Is consulting for you? It’s a strange business. When times are hard, consultants are generally the first people to be shown the door. When times are good? Consultants ordinarily make more money than regular employees, and they often have the most glamorous jobs. But it really can be hair-raising. In 2009, consulting in general shrank by 9.1%.
And about that pay … consultants who work for consulting companies only get a portion of what the client pays for their services, with the consulting company retaining the rest. Consultants who work completely independently generally command higher salaries, but they have much higher expenses. There’s health insurance, and there’s the expense of downtime looking for a new contract.
If you’re working as a consultant flying solo you also pay lots of other expenses. Self-employment tax. Office supplies. Advertising. There’s all that time you’d be paid for if you were an employee, but that you probably won’t get paid for if you’re working for yourself: travel time, conferences and classes, vacations and sick time. Then there’s the time spent keeping track of billable hours, and actually billing them. It may all be worth it, though. Freelancers ordinarily report high degrees of job satisfaction.
But for anyone deciding on a career, there’s also the sticky question of job security. How long will consulting as we know it today remain a viable career? Consulting, like most jobs, is morphing into entirely novel and previously unseen kinds of employment. The Deloitte CIO column in the Wall Street Journal identifies a whole new consulting subculture, what it calls “open source talent,” or online communities open to anyone who wants to join.
Included in this new category are groups like Kaggle, an online group of data experts, and Topcoder, a similar group of software developers. These aren’t just obscure eccentrics. Both these groups are used by big-name companies like GE and Facebook. They represent an entirely new direction: consultants who address bits and pieces of a company’s software needs.
Judith Pennington of Deloitte says the time is ripe for developments like this. Certifications and widely accepted processes make it easier for employees to evaluate the credentials of individuals halfway around the world.
This type of group is especially useful for a company that wants to try out new cutting-edge technologies without committing full-time staff, so a group like this also provides an interesting employment possibility for the kind of IT aficionado who loves mastering the latest skills.
Does this kind of development have any implications for the future of consulting in general? In the short run, some consulting niches are still hale and hearty. David Hoff of Cloud Sherpas says his company is growing 40% annually.
But his fellow cloud consultant, Jeffrey Kaplan of THINKstrategies, sees traditional consulting under threat. “Just as you’ve seen in the past decade software and systems disrupted and decimated by the advent of SaaS and cloud, the same forces are at work undercutting the perceived value and, therefore, the demand for traditional consulting,” he says. He predicts that companies will be looking for projects of shorter duration and lower cost. Hmm, sounds a bit like the open source talent model. But maybe that’s good for consultants—they’re used to ups and downs.

Lani Carroll lives in Colorado Springs with her bees, chickens, and horses. She can be found at her Google+ Profile.