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Contractor or Consultant Differences_Contractor or Consultant- The Differences & Benefits Explained

Contractor or Consultant: The Differences & Benefits Explained

The terms contractor and consultant are often interchanged in the industry. But there is a difference, and it’s worth considering if it affects you and your capacity to earn more.

At Contracting Scout, we know just how important it is to choose the right option, so that you can maximise your skills and proposition. We have explained some of the differences and benefits below.


Understanding the difference

As a contractor or consultant, clients will come to you when they need help with a problem within your area of expertise. Essentially, both contractors and consultants are independent professionals working on a temporary contract basis, but there are a few subtle differences which are dependent upon experience and specialisms.

Consultants are often hired at a high level to evaluate their clients’ needs and to provide expert advice on the subject. They will recommend a course of action to remedy the problem, be it financial, logistical or an issue they cannot resolve by themselves.

On the other hand, a contractor will actually perform the work that needs doing, whether instructed by a consultant or someone within the organisation. The contractor will still evaluate the job at hand and, in some cases, provide specialist input before beginning the work. However, their main purpose – what they’re paid for – is to carry out the work.


Selling points: experience vs advice

One key factor that separates contractors from consultants is experience. Contractors often use their experience to sell their services.

Experience can be used as a mark of trust, and will represent how well a contractor can carry out the role. For example, if you’ve been working in IT services for 10 years (a growing sector for contractors) you’re typically more likely to be awarded a contract than someone who is new to the industry.

For consultants however, experience is less about the trust of seeing a job through to the end, and more about having the ability to solve the problem at hand. Businesses go to consultants for expert advice with problems that they can’t solve, so it’s essential that they have the knowledge and experience required.

Although a consultant is not usually responsible for the outcome of the project as a whole, they can have a profound effect by delegating and assigning tasks, changing the approach and providing key information where required.

This is partly why it’s so crucial to define your services properly. With so much experience and expertise, consultants are able to charge a premium for their services. And for this premium, businesses expect the best knowledge, vision and advice. If you can’t provide that, you’re unlikely to succeed as a consultant.


Different sectors, different needs 

It’s worth considering the nature of your industry when pitching yourself as a contractor or consultant. Some sectors such as hospitality and construction lend themselves naturally to contracting. Such businesses often require workers to do the job for them on a repeat or ongoing basis, and often at short notice.

However, with areas like finance, accounting or IT, there is often a critical role for consultants to play. They can provide invaluable information on legislation, structure, best practices and even useful software packages. As such, it may be in a company’s interest to pay a premium for one-off advice rather than fork out for a long-term contract role with less direction.

If you are a contractor who has provided guidance and advice to clients before starting projects, this experience will stand you in great stead to take on consulting roles in the future.


Benefits of contractors and consultants 

Both contractors and consultants benefit from independence, flexibility and typically a higher income than they would receive from permanent employment. However, working as a consultant can bring even more advantages.

Rather than charging purely for the time it takes to deliver a project, consultants charge for their expertise, such as finding the solutions that need to be delivered.

The art of providing a solution adds immeasurable value to projects across the spectrum, but it doesn’t necessarily take weeks and months to provide. Consultants are therefore in a unique position where they can charge a fee that’s not necessarily linked to their time spent on the project.


The crossover between contractors and consultants 

With all that said, consultancy and contracting can often come hand in hand. As mentioned, consultants often provide expert input before even starting the job. This could be a quantity surveyor advising on materials, or an accountant recommending ways of cutting expenditure.

If you’re contracting and find yourself consulting on projects more often than not, it may be worth adding consultancy to the services that you provide. By offering two separate services and prices for consultancy and contracting, clients will know exactly what they’re getting, and you won’t lose out by providing higher value services for a lower fee.

Consultants are also often hired on a fixed-term basis like contractors, to supply ongoing advice and direction. In this instance, it’s important to define clear payment terms, so you’re not providing more than you have been paid for.


Expect the best from contract work

Whether you’re a contractor or consultant, or a combination of the two, Contracting Scout is here to help. We provide a range of essential services to help inform, assist and guide you in the right direction. From mortgage and insurance assistance to payment and accountancy support, our specialists are here for you.

Get in touch today for more information on any of our services. To speak to a member of our team call: 0203 603 1878.

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