There is a difference between how you handle contractors and how you handle consultants. Here are tips for working with both.
In my last article, "Get the Most of Your Contractor Relationships," I talked about using outside help to add more hands or more heads to your organization, drawing a distinction between contractors (hands) and consultants (heads), and offering tips for selecting both. In this article, I'll focus on best practices for the actual engagement.
As I said before, the most important part of this process is getting extremely clear for yourself what kind of outside help you need. Engaging contractors is very different than engaging consultants, and this is where I see confluence where it shouldn't exist.
If it's a pair of hands you need, engaging contractors is quite simple. You can bring them on board and manage them much like you would manage your own employees, as long as you follow the golden rule of contracting — you cannot keep them around for too long. Plan on engaging contractors for a maximum of one year; anything longer than that will start raising eyebrows with government officials who would love to reclassify your contractors as employees. Keep this time frame in mind when you plan your engagement.
Your contractor probably has very good technical skills but knows nothing about your company, and both are required to get any real value from the contractor. Focus the first four to six weeks on bridging these gaps. Most managers are so eager to have their experts on board, they immediately throw them on a task that requires little business knowledge, focusing primarily on the technical skill that they were hired for. It seems logical, but it's actually a bad practice. Due to the limited time you have with your contractor, it's better to focus the early stages of the engagement on teaching them your business. That way, they can add maximum value for the remainder of their stay with your company.
You should get a good nine to ten months of high value work from your contractors. Anticipate putting them on your highest profile efforts to reduce your risk. The advantage with contractors over employees is that contractors are usually more technically adept and focused, and they won't get caught up in office politics. Allow a "cooling down" period of about four to six weeks. Ramp them down with less and less responsibility and respect the fact that their focus will switch to finding their next engagement. It's all in the planning. You must anticipate, execute, and communicate with clear expectations throughout the entire engagement.
Consultants should be handled in a completely different fashion. You hire consultants for their brains, not their bandwidth. Consultants will typically have other clients, so don't expect them to sit next to you 40 hours a week. They also have their own methods for solving problems, so don't interfere with their process. If you knew all the answers, you wouldn't be hiring them.
I strongly recommend that you engage a consultant with a fixed price. This will limit your risk and focus the consultant on fixing your problem, instead of extending their stay. With this in mind, it's only fair to the consultant that you're very clear on your intended outcome. It's tempting to have your consultant solve everything under the sun, because there's no extra cost to you. Even if the consultant is not savvy enough to pick up on this scope creep, it's just not ethical.
There are multiple ways to engage a consultant, but the two fundamental ways are by project and by retainer. Projects are what we just described above; you pay a fixed fee for a desired outcome. A retainer is a periodic amount (i.e., monthly) for access to the consultant's advice, by phone, e-mail, or sometimes in person. It's like your own personal help desk. A retainer is a good option to help you flush out your outcome if it's not immediately clear or to act as a temporary security blanket for a few months after a project is over. Consultants can also be used for coaching, speaking, and workshops.
Engaging outside help is a prudent strategy for accomplishing your goals, but don't confuse consultants with contractors, and make sure you engage each properly. If you treat a contractor like a consultant, they will not be effective and will largely be confused on what to expect from you. If you treat a consultant like a contractor, you will compromise their ability to solve your problem, and your relationship will be strained when your expectations don't line up with their business practices. Keeping things clear will make a better engagement for all parties involved.