Hire an Employee or Contract with a Consulting Firm? What to Consider

June 4, 2018 Alex

A red apple and green apple sitting beside each other on a wooden tabletop.

As we reported earlier this year, data is playing an increasingly important role in marketing decisions, and marketing and martech salaries are on the rise—and it’s getting trickier to find qualified talent, especially when it comes to those who are Marketo experts, as well as those who are well-versed in marketing automation, user experience and machine learning.

So as a marketing director, VP or CMO who is looking to augment your team, how do you make an apples-to-apples comparison when it comes to determining whether to hire in-house talent or bring on a consulting agency? Let’s take a closer look.

Project Work, Larger Initiatives & Campaign Execution

PROJECT WORK: Let’s cover the easiest one first: project work. If your marketing team is interested in tackling a specific project, like an overhaul of your lead scoring system, you’re almost always going to be better off going with a consulting firm to make it happen. For standalone projects that have a defined goal, specialized consulting firms are able to get in, get the job done and move on more quickly than you can get the average employee up to speed!

LARGER INITIATIVES: Larger initiatives that need a driver—like a migration from one marketing automation platform to another, or roadmap to scale your marketing operations—aren’t as straightforward. In some situations, a strong in-house leader working with a solid team is the smart approach, but in other scenarios, hiring a consulting firm makes more sense. Cost (and real cost) will be a big part of your decision making, but don’t let it be your only consideration.

CAMPAIGN EXECUTION: And if your main focus is on executing campaigns, you’re typically better off bringing in an consulting firm or agency to make it happen. Why? Because a consulting firm can easily help you execute a much higher volume of campaigns immediately, without the onboarding or training typically necessary for an in-house employee. Additionally, working with an agency means you don’t have to worry about sick days or vacation days; while your campaigns may sit idle or get behind if your in-house marketing manager is out with the flu, if you work with a consulting firm they’ll shift resources to cover your programs’ needs. And finally, because you have an entire team of people working on your campaigns rather than all of the burden landing on an individual or two, agencies are able to optimize and implement improvements as they execute–making your campaigns faster and more efficient in the process.

Hiring In-House Versus Agencies, At-a-Glance

 

In-House Talent

Consulting Firms

Real Cost

Salary+ benefits +
Days off

Flat fee

Knowledge/Skills

One talented individual

A team of experts

Access to Resources

Rarely have insider access to martech providers

Often have direct relationships with martech providers

Innovative Perspective

No or little experience leading organizational change

Extensive experience leading organizational change

 

The Perceived Cost of In-House Talent and Consulting Firms

The first thought that comes to mind when comparing an agency versus in-house resource is cost—which approach is more cost effective? At first glance, the hourly consulting rates of martech consulting firms may make a salaried hire seem like a bargain in comparison. But let’s dive a little deeper.

Gathering listed pricing information and doing competitive research, as well as factoring in our own consulting rates, we estimate $200/hour as an average martech firm consulting rate, which works out to an average yearly salary of $400,000* a year. With the average marketing automation architect making between $145-180K and the typical market data analyst pulling in $80-185K, it’s easy to see why some senior marketers may default to in-house talent as their first choice for solving staffing shortages. But keep two things in mind when you’re comparing the pros and cons of hiring in-house versus hiring an agency:

  • It’s tempting to compare an agency’s “annual salary” versus the annual salary of an in-house position, but when is the last time your business (or any business, for that matter) hired a consulting firm full-time? It doesn’t happen. The reality is that consulting firms get more done in less time.
  • It’s important that you perform a truly valid comparison between consulting firms and in-house talent to reach an informed decision. Making a choice based on estimates or best guesses can often lead to disappointing results.

The Real Cost of In-House Talent and Consulting Firms

If cost is important to you (and we’ve yet to meet a marketer for whom it isn’t!) then it’s important you consider the total overall costs associated with each approach to solving your talent shortage. The salary you pay your data scientists, marketing analysts or marketing automation specialists is one part of the equation, but there are other elements that add to the overall cost per employee, including:

  • Vacations, PTO and holidays
  • The costs of advertising, recruiting, hiring and retaining talented employees
  • Onboarding and training costs
  • Employment taxes
  • Benefits, including insurance, dependent care assistance, tuition reimbursement, retirement plans
  • Office space and overhead
  • Equipment and licenses (computer, mobile phone, software licenses, etc.)
  • Bonuses

And all of those little costs here and there add up. According to a Deltek survey reported in Toptal, each employee typically costs the company roughly twice (1.99 times) their base salary.

With consulting firms, the only fee you pay them is the consulting fee you agreed upon in your contract. There are no “hidden” costs that are buried in other areas of your business; just one straightforward fee that you can budget for every month, and write off as a business expense at the end of the year (though please note that I am a marketer, not a tax advisor, thank goodness!)

More Knowledge/Skills=More Value in Less Time

Another factor to consider when determining the best approach to your marketing talent needs is to understand that consulting firms bring a wide breadth of talents and experiences that a single marketing hire typically is unable to provide. Because your company is able to benefit from the expertise of an entire team of marketing consultants and not just one individual, you’re often able to overcome challenges, address issues and resolve problems much more quickly than you’d be able to if you put a single person or even two new hires onto the task.

Think about it this way: If you’re looking for a way to streamline your marketing operations and scale your marketing campaigns, and you only have $75K to spend over the next year to make it happen, which path forward is your best bet?

  • Hire a full-time marketing automation specialist with two years’ experience at $65K, leaving room in your budget for training opportunities as well as to provide a year-end bonus to keep her from jumping ship
  • Bring on a professional martech consulting firm with one Marketo Certified Solutions Architect and two Marketo Certified Experts performing an audit of your existing marketing operations and providing a 9-month roadmap and implementation plan

Clearly, both options fit within your budget, but one helps you achieve your goals more efficiently and effectively. And unlike employees who are often drawn to provide input on a number of tasks across the organization, consulting firms live, breathe and work with martech software for clients on a daily basis. They can quickly jump in and begin solving problems, adding value and providing return on your investment because they are up-to-date on every aspect of the technology they’re using.

Insider Access to Resources

There’s a lot to be said for getting your issue or your request the notice and attention it deserves from your martech application provider. But if your organization is like most, your product or support request is answered in the order in which it was received.

Consulting firms, however, often have direct relationships with martech providers that give them insider access to resources that aren’t available to the average user, e.g. the average marketing employee—and that insider access can make the difference in how quickly you get what you need. Additionally, consulting firms often have knowledge of which direction the martech application is heading in next and when new changes are anticipated, and can give you an informed opinion on upcoming purchase decisions and what this means for your business.

An Innovative Perspective

Another element marketing leaders should keep in mind when determining whether to bring in an employee or hire a consulting team is that of innovation. Someone who offers a creative approach to your organization, bringing a fresh set of eyes and a willingness to shake up the way that things have always been done for the sake of optimizing and enhancing your marketing processes has the potential to create positive change.

However, we’ve found that oftentimes consulting firms are more successful at leading this organizational change than employees. Here’s why:

  • The outsider’s perspective: When a new employee comes in and suggests a new way of doing things, they’re often met with resistance and resentment because they haven’t “paid their dues” or they don’t “know how things work” at the business. Because an outside consulting firm is inherently outside the organization, they’re expected to have a different opinion. They still may initially met with employee resistance or resentment, but are used to this and have strategies for getting buy-in and overcoming challenges.

  • The team approach: During any time of change, there are bound to be concerns and issues. A consulting firm’s team approach increases the chances that questions will be quickly and thoroughly addressed and that challenges will be overcome. Additionally, a team of consultants reassuring anxious marketers that this “scary” change will work out well is more convincing than a lone employee attempting to do the same thing.

  • Experience: Consulting firms have literally been there before—they’ve helped organizations like yours navigate the treacherous waters of making big change. Because of this, they can share anecdotes and best practices learned from their past situations with similar technologies and challenges. For example, an employee may have assisted or even led a migration from one marketing automation platform to another, but a consulting firm has done it many MANY times.

Smart Decisions Lead to Positive Results

Making an informed decision—hiring an employee or contracting with a consulting firm for your marketing team’s needs—will have a direct impact on your results and your business’ bottom line. Most times, consulting firms make more sense for project work and campaign initiatives. But when it comes to larger initiatives, you’ll need to choose wisely. Compare the real costs associated with each approach, and consider the enhanced skill set, innovative perspective and access to outside resources that in-house employees simply can’t provide. Then, move forward knowing that you’ve made a true apples-to-apples comparison of your options.

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