What you DO for your team matters more than what you say. When you hire a consultant to meet the needs of your team, you show you care through your action. Consequently, you improve retention and reduce churn.
Consultants also give you the time you need to make a permanent hire who will positively impact the culture. Rather than make a wrong hire out of desperation, you can choose a person who will complement the needs and culture of the company.
“If your employees are constantly overworked, you’ll lose more people — which is even more costly — and you’ll create a culture of frustration, exhaustion, and negativity.”
Why Consultants are Worth the Cost
Hiring consultants is initially more expensive— and there’s a reason. You’re paying top dollar for an expert and for the flexibility of employing them short term.
However, you are not spending money and time managing, training, and developing them. You’re also not paying for the overhead costs of payroll expenses, healthcare, and insurance.
Yes, you’ll pay a higher short-term rate when you hire a consultant, but it’s not the financial burden of a full-time employee. And, with the positive impact a consultant can have on your company, they just might preserve your culture, increase your time, and save you money after all.
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