Sales and business development are often considered as the same function in today’s companies, but this is an over-simplification. Both have a common goal of increasing customer base, but they are separate but complementary elements that need to work together to get the best results. Business development generally refers to the sum of the actions a company takes to identify prospects whose business needs pair well with its offering’s benefits. This refers to the activities conducted to identify, connect with, and qualify leads which will have the most significant impact on the business.

Well-executed business development can set a course for existing full time sales staff to carry out. This can lead to an increase in warm prospects and a more effective and clear sales process. Determining whether it is right for a business to use consultants vs. employees in your company requires careful consideration of many factors. Consultants are usually engaged for a short, or limited period of time to satisfy a specific need or task, for example business strategy, analysis, completion of a one-time project.

Contracting a Consultant...

Consultants often offer a level of specialization and objectivity that a company may lack internally during its early, startup stage. It may not make sense for a startup company to use its internal employees for solving acute problems that the company is not in the best possible position to understand or address. Consultants are typically paid an hourly fee, a fixed fee, or a commission based on a percentage of sales. The fee may be contingent upon completion of certain services or meeting certain benchmarks. A consultant typically does not need to be reimbursed for overhead expenses, insurance, retirement, or other employee benefits. They are entrepreneurs and responsible for the entire operations of their business. Their compensation is not often included in a company’s direct payroll cost budgeting. In short, there is lots of flexibility around compensating consultants with the understanding that the engagement is meant to be short-term and limited in nature. The fact that a consultant does not have a vested interest in the long-term growth and success of a company, allows them to be subjective and realistic about the current state of a business. This also extends to identifying what changes need to be made. There is the potential to make significant savings annually by using a consultant to assess your existing customer base, sales process and new business. The consultant can then deliver advice, step changes and map out an approach which can be provided to existing sales team to implement. Additionally there is more flexibility with regards to terminating a consulting relationship since the engagement is not intended to be long-term.

Employees are generally hired to satisfy the long-term needs of a business in a defined role, with a wider definition of tasks.

Hiring an Employee…

Employees are long-term, integrated members of a team and perform duties that are dictated or controlled by senior management or shareholders. Employees are trained by their company for any specialized work beyond their general education and prior work history adding a lead time to business development function. Hiring employees requires an understanding of taxation (PAYE commitments), insurance, and employment laws, and comes with significant responsibilities and costs. Employees may also be entitled to join unions and take advantage of workplace safety and employment anti-discrimination laws, whereas consultants are not usually protected by these laws.

Consider the above factors when making your decision about whether to hire employees or engage the services of consultants in your company. Using a contractor agreement is a great way to ensure the rights and responsibilities of both parties so that there is no room for misinterpretation. Companies have drastically changed the way they work, but hybrid and remote work aren’t the end of the story. Business should consider the use of flexible contractors. This usually involves project-based or temporary work that is staffed with workers who are not permanently attached to a company. If done correctly, these ways of working can help businesses access skilled talent while providing the flexibility that many workers increasingly crave.

Advantages of using consultants?

Flexible models have traditionally served three purposes…

Flexibility allows organizations to scale staffing up and down, accommodating labour demand variability. Small tasks can be outsourced for situations where hiring a full-time equivalent would not be justified and where the overhead requirements of traditional temporary staffing solutions would slow the project or be cost-prohibitive. Flexible talent strategies provide access to innovative or diverse skillsets beyond traditional recruiting pipelines.

There have been barriers to organizations adopting this flexible model, discomfort with remote work was one of the most significant, as flexible talent is disproportionately remote. Resistance also comes from enterprise inertia or bureaucracy, concerns about IP or security risks, and a lack of familiarity with the tools and management practices that make open talent effective. As a result, companies sought talent primarily in their local markets or recruiting networks, and primarily for traditional hiring arrangements. There are a few important variables that companies should consider before deciding how to use flexible contractors. For one, the level of company-specific knowledge required for a project will typically tip the balance between employees and contractors. While freelancers can work independently and produce finished work on a shorter timeline than employees, a project that requires interfacing effectively with existing applications that require significant company-specific context will require collaborations.

This could be approached in the following ways…

• an internal employee is needed to form the bridge;
• the freelancer must learn the internal systems (potentially at higher cost than an internal employee); or
• an internal employee will serve an integration role that builds on the freelancer’s work.

Then there’s the question of whether a project or task is recurring. All hiring and onboarding has associated costs — whether sourcing a freelancer, or hiring a full-time role. If a project or task is going to be repeated over time, the scale tips toward making a more permanent hire to reduce costs, especially if this involve training a new hire on company-specific processes. On the other hand, a repeated task can be suitable for open talent if it involves common skills and requires little firm-specific context.

The increase in remote work is hastening a shift that reduces hiring, screening, and monitoring costs for managers and lessens burdens on workers to understand company-specific context.

A few important changes have caused this shift.

First, we’ve seen a mindset shift around remote work. Hiring managers for remote positions are now more comfortable interfacing with people they have not met personally, opening the door to work from anywhere, as well as open/flexible hiring. Second, companies have invested in virtual communications tools e.g. video calls and screen sharing, that make it easier to troubleshoot problems remotely and give outside workers a way to interface and give feedback. Third, remote work has forced companies to better define tasks, processes and specifications, which can enable opening up a company to contract work.

To conclude, experience companies have gained from remote work can open up possibilities for leveraging flexible work or contractors. When done well, these models can drive exceptional results, but they require purposeful management.

Excerpts from article:

Authors: Ozimek A. Stanton C. (2022) ‘Remote Work Has Opened the Door to a New Approach to Hiring’, March 11th. Available at: https://hbr.org/2022/03/remote-work-has-opened-the-door-to-anew-approach-to-hiring#:~:text=In%20surveys%20conducted%20by 20Ozimek,the%20pandemic%20 and%20going%20forward.