Consultants or Staff: Which is the Right Solution for Your NPO?

With the “Great Resignation” happening across the nation, you may find yourself focused on NPO hiring. The question to consider is whether it’s more beneficial to bring on consultants or hire onsite and on payroll staff. Watch today’s Monday Money Moments (and skim the transcript below) to learn the pros and cons, costs, and benefits of each option.

Dana Miller (00:01): Hello, and welcome to Monday Money Moments with myself, your host, Dana Miller of Executive Financial Insights. With the great resignation that is happening, we need to determine whether or not we should bring in replacements in the form of consultants or onsite and on payroll staff.

(00:26): So our topic today will be determining which is the right solution for you. And we’ll go over pros and cons of both, and costs and benefits of both for NPO hiring.

Benefits of Hiring Consultants

(00:37): So let’s start with consultants. Benefits of consultants:

• High levels of expertise.
• A lot of experience and they can bring some of that experience into your organization by providing opportunities or solutions that you may not have encountered or thought of in the past.
• Very strategic. And so, they like to do big picture focus, and then they also are very surgical at the same time, so lasering in on what is going on and how to resolve the particular issue in the moment.

Consultant Types to Consider

(01:18): Examples of consultants and my recommendations for an NPO hiring consultants:

Law Firms

I would suggest start with a law firm. I highly recommend using a whole law firm instead of a single on-staff lawyer because of the level of expertise. Lawyers generally will focus on one particular area and a law firm will have many lawyers focusing on individual areas. And so whatever issue you may have, they should have someone who can advise you accordingly.

Chief Financial Officers

You might want to consider outsourcing your CFO. That’s another opportunity to bring in if you don’t have the need for a full-time CFO at this point in your organization. Outsourced CFOs are becoming the hot new thing in the marketplace, and they can come in for a few hours or a few days a month and help button up your finances, your strategies, your IT, your risk management, all the things.

Human Resources

(02:30): Human Resources. That’s another good opportunity if you don’t have a very large staff, but you definitely want to stay on the right side of department of labor issues. So, an outsourced human resource professional can help you navigate all of the complexities and the intricacies of staffing.

Marketing Firms

(02:54): A marketing firm. Again, similar to a law firm. There’s lots of specialization in marketing. Do you want social media? Do you want print? Do you want online? Do you want TV, radio? So marketing is another good opportunity for an outsourced firm.

Information Technology

(03:17): IT is another great one, because again, it can be very specialized and there’s a lot going on in making sure that you’ve got all the resources that you need, from someone to set up your computers to making sure you’re in the cloud, making sure that you don’t have fraud or opportunities for bad guys to get into your computers.

Other Considerations

(03:41): Insurance brokers, of course they are wonderful, and they are once a year kind of outsourced people that may be of assistance for you.

(03:53): And then fundraising and grant writing. Again, lots of experience and they have a lot more resources than maybe somebody on site and on staff.

(04:06): So those are your examples for your consultants that you might want to consider.

Benefits of Hiring Staff

(04:11): Here’s the case for an NPO hiring staff and, and making someone on your payroll:

• Acclimated to your business.
• More dedicated to your mission.
• Definitely more relational from an internal perspective. So, you are now making connections with people who can be there every day and look around and make suggestions for things that they see.
• Have boots on the ground. So, they’re very valuable. If they’ve been with you for a while, keeping them on staff and all of their institutional knowledge is hugely beneficial to the organization.
• Willing to take on additional duties that may not be normally within their job description. A consultant generally won’t do that, but your staff will.
• Pitch in, and they also work across the aisle or across different departments to help out and help you meet your mission.

Departments to Hire Staff For

(05:17): Examples of staff would be:

• Program staff
• Administrative staff
• Accounting
• Fundraising
• Management

I know I said you could use it for outsource — you can also do it internal. And then of course management, it’s a little tough to outsource the CEO and, and your senior management or actually any management. It’s easier to have somebody with what we call skin in the game.

Cost Considerations

(05:46): So let’s talk a little bit costs, real quickly. To be honest, costs can be very similar, even though your consultants are expensive, right? They charge several hundred an hour (or they can).

First of all, they’re not working for you 40 hours a week or 2080 hours a year, which is what an average pay year is.

(06:09): So they are expensive in the short term, but in the long term, they might be a better value for you because with staff, you have all the things: you have training, you have salaries, you have benefits, you have time off, you have holidays, you have vacation days, you have a building and you have equipment for them and space that you have to pay for. So it can add up quite a bit. So it just depends, on what you’re looking for and where you are going to get the most value for your money.

(06:46): Thank you. And if you would like more resources and information, join me at www.executivefinancialinsight.com.