Human Resource professionals, executives, and other important decision-makers within companies are often tasked with choosing a consulting firm to help them with pressing Human Capital needs (e.g., recruiting, selecting, and developing people, etc.). Too often, I see these busy professionals using the “bigger is better” rule-of-thumb, signing expensive contracts with large consulting firms and ending-up very disappointed with the results.
With about fifteen years of Human Capital consulting experience, I have worked for small consulting firms, large consulting firms, and completely on my own. I’ve also been a Human Resource Manager responsible for choosing consulting service providers. Here’s a few lessons I’ve learned:
- Smaller consulting firms cost less. Those multiple offices around the world that big firms boast are very expensive to keep open, not to mention the huge amounts of staff, advertising, legal expenses, etc. required. And those hefty expenses get passed down to you as a consumer. Your company’s money can go farther when it’s paying for service rather than keeping an office’s lights on. Also, like many large companies, big firms have to consistently show profit increases to keep investors and other stakeholders interested. However, many smaller firms are content with making enough profit to pay their consultants fairly.
- “Boutique” consulting firms care more about you as a client. Consultants at smaller firms are more likely to feel the impact of their success and failures. -Losing a client can seriously impact their bottom line. Moreover, much of their new business comes from current customer referrals (e.g., being recommended for doing great work). With all that in mind, consultants at smaller firms are usually much more customer service oriented and willing to go the extra mile (e.g., complete urgent projects over the weekend and holidays) and ensure you’re satisfied as a client (e.g., customizing processes, giving discounts, etc.).
- You’re not getting better consultants (or better results) by “going big” and paying more. Big consulting firms subcontract work to smaller firms. That’s right, when those big firms get big contracts, they often reach out to independent consultants to help deliver the goods while saving money. So, that big firm consultant you’re paying top-dollar for may be a small firm consultant anyway. Moreover, many of the best consultants nowadays start out at large firms, learn they are effective and can do consulting work on their own, and then go off to work independently or start their own small firms.
In sum, choosing a smaller consulting firm can save your company money while getting better results.