Comparing Agencies & Consultants to Full-Time Employees

While it’s impossible to apply criteria for every business need universally, we urge you to use this comparison on a case-to-case basis!

1. Time: Efficiency/Productivity

  Agencies

Productive work towards the project’s goal starts immediately. Time taken to understand your business and requirements is customarily covered in the proposal period.

  FTEs

There’s often a lengthy ramp-up to even half-productivity. 

  Edge

There are ways to minimize both, but in most scenarios, consultants start faster and finish efficiently.

  2. Total Cost

  Agencies

Can be expensive – Retainer/Fee includes overheads like proposals that don’t convert, training for their teams, and on-demand availability. But for specific, well-structured deliverables, it’s hard to match the expertise that consultants/agencies offer.

  FTEs

High variance. Except in the case of inexperienced talent in subprime locations, experienced, effective and efficient talent can cost more per month than an agency’s entire billing. 

  Edge

With so much range based on geography, experience, and choice of consultant, this one’s likely a tie.

  3. Flexibility of Cost

  Agencies

Firing one isn’t fun, but it’s generally straightforward and largely unemotional. What’s more, agencies and hirers often negotiate overwork/hours/projects and ramp up spending when required, an impossibility with FTEs.

  FTEs

No matter how good you are at off-boarding, friction, emotions, and negative feelings are inevitable while letting go. FTEs believe that only severe events lead to downsizing. Layoffs (for performance or cost) are always ugly. Furthermore, there’s no way to ramp up or down without this pain — FTEs don’t give fractional time, nor can they take fractional pay.

  Edge

 Consultants

  4. Emotional Resources Required

  Agencies

Little emotional investment. A great client-agency relationship, by its very nature, tends to be professional and straightforward.

  FTEs

Excellent people management encompasses bringing your emotions to work and leaning into complicated issues, conversations, and feelings. 

Although emotional investments are natural and even necessary, they can get cost substantially in the investment calculus.

  Edge

 Consultants

  5 Quality of Strategic Output

  Agencies

For quick fixes, competent consultants who see dozens of similar problems every day contribute more rapidly & strategically. And so, they bill hundreds of dollars hourly.

  FTEs

FTEs make a team of capable folks with the depth of knowledge around a particular business, making up for the lack of experience over a new, specific predicament.

  Edge

Ideally, businesses need both types of resources: deep, internal knowledge combined with an agency’s perspective and expertise.

  6. Replacement Time & Effort

  Agencies

Switching between agencies is generally following exit clauses of the agreement.

  FTEs

Firing and re-hiring for a role internally drain the organization’s resources. The stats are unfavorable: turnover costs average between 100-300% of the replaced employee’s salary, and ~8 months average for a new employee to pick up momentum.

  Edge

 Consultants. No question.

  7. Paying for Deliverables vs. Time

  Agencies

The model is exceptionally straightforward: money in exchange for deliverables. 

  FTEs

FTEs do not deliver as consistently as an agency. Except in core business areas where experienced employees have established pace & momentum, creating a flywheel effect, FTEs lack the tactical consistency an agency offers for newer deliverables or agendas.

  Edge

Consultants are efficient, effective, and on a budget far more often than FTEs.

 Limitations of Agencies/Consultants

Anti-agency sentiments come from those that believe that agencies/consultants could never be as ‘invested’ in the business as team members. However, we must also discuss the possibility of the inverse: agencies desperately want to deliver on their promises and keep organizations happy, but employees recognize that circumstances are more flexible.

We also have to account for how FTEs feel about hiring consultants. FTEs have to feel extremely secure about their abilities, value, and ties to the organization to feel optimistic about hiring experts on demand. FTEs present negative sentiments towards hiring consultants fearing diminished influence stunted career growth or reduced to performing mundane tasks.

On the flip side, when consultants perform poorly, FTEs are burdened additionally with cleaning up the mess. Organizations would have wasted capital that could have been invested in the existing team and would have also diminished the morale of FTEs.  

How to Get the Best of Both Worlds

It is possible to eliminate most drawbacks of consultants. With intentional, strategic foresight early on, it is far easier to get the best of internal teams’ continuous focus AND outside agencies’ expertise and pay-for-performance model. Organizations have to :

1. Hire agencies early and often. 

When FTEs get used to working with outside consultants, emotional issues (ownership of projects, trust in the team, and potential jealousy) quickly fade.

2. Contract for work that requires little to no maintenance. 

Content projects, SEO, digital PR, email onboarding setup, and CRO, fit this bill flawlessly. So make one-time data purchases, market research, training, and many more.

3. Be willing to switch agencies/consultants if you’re disappointed. 

Agencies come with low switching costs. But organizations doing this a lot, introspect! It might be about the clients, not the agencies. Setting reasonable deliverables, showing patience, and judging based on work quality/performance are crucial.

4. Aim for a culture where firing (or losing) FTEs isn’t seen as abnormal or failure. 

Talk to folks you interview about this, talk about it regularly at internal meetings (“should we hire a consultant to do this, or do you have the bandwidth?”), don’t make it something you (or anyone you work with) fear.

And finally, read Liz Fosslien and Mollie West Duffy’s book, No Hard Feelings!