If you’re looking to augment your IT talent by hiring outside consultants and at the same time ensure you get the best possible return on their investment, Frank McCrea has a few guidelines for you.
McCrea is president of Procom Services, the largest IT contract placement and professional services firm in Canada, and a provider of IT placement services to corporate clients in North America and abroad. His firm currently represents over 1,500 IT contractors worldwide and has more than 85,000 consultants on file. Procom customers include a large number of leading Canadian banks and insurance companies.
He highlights how working through a placement firm can help avoid some common pitfalls when hiring temporary IT staff on a contractual basis.
Validate each individual’s expertise and experience. A common problem in the financial sector, as in other areas, is that many IT consultants are very specialized in one or two particular sub-areas. For example, an individual may have experience in a certain operating system, such as Unix, but no experience at the integration end of things. You need to know what you are actually buying when you bring a technical consultant on staff. The last thing a company wants is a consultant who’s learning his or her job on their dime. Find out what specific skills are required for the project and match those skills to the particular individual.
Demonstrate good corporate governance. Everything is fine until something goes wrong. It’s important to get your documentation in place from the outset and be certain it’s complete. One aspect you need to cover off is finding out who you’re actually dealing with when you bring in an outside contractor. Is she/he an individual or an incorporated professional? How is their business set up? Is their GST number valid; does it actually belong to them? What about their financial stability? What about security checks?
It’s also important to know the consultant’s work history with the client. For example, one finance company fired an employee for sleeping on the job, then hired him back (with no proper background check) a short time later for a job in another department. He then turned around and sued the company for wrongful dismissal.
It’s crucial to make sure the proper paperwork is all in place to protect against serious problems down the road. There are also pseudo employment issues – you need to understand remittance issues like who’s responsible for remitting retail sales tax, etc. Failure to understand these matters upfront could lead to substantial penalties and premiums after the fact.
You also need to be concerned with issues such as intellectual property rights and nondisclosure. Unlike employees, a consultant’s obligations need to be spelled out in a signed contract.
There’s a lot of paperwork involved when hiring an independent consultant. Most companies in and out of the financial sector are not properly set up to hire IT consultants on a short-term, quick-hire basis, and they can run into trouble if they don’t cover all the bases.
Rates can vary significantly and the market changes quickly. The market for IT programmers and consultants is very fluid, as they often move from one project to another. It’s simply impossible for any one bank or insurance company’s recruitment department to know who’s available when, with what skill-set, on any given day.
It’s not uncommon for companies to pay above the going rate when they hire consultants directly. A company may run an ad in the newspaper for a programmer one week and then hire an independent consultant from a small list of available candidates. The next week they may turn around and find that 17 more qualified consultants, demanding significantly less money, have just come on stream – at the exact time their IT project was to commence.
In contrast, a contract placement firm recruits day-in and day-out and can often offer a wider choice of quality candidates from an extensive database. They also have sophisticated software to track rates, so they know from day-to-day what these people are demanding and being paid.
Be flexible: people are people. When you’re dealing with consultants, you’re dealing with people and people have personal issues. Even well paid IT consultants can have financial problems. When you hire an independent consultant directly some of these personal issues may require the attention of corporate administration. Things like dealing with the banks and the court system regarding withholding wages, and such things as unpaid taxes, child support and alimony requests can add an additional administrative burden you didn’t expect, or want. Dealing with independent contractor’s invoices can also be an administrative headache as they are often submitted late, in inconsistent formats and lacking the detail required for prompt payment. A contract placement firm serves as a convenient buffer to such important details, claims McCrea.
Byrne is a Toronto-based freelance writer and marketing consultant. Procom Services is one of his clients.
