Consultant Day Rates Incentivise Mediocrity

I spent several years working for IT consultancy organisations. Something I didn’t get then and still don’t get now is how consultants are essentially targeted to be average. Here’s how:

Consultants are targetted, bonussed etc on the amount of revenue they generate. The revenue they generate depends on the number of billable days they do.

  • Consultants who fail to deliver are eventually found out and removed from projects.
  • Consultants who finish their projects ahead of schedule end up charging fewer days.
  • The ones who do best financially, then, are the average ones who use up the expected number of days and are able to justify some extra billable days on top of the original engagement.

For sure this is a bit on the cynical side, but only a bit. In reality personal pride kicks in and individual consultants will generally want to do the best they can for their clients. For example, I have certainly seen many occasions where consultants (especially young-ish ones) will put in unpaid evenings and weekends to complete something on time. But it does worry my somewhat if we are relying on personal pride to outweigh market forces.

Does this mean I have a major issue with consultants? Of course not. I use consultants for many projects. And most of the time this involves paying day rates. But I work hard to ensure that the relationship and level of mutual respect is sufficient to give me confidence that I’m not going to be ripped off. Of course, you never know, do you?

No conclusions, just thinking out loud.



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