‘Consultancy’ is the middle class word for unemployment.
-Richard Samuel, highly paid consultant, as related to me by former Daily Telegraph city editor and current business commentator Michael Becket
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Samizdata quote of the dayNovember 22nd, 2004 |
 18 comments to Samizdata quote of the day |
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I always thought it meant doing the same job you did before, but with twice the salary and no responsibility when it all goes pear shaped.
And ‘management consultancy’ is shorthand for ‘we don’t know what to do, so let’s pay somebody lots of money to tell us that we don’t know what to do, but using really big words.’ This is usually an alternative to the managers resigning in the face of their failure to understand basic concepts such as ‘profit,’ ‘loss’ and ‘hideous incompetence.’
It’s a bonus if the consultant actually knows what the big words mean, but it’s not essential – nobody listens atfer the first 10 minutes anyway. I think of the one we had who thought ‘objectivity’ meant the purpose of an exercise. We still use him, sadly.
EG
Consulting.(Link)
If you’re not part of the solution,
there’s good money to be made prologing the problem.
I used to have to cope with the IT consultant sub species. There are some very good ones out there but they were to expensive for my employers so we had to put up with the cheap ones. One used to ask us our opinions just before a meeting then offer them up as his own during the meeting although to be fair he would change words into buzzwords. He could usually say SME at least three times in a sentence. Another would offer Lotus Notes as the solution to every problem. We figured he had seen Lotus Notes working somewhere and had fixated.
But I’m just jealous because they earned more than me 🙁
Big fee consultants to government agencies or gov. owned companies (also some private companies) are usually nephews, cousins or in-laws of the managers. They hide under big monikers of consultancy firms. Understanding of the subject matter is not required, but buzz-words and incomprehensible language is part of the trade, useful in deflecting snoopers or critics.
It seems that everyone thinks consultants are simply overpaid verbiage reflectors… Well, for a long time I’ve thought about getting into consulting (for the money), but since I actually like to get things accomplished maybe I should reconsider…
tanstafl@gmail.com
What’s the upper class word for unemployment, golfing?
Consultants/contractors don’t get overpaid, they just get paid gross versus everyone else being paid net. Also, they either have to have an accountant who’s plenty fast on his feet – or else, they get taxed into oblivion (corporaion tax, IR35, personal income tax, capital gains… etc etc). I used to do computer contracting. All that BS is a major part of the reason I quit the game.
Most bitching about consultants comes from people with normal jobs too cowardly to become a gun for hire. I know rather a lot of consultants of various ilks who are doing well and enjoying what they do.
Besides if there is a market for what they do; what is wrong with making as much money as they can?
I’m sure they do. This doesn’t mean they actually achieve very much. Of course, many consultants (generally technical or specialist) are helpful and useful, and can offer good solutions where those closer to the problem don’t even know what it is. On the other hand, many of them (particularly management consultants) seem to do this kind of work because they cannot hold down a regular salaried position but do seem to have a First in Bullshit. I’ve met several management consultants no sane employer would ever hire full time. Funny, though, how they will believe the consultant is right when he isn’t a permanent employee, doesn’t carry the can when it all goes wrong, uses modish big words neither of them understand and gets paid twice the rate of anyone else. It is not necessarily the case that the more you pay someone the more valuable his advice is – it is just expensively fashionable, not necessarily useful or even accurate.
If managers knew their jobs, they wouldn’t need management consultants. If they need management consultants, they can’t manage and shouldn’t be employed in that role.
Nothing. What’s wrong with moaning about their incompetence, ignorance and general uselessness?
In any event, does not the spread of the internet and the vast amount of free (as in beer and in speech) information available thereon render much consultancy rather pointless? I mean, why pay someone thousands to tell you something you can find out for free in a couple of hours of your spare time?
Wandering a bit from the topic, but I think one of the great things about the net is precisely this free-of-cost information. As with all new things, it creates opportunity but it also destroys old opportunities – and if the overpaid and underbrained consultant is one of these dying opportunities then I for one will not shed too many tears.
EG
Julian, how does anyone escape IR35 in practice, instead of theory, for all except the tiddler contracts you might do for a pittance for a friend in your spare time?
A few years ago I worked with someone whose cousin worked in the Inland Revenue department responsible for deciding questionable IR35 cases. According to this cousin, the Inland Revenue reserves the right to ignore the written terms of your contract if they consider that your actual activity equates to “disguised employment”.
My (elderly and absolutely by-the-book) accountant has said that the best you can do if you don’t want to be hit hard by a Revenue investigation a few years down the line is to submit all your contracts to them for approval.
Needless to say, only one of my contracts has ever been deemed to be outside IR35 (occasional web maintenance for a friend that gets me about 50 quid a quarter).
So, since almost all your income is sucked into IR35, how can any accountant of any ability do much of any value with the pittance that is left?
Two comments from a US perspective:
The frivolous — a consultant is someone you hire to tell you the time with your own watch. (attributed to Jerry Weinberg, noted (and highly valued) computer consultant)
the serious — most major companies do not listen to their own staff but revere the external consultant who provides the same message. That, in my insufficiently humble opinion, is the root cause of the problems reported by other responders.
regards,
Shirley
A lot of consultantcy may be a waste of time but remember that a lot of it is driven by state regulations, taxes, employment laws, and the like. Setting up a business nowadays requires one to chart all manner of rules, and consultants often sell their services to help firms negotiate all these horrors. Shrink the State, and you will probably shrink consultancy.
But consultancy would probably still exist even in a laissez faire world, given the increased complexity of business life in todays information age. So it may be all very jolly to snigger at consultants, but like lawyers, they are likely to be a durable breed.
rgds
EG: in all honesty I have to admit that I don’t know any management consultants but do know rather along of computer and other high-tech lines. In several cases these people were made-redundant/forced into retirement only to be hired as a consultant a few months later.
I suspect Jon P’s comment above is rather apt. Consultants, even of the management variety, are a necessary evil…here to stay.
Doesn’t mean we need as many as we have, though. If lawyers didn’t have a monopoly on conveyancing – and indeed if they didn’t line their own pockets by drafting law in parliament – then there would not be nearly as many lawyers as there actually are now. ISTR the Conservative government tried to remove the conveyancing monopoly, only to have the parliamentary lawyers whine and moan in protest. It’s their bread and butter.
As for consultants, if more managers were capable of managing and not simply in the job because they know the buzzwords and/or play golf with the right people, then the consultant skull count would also fall (and companies would probably be run a lot more efficiently and profitably, but there it is).
Both sets of people make things more complex than they need to be. This, after all, justifies their existence so it’s hardly suprising. Nor, though, is it necessary or desirable.
EG
Cockraoches are a pretty durable breed.
eamon
Interesting discussion…. Here in the States “consultant” used to be code for “killing time between jobs.”
That’s still true for some. The laid-off middle manager in peak earning years (also the peak expenditure years) just wants to feed and clothe the family and live an uneventful life. He or she would much prefer the safety net of an employer. The need for employer-provided health insurance benefits makes a job an absolute necessity for some (no National Health Service over here, of course).
But the culture of entrepreneurship has taken hold strongly in the U.S. The entire workforce behavior started to shift in the last decade. More people are choosing to be self-employed and start their own businesses. It’s a choice for them, not because they have no other options.
Why are they choosing self-employment? There are several reasons.
One of them is the desire for a better integrated lifestyle. Many people — particularly those over 40 — have been downsized and outsourced so often that they have no expectations of security from an employer anymore. Given a choice between working long stressful hours with rigid work schedules imposed by an employer, and the chance to set their own pace, they choose their own pace. And if they are working long hours at least they are doing it to grow something that is theirs. The illusion of security from an employer doesn’t make up for wasting their lives away on work.
Ron: cash in hand and no questions asked, that’s one way. Even if not, never ask the Revenue, they have a huge incentive to err strongly on the side of “caught”. Assume your contracts are good, and get insurance. They can’t spare the resources to audit everybody. Chances are you’ll slip below their radar.
Yes, this does mean that contracting / consulting in the UK has more or less become a “black market”.
Consultancy is the middle class word for unemployment though superficially witty is about as accurate as stating ‘independent caterers are chefs who cannot get work in a large hotel’.
Good consultants add demonstrable value to the organisations that use their services. Bad consultants don’t. The former are usually able to prove it by means of a successful track record. The latter can’t. If they are operating in a market where they can find clients for a specialism that is urgently needed, really does add value, is not available in-house and is in limited supply, they will prosper. If not, they won’t. Those who use B.S and who don’t build solid reputations don’t last. The market is ruthless.
The last decade has seen a growth in the provision of consultancy services by independents and small ’boutiques’ for a variety of reasons:
– an increasing number of people have gone freelance prefering to offer their services directly to clients and wishing to control their own working lives far more than is possible in large companies;
– large companies have down-sized and cut out layers of management that were not adding demonstrable value to their business. Such companies often prefer to use certain specialised services from outside agencies and consultants when they need them rather than to employ people to do the same given the extra tax and social security that this incurs.
I’m a little surprised to see some of the comments on here being posted on a libertarian site as I would have thought that the old-fashioned conservative view of how markets for services ‘should’ operate belongs more to sites like ‘Harry’s Place’…;-)