Considerations Involved in Engaging Consultants

Advantages

Easy to hire and fire: Consultants and "temps" can be engaged and dismissed quite easily making them the perfect short-term asset. This allows you to maintain your core group of employees and add additional talent for special projects, vacation fill-in, promotions, seasonal variations, business cycles, and so-forth. When the need subsides, you don't have to go through all the problems and hurt feelings involved in laying off regular employees.
New skills: Consultants often have skills and abilities that are not available in your organization. They can be engaged to provide special talent as needed and can often pass those skills on to your regular staff.
Stick to your core business: Outsourcing your technical needs can free your management staff to concentrate on your core business.
Economic: After you add in overhead and management costs, hiring consultants or "temps" is often less expensive.
More productive: Highly skilled professionals are often more productive than in-house staff. People who freelance their skills usually have many years of solid experience to draw on. Often older, they are less distracted by outside concerns and have acquired a healthy work ethic.
Cost avoidance: Using consultants at the beginning of a project or change in business methods can often save hundreds of thousands of dollars down the road. Good consultants have seen what works and what doesn't work. Their experience can steer you away from pitfalls you may not know exist.

Higher cost: Consultants sometimes cost more than regular employees. As such, you may want to consider hiring full-time help if you plan to keep them on staff for the foreseeable future.
Overseas outsourcing can fail: Outsourcing to overseas sources often doesn't work out. Time, language difficulties, and cultural differences often kill what should be a mutually profitable relationship.
No knowledge of in-house procedures: Outside helpers don't know your business or your organization and procedures as well as you do. They have to go through a learning period the first time you engage them.

What's behind the charges?: Contractors sometimes cost more than in-house employees. This is because the contractor usually can't work a full-time schedule. Between engagements, the average contractor makes no money, but s/he still has to pay the mortgage and put beans on the table. The extra income s/he received during an engagement helps to cover the "dry" periods "on the bench". Also, the organization that employs consultants has to make a profit as well to cover the costs of rent, telephone, in-house employment, etc.
Rates differ by length of engagement: Short-term engagements will usually command a higher hourly rate than long-term work. Long-term work represents less "bench time" and thus lowers the contractor's expenses.