I’ve been in the field of programming professionally since 1990. I started out as a corporate employee for 14 years, then as a consultant, back to an employee, and finally settled with consulting. In both positions, I’ve worked with small, medium, large, and huge Fortune 50 corporations. There are many similarities between being an employee and a consultant, but there are also some significant differences. 

In this blog, I’ll explore what life has been like in each role and hopefully give some perspective to others who might just be starting out. Keep in mind when I write “employee,” I am specifically targeting programmers.

Employee vs. Consultant

I work with corporate employees every day and their experiences typically line up pretty well with what I remember. The pressure for employees usually stems from meeting goals, doing reviews, dealing with corporate politics, and concerns about staffing, along with the longevity of projects.

Employees as a whole spend long periods of time on each project they are assigned. The employee mindset usually revolves around moving up the corporate ladder to advance their career. Many people find this motivating, rewarding, and fulfilling, which it certainly can be. These are just some of the differences between employees versus consultants.

Similarities & Differences

Passion

The first similarity is passion. Employees and consultants are generally very passionate about their work. Most have an intense desire to see projects succeed, expand, and contribute to the corporation. Both are creative and have a voice in providing ideas.

Depending on the project, they can also be in lead roles coordinating the efforts of teams. These are all very positive aspects of being either an employee or a consultant. So, what is it that makes being a consultant unique?

Flexibility

Consultants generally have a great deal of flexibility in regards to what projects they work on and how long they stay on projects. Since there is a little guarantee from the client on how long they will have the consultant, generally in 3-month increments, switching projects can be a regular occurrence.

However, if the corporation likes what the consultant is doing and both sides want to continue the contract, long-term multi-year engagements can and certainly do happen, I am on two right now.

Working with multiple clients simultaneously is another possibility. If the consultant has the time and desire, there are clients and projects out there that can be added on a part-time, as needed basis.

Since most consultants are paid on an hourly basis, this can be a great benefit both for the client, who gets an experienced consultant when they need one and for the consultant, who gets to experience multiple challenges and add some extra income. Speaking of income, what is different between employees and consultants?

Compensation

Income from consulting can come in different forms. A 1099 consultant is paid as an independent entity. The consultant is responsible for making quarterly tax payments, having their business registered, employment liability insurance policy, as well as taking care of their benefits.

As a 1099 employee, it is crucial to carefully budget and work with a tax advisor to stay on top of running a business. However, being a 1099 employee does not always mean you have to find your own clients. Some consulting firms prefer placing 1099 employees as it lessens their burden of keeping track of taxes, insurance, and HR. I worked as a 1099 consultant for several years prior to coming to Keyhole and found it to be rewarding, but challenging.

Location

The location where consultants work is dependent upon the client. Some clients prefer the consultant to be on-site every day while completing all of their work in their office. Others are remote and, often times, don’t have a space for the consultant even if they were able to show up to their business every day.

For example, I have never met one of my clients, a multi-year part-time engagement, in person – but we have a great working relationship. Keyhole does have office space for consultants that work remotely but do not or cannot work from home. It makes for a great environment to collaborate since there are many different skill-sets represented.

Working with one Keyhole employee is like hiring all of us. We will all help each other through tough situations and complex problems. I have always thought of this as a real benefit for clients.

As my health has changed over the years, I have gone from on-site daily to working from home nearly every day. This type of flexibility can occur in the corporate employee world but is still rare. In many cases, consultants have more flexibility with the location of where they can work.

Benefits

Currently, I am an employee of a consulting firm. Now, that may sound strange since this whole time I’ve talked about being an employee versus a consultant.

An employee of a consulting firm is not the same as an employee of a corporation, at least not in my experience. We are a “work an hour, get paid an hour” type of company which means there is no paid vacation, holidays, sick time, or other paid time off.

Initially, that may sound challenging, but it has its benefits. We get paid more per hour so we can budget for the time we want or need to take off. It’s self-managed. Taking actual time off involves asking the client, they are almost always supportive, then letting Keyhole know when and how long you will be gone.

Working on an hourly basis means it is essential to keep an emergency fund and buffer since pay fluctuates based on how many days are in the month and how many hours are worked. This can be a good thing when there is heavy overtime, or a not-so-great thing when several holidays, sick days, or vacations come up. Having a buffer built up relieves the stress that might otherwise be felt by having such a setup.

Other benefits from being an employee of a consulting firm include having access to great insurance, 401k (including matching contributions), possibilities of bonuses, a culture where everyone helps out, and activities to keep learning while sharing common values.

Finally, Keyhole also likes to plan fun activities to get to know each other better like picnics, happy hours, parties, etc. Having these events only makes our company stronger as we can easily collaborate to solve complex problems.

Final Thoughts

So what is missing between a typical “corporate” employee and a consulting firm employee? Mainly, the differences I listed near the beginning of the blog like pressure, reviews, politics and finding the next project. 

At Keyhole, employees aren’t concerned with moving up the corporate ladder. We have meetings at times to see how we are doing, but they are far from the typical stress-filled HR review. There are zero politics even though it would be interesting since we all work with so many different clients.

A big stress relief is having our HR team help with insurance, time tracking, and activities instead of having to spend resources on tracking reviews, goals, and seating charts.

When I am contacted by recruiters, it gives me great satisfaction to let them know how happy I am with my company, my work, and my clients. I am planning to work for Keyhole until I retire, which is something I haven’t been able to confidently say in any of my previous positions. No place is perfect, but Keyhole is certainly close enough for me.