10 reasons why companies hire external consultants

From an outside perspective, it can sometimes be hard to gauge why companies would need external consultants to identify the problems with their organisation, and to fix them. The old joke about consultants is that they borrow your watch to tell you the time, but in actual fact, there are many reasons companies really need consultants to help address some of the most complex changes facing the business world.

Here are 10 factors which often play into clients hiring consultants from consulting firms or independents:

Independence 

Unlike a permanent employee, who may be subject to the internal ‘politics’ of an organisation, consultants bring an independent perspective to their work. A good consultant will always be unbiased and objective, and as they have no personal connection to the organisation. Their ‘out-of-box’ thinking means they can focus only on the goal/plan agreed with their client, without being caught up in internal distractions.

Creative thinking 

Without being tied to certain ways of doing things, or a company’s historic culture and methods, consultants can also deploy their objectivity toward important creative solutions. Without having to consider whether or not their future work might depend on currying favour with a business’ executives, they are able to deliver breakthrough insights and strategic thinking at odds with what a client might typically have thought of.

Expertise

A business consultant will usually operate in narrow areas, meaning they can bring detailed and in-depth expertise required for any given sector or organisation. On top of the in-depth training many firms will furnish a consultant with, advisors will work with multiple clients in their specialist area, making them aware of the latest trends and developments in the field – enabling organisations to stay ahead of the curve and get the maximum potential out of new methods and models.

Industry best practices

Leading on from that, the diversity in a consultant’s experience will put them in a good position to provide insight in best practices. By learning from the best performers in industry, organisations can find ways of improving their own operations, while holistic bigger-picture thinking of strategic consultants can put this toward enlarging an organisation’s market footprint, expanding its product offerings, helping reorganise for efficiency and cost savings, increase capabilities, or even acquire another company.

Credibility

Sometimes organisations just need a trusted pair of hands to oversee an important change project. In an industry which does not require chartered status, reputation often serves as quality assurance, as consultancies with well-known track-records have demonstrated expertise in a wide variety of fields, and work with thousands of clients across the globe every year to solve various business problems and drive growth.

Capacity

There will be times when any firm will eye a move for which it simply does not have the relevant talent pool or expertise – but that only necessitates a short-term contracting of the required skill-set. Digitalisation is a strong example of this. Given the speed of digitalisation and state of competitiveness across all sectors, a company might not have the time to implement new digital infrastructure by itself in time. In this case, hiring a digital or technology consultant to help meet the urgent need to build capacity with speed and scale is necessary.

Keeps standing business running

Executing a transformation project using existing staff could leave the daily operations of an organisation neglected or understaffed. By sourcing external consultants to help lead transformation projects, companies ensure that their day-to-day functions are well supported by their staff, while a team helmed by contractors and supported by a feasible team of internal employees can pursue project-driven change.

Difficult decisions

By virtue of being objective, consultants can also be tasked with making difficult decisions. The process of identifying redundancies and implementing staff cuts, for instance, can be influenced by and damaging for team dynamics if administered internally. Consultants, meanwhile, have an objective lens through which they can identify where to make cuts and make them with a sufficient amount of emotional distance.

Global scale

Some of the largest consulting firms in the world have operations in more than 100 countries. Consultants from these firms have reach in the global market, and have the capacity to help a business scale up at a local, regional or global level, while most large consulting firms have vast client networks in a variety of geographies and business domains, all of whom can potentially offer support. This can be a major boost to businesses scaling up across industries, borders or markets.

Cost effective

Beyond the immediate fees paid to the consultant, organisations deploying external expertise for individual projects do not incur overhead costs, such as providing benefits, or even having to supply a computer and a workspace. In addition, once a project is completed, consultants can be retired, meaning that an organisation no longer incurs costs.

In comparison, when hiring a permanent member of staff, companies will need to pay their salary all year long, while if an organisation hands a permanent contract to someone who turns out not to be a good fit, it can be an expensive and exhausting process to have to remove them, and start again.