By Sharon Paul, VP, Strategic Staffing, Devon Consulting

Even as the nation's economy moves into its post-boom self-adjustment, it is still very much an Information Technology (IT) consultant's market. The increasing rates of mergers and acquisitions, employee turnover and global recruitment, as well as the continuous onslaught of new technologies, all play a factor in the increased demand for IT talent. This need is putting you and your IT consulting skills in the driver's seat. You have your choice of industries, companies, projects and work arrangements. But more importantly, you have your choice of how you are compensated. To help you decide which is best for you, here are some guidelines.

Of all the factors listed, how you expect to be compensated is an important indicator of what you consider your highest career priority to be. For example, if economic stability is important to you, then a salaried contract may be your best bet. For those who have the hottest skills in demand and desire a six-figure income out of the gate, then an hourly contract is a better fit. The three main forms are salaried, hourly and independent sub-contracting.

Salaried and Stable

The primary benefit of working as a salaried consultant is its sense of stability. Salaried status basically affords all the elements of traditional, full-time employment—being a team player, having entry-level access, on-the-job training, advancement opportunities, pre-paid benefits provided by your placement agency or hiring employer, and more significantly—a regular pay check. 

The difference between a salaried consulting versus a traditional full-time position is that consulting offers the added benefit of flexibility.  There is an exposure to a diversity of experience and clients and projects you don't get with traditional employment.

All the attributes of being a salaried consultant are particularly attractive to international candidates, who need the security of constant employment for their sponsorship. Sponsoring agencies or companies for international clients are obligated to provide continuous, full-time employment for the duration of their visa or until they receive a green card. So, it's a far less risky proposition for the candidate, as well as the company considering extending an offer, if both commit to a salaried assignment.

Conversely, the potential drawbacks of salaried consulting include:

• Your contract agency selects your next available opportunity for you versus you selecting your own opportunity
• Constant pressure to keep your skills updated and marketable, so that your agency can continue to find opportunities for you. Allowing your skills to become outdated makes you an expensive burden on "the bench".

If you do possess the skills most in demand, and your priority is building your bank account, then consider choosing an hourly-consulting contract. 

As an hourly consultant, you can command—and get—an average of 30% to 40% higher wages than you would in a comparable full-time position. And since these assignments tend to be shorter-term contracts (approximately 6 to 12 months), an hourly arrangement gives you the option to increase your pay rate with each assignment, thus eliminating the restrictions of annual reviews and raises. 

However, money is not the only benefit. As an hourly consultant, particularly for those with Java, Oracle, SAS and other high-end developer skills, you can earn management-level pay and still pursue a technical path. Employers tend to have a number of openings requiring knowledge of these technologies, but very few full-time employees who posses the skills. So being a contractor with expert development skills, you prove you have the capacity to learn cutting-edge technology, which perpetuates an employer's need for youkeeping you in demand and making top dollar.

By design, hourly positions are short-term contracts, which offer greater flexibility and control over your career and the quality of life outside work. Not only do you have more choice in career-related matters, i.e. experience, assignments and contract length, but you gain increased control over your lifestyle, i.e. commuting time, work location and living accommodations.

All this opportunity and control is great—if you are a risk-taker. As there is with a salaried arrangement, there is a downside to working as an hourly consultant:

• Run the risk of being out of work and paychecks are not guaranteed
• Responsible for setting up and paying into your own benefits and retirement plan
• Responsible for keeping trained and informed of the latest technologies and advances
• Potential to feel insecure in your work organization or its culture

In a similar vein, you can opt to take your independence one step further and work as a sub-contracting consultant.

For the most part, the advantages and disadvantages parallel those of an hourly consultant: An accelerated career path, more choice, increased responsibilities, pay commensurate to true market worth, higher personal risk, increased attention to administrative tasks.

As a sub-contractor, you are essentially your own company, thus magnifying these pros and cons, while adding a few others. 

The stringent laws that govern independent contractors scare many employers. Individual companies, as well as consulting agencies, prefer to hire sub-contractors who have set themselves up as wholly-owned companies that can be paid without the agency having to track tax deductions or file 1099s.

Therefore, as an independent sub-contractor, not only are you responsible for setting up your own benefits and retirement plans, you must adhere to the strict legal and tax rules that accompany establishing yourself as your own federally taxed entity. To help you walk the fine IRS guidelines and ensure all the regulations in place, such as worker's compensation insurance, most sub-contractors will need to go to the added expense of hiring an accountant and lawyer. However, the benefit of setting up your own company is that many of the expenses can be considered tax write-offs, thus allowing you the benefit of the many tax and other fiscal advantages available.

My Kingdom for a Broker

If after reviewing your priorities, you're still not certain which way to turn, consider choosing an agency or broker to help you select a suitable assignment. When choosing an agency, keep these three elements in mind:

Industry reputation

The National Association of Consulting Computer Businesses or NACCB was specifically created to set a code of ethics and standards for the industry. Consultants looking to work for a reputable broker should contact the NACCB to see if the agency of interest is listed as a member. By being a member, these agencies, of which there are only 500 nationwide, afford inquiring consultants of the following assurances:

• Accurate and diligent representation of a consultant's skills and experience
• Fair, reasonable and equitable contracts for clients and consultants

For inquiring clients:

• Accurate and proper representation of candidate pay rates
• Non-solicitation of employees from active clients

Client relationships

When represented by a broker with excellent relationships in the technical and geographical areas of interest, you are proactively and continually marketing yourself to clients. This naturally will result in a greater choice of assignments than if you worked on your own or with a lesser agency.

Financial stability

When looking at a broker, it is a good idea to investigate where they spend their money. If they are reinvesting a good portion of their revenue back into their organization and talent pool via their training programs, marketing efforts and new business, you as a consultant are assured that you will be afforded the best opportunities at the most desired companies in the area.

Of course no job—whether they are contracted or full-time—is ever guaranteed. As with any position, you are as vulnerable to the economic and industry ups and downs as anyone. Still as a consultant, regardless of the type of assignment you accept, you have the choice to make it as financially and individually rewarding as you dare. As long as you are creative and possess a good attitude, you'll literally have the pick of the litter. And, with a little added planning and the foresight to partner with forward-thinking placement agencies, you're assured a long and fruitful career in consulting.

About the Author

Sharon Paul is Vice President of Strategic Staffing at Devon Consulting, a contract agent for Computer Professionals.  Devon has a variety of contracts available in Pennsylvania, New Jersey, and Delaware, including short and long term contracts and "contract-to-permanent" positions.  Devon Consulting is also a member of the NACCB (National Association of Computer Consultant Businesses).  Sharon Paul can be reached via email at spaul@devonconsulting.com.