Maintaining the quality of service is one of the most challenging aspects of growing a consulting business. Delivery is often shifted away from the founders. Many companies use associates to help them find the right skills and manage risk. We will discuss the pros and cons of using associates to help grow your consulting business. Also, we will detail what consultant buyers look for in determining the ratio of associates to employees.

The Power of Associates

Client firms used to disguise independent contractors as employees to save money. This would allow you to enjoy all the expertise and benefits of an independent contractor without hiring another full-time employee. However, new laws have seen this trend reverse as companies have begun to ban the use of contractors/associates entirely, regardless of whether or not they would fall foul of this legislation.

These companies are turning their backs on their associates and the benefits that they can offer. This leaves many contractors looking for work. It is a unique opportunity to scale for consulting firms. You can find the right talent to help your company take on more projects, provide better service to existing and new clients, and grow your consulting business.

How to Hire Associates

With all this in mind, is it possible to recruit associates for growth in consulting?

If done correctly, the answer is yes. 

Philip Lomax believes it is essential to consider when and how associates should not be used to weigh the pros and cons. As mentioned above, associates are usually more costly than employees. Therefore, they should be used only in five situations.

  1. You’re just starting and don’t have the money to hire full-time employees.
  2. Sometimes you need expert resources to help with projects that are not worth the expense of hiring a permanent employee. The firm will grow, and this increasing need will lead to economies of scale that justify hiring an employee over an associate.
  3. Despite your best efforts, finding enough employees with the right skills for a project is impossible.
  4. It would help if you were more flexible in resourcing for unexpected peaks or troughs.
  5. High levels of creativity and innovation are essential for success.

Many firms are tempted to hire a lot of associates as they grow. While hiring associates can be a quick way to scale your business, it may not be the best option for you. However, this could affect the image of your company. How can you find the right balance?

You are strategically choosing the right time to hire associates. These should be considered short-term solutions and not long-term patterns. You can easily fall into this trap, leading to long-term consequences, primarily if your consultancy is being sold.

These five situations are crucial for your use of associates.

Most consultancies provide a minimum of 20% associate contingency to cover unexpected demand fluctuations. However, this can vary depending on the sector. Although buyers are more open to associates now than in the past, they may be hesitant about associates who are significantly greater than their practice.

How to Hire Associates

These fundamental principles should guide your associate hiring practice if you’ve chosen to expand your consultancy by choosing the associate route.

  • Recruitment of quality associates with similar methods to employees.
  • Protecting IP both contractually as well as in sharing practices.
  • Quality assurance processes that are well-designed and managed.
  • Integration of associates with existing processes and teams (see below).
  • Keep great friends by integrating them into the culture and making them feel ‘belonging’.

These principles will help you attract the best talent to your company. In the interim, while you build your staff of associates or full-time employees, it is essential to tell your clients.

Clients will feel that you are providing the best possible service when they come to see you. You trust your full-time employee and have a particular impression that they are trustworthy. The temporary nature of associates doesn’t send the same message. Some firms may hesitate to tell clients about associates because client satisfaction and delivery should always be your ultimate goal.

The decision to do so should be made on an individual basis. However, the priority is the client experience. Associate risk is that they might not have the same level of investment in your company as internal hires, which could lead to inconsistencies in dealing with clients. These strategies can help reduce this risk.

  • It would help to recruit associates who share your values, especially those you trust.
  • We assist associates with the firm’s processes, tools, and values.
  • Work closely with associates until their practices and values match yours.
  • Audits of internal work.
  • Provide templates for email and documents.
  • Invite associates to company events or key meetings
  • Even when they are not on assignment, maintain excellent communication.
  • To help the team blend and create a cohesive approach, it is a good idea to bring associates on board at the beginning of a project.

This will help associates feel buy-in and encourage them to work following your practice. It will also create consistency for clients. This will result in more work for existing clients and new opportunities.

How to use Associates to Grow Consultancies

It is best not to use associates for anything other than delivery. As growth is the ultimate goal, associates should be a resource in areas where they can make the most of their talents. Using associates in business development, practice management, leadership, or creation IP is risky.

Be strategic about their placement. Prioritize your internal employees and use them for work and clients at a higher level. But this does not mean that they should be treated poorly. Although good associates might choose to work for one firm over another, ensuring they feel like part of the culture and the family is essential.

Associates can be helpful during the negotiation phase. For example, associates typically get paid half the rate that clients charge. However, this can be higher for more experienced associates. This can encourage associates to drive up client fee rates if they are made clear.

They can negotiate volume discounts for work associated with full-time staff. This could mean a 10% discount for a week’s work or 20% for one month.

Last Thoughts

As we have discussed, associates are a powerful tool to quickly access talent to improve the delivery of your consulting business. This should be considered a temporary solution and not a long-term strategy. A founder who wants to sell should aim to create a more excellent pool of full-time staff to serve existing and new clients better. If used correctly, associates can be a great platform to facilitate growth.