Consulting Fees

[Bob George]

"Derek Neighbors" <derek@gnue.org> wrote:

> Again we can agree to disagree.  I dont think a client should pay for ones
> inability to find work (downtime) or training (after all if they need to
> pay you to learn, why not pay one a staffer)

Nor do I. The point I was making is that a FULL TIME EMPLOYEE is paid for
downtime and in periods of no work. Consultants are NOT. I'd like to turn
the tables, and rather than ask how much a consultant "should" make, let's
determine the true cost of headcount for FTEs. You calculation of base
salary plus $10K plus 10% doesn't cover it. If we're looking at how much
people are worth, let's compare based on the ACTUAL COSTS, and not just base
salary.

> Yeah that outfit need to make a profit off you as well as pay you etc
> etc.. We call that gouging.

Doen't most for-profit organizations charge for goods and services? Isn't
that amount above what operating costs are? How is that any different? Why
isn't it gouging when you charge more for goods or services? You're just as
much of a parasite, no?

> [...]
> I think employees that dont perform should be cut.  But justifying cost
> based on lazy employees is silly.

Screw just the lazy ones, most companies can realize savings by outsourcing
quite a bit of their operations (or so the guys that push it say). Fire 'em
all! (OK, that's not me but I know many with that attitude.)

> [...]
> Sure.  Generally, I dont take discussions personally you seem to.  I have
> worked as an independent consultant as we well as a consultant for larger
> consulting firms as well as a normal employee for both large and small
> companies.

And they were profit oriented, no? Income exceeded expenditures? How was
that done without "gouging"? Why should customers pay for rent? Phones?

I'm not taking this personally, I'm just flabbergasted that anyone uses
these arguments seriously. You put some heat on your toss, I'll put some on
mine.

> [...]
> As they get educated and are able to hire currently starving programmers
> (according to this list) they will.  Just as people are leaving
> proprietary software as they get educated.

Yes, but what if the actual work involved in getting a new system started
taper off after implementation? Why pay yet another FTE when you really only
need them for a limited engagement? An employee is a recurring cost, an
engagement with a consultant isn't (although we do hope for follow-on work).
I suppose a lot of companies would hire an FTE, then dump them when not
needed anymore. Who's unethical then?

> [...]
> Ok so which is it?  Should the companies factor in your cost your
> 'training'?  or are you saving them money because they dont have to keep
> your skills at a high leve?  Im just curious?

We provide them value that exceeds their costs for engaging us. It's not
about 'saving' or 'training' at all. They need something done that can save
them $X yearly. If we can help them get it going for a fraction of $X on a
one-time basis, and their recurring costs are a fraction of $X, they've
realized significant value for whatever they charged. Obviously, some will
have the means to do this internally, and more power to them. Many will not,
and can't afford to pay for the talent required to do so.

> [...]
> I do apologize if I insulted, soap box sure, but it wasnt meant as a
> direct slam on anyone.

Derek, when you say that anyone who charges over the amount required to
equate to a full time employee's salary is "gouging", I don't know how NOT
to take it as an insult! If the rewards didn't outweigh the risks, I
wouldn't do this line of work.

> [...]
> Well I was a 'high paid' consultant at one time and stopped because I felt
> it unethical.  I developed proprietary software at one time and stopped
> because I felt unethical.  Now I consultant often for free to non-profits,
> schools and small business and work as a salaried employee for which I
> used to consult.

That's great! I too feel very good about the work I do. In the past, I've
done a lot of work for public entities, the results of which have led to
considerable saving to taxpayers, and real benefit to those organizations.
I've also worked in the educational market, helping SEs keep school systems
running often on my own time. Although I too help others out where I can (my
free Cisco lab is an example) I do NOT feel guilty about being compensated
by those with the means to do so.

When you refer to those that you previously consulted for, do you mean
schools? You realize the privatizers use many of your same tactics to
justify eliminating public schools and running them as for-profit entities
(performance based pay, measurable results, etc.), at "considerable savings"
to the taxpayer, right? I've worked with some hard-core privatizers and
outsourcers, and they're all to happy to get into the FTE versus
outsourced/consultant discussion. You sure don't need a computer wonk at a
school when it's all been centralized under an outsourcer. Just have the
help desk schedule a visit with dispatch. The techs will fit it in with all
the other service calls they do. Privatizing also eliminates the need to
deal with all those nasty unions and HR issues.

It's an ugly business when we reduce each other to dollars and cent
comparisons, regardless of which side of the fence you sit on.

- Bob