Monday, August 17, 2009

Corporate Versus Consulting Jobs

One question that repeatedly comes up in conversation is whether corporate or consulting jobs are better.  Once I get past the obvious ‘It Depends’ response, there are some clear differences that aren’t necessarily apparent at first glance.  Here is my take on the question.


Career Versus Job

I’m definitely not breaking new ground when I say there is a clear distinction between a career and a job.  My chosen career is computer networking (or less specifically, Information Technology), and my current job is a network manager / architect for a Fortune 500 insurance company.  I’ve had several jobs in my career, but only one actual career.  Your career is generally the answer to “What do you do?”, while your job is the answer to “Where do you work?”  When I’m asked, my answers are “I build and maintain computer networks” and “I work for an insurance company” respectively.  It is extremely important to put the emphasis on your career.  Often times, focusing on your career and focusing on your job go hand-in-hand, but occasionally they will diverge.  For example, after I earned my CCIE certification, I sat down for my first performance review.  My manager, who I respected very much, was thrilled with my performance, but could only offer a modest increase in compensation on a low base salary.  He mentioned that the plastics industry (my employer’s field) was in bad shape, and he would have offered more if it was possible.  I understood the predicament, but later I realized that I didn’t work in the plastics industry.  I work in the computer networking industry, and things were going quite well there.

Don’t take this advice to an unwise extreme.  Demonstrating a history of indifference to your employer will undoubtedly decrease your value over the long term.  It would be very difficult to find a suitable job if your resume is long on experience but short on loyalty.  As a manager, I can easily understand early career applicants showing a few employers, especially if the increase in responsibility and experience demonstrates a logical pattern.  If the pattern continues into the applicant’s later career, I’d be inclined to wonder why things weren’t working out with so many different organizations.


Categories of Networking Jobs

I broadly separate my employment history into two categories:  Corporate positions and Consulting positions.  Within the networking field, corporate positions entail working in a specific environment to solve problems for your organization.  You don’t necessarily need to be a full-time employee of the organization; I’ve had corporate jobs where I was a contractor.  Consulting positions usually have all the responsibility of corporate positions, plus an extra layer of organizational overhead.  To be truly successful in a consulting position, you’ll need to focus on the profitability and success of your consulting organization first, while also fulfilling the needs of your customer (the corporate entity).  I’m leaving out reseller positions, primarily because I’ve never had one, so I haven’t given much thought to the environment.  I’ll theorize that it is similar to consulting, with the added pressure of pushing products (physical, rather than labor) on the customer, but that’s just a guess.

I spent three years (1998 – 2001) in consulting, and nine years in corporate environments.  My consulting roles were during the heyday (and later the crash) of IT consulting.  Maybe things are different now, so keep that in mind while considering my thoughts below.


Points of Comparison

Suitability for Early Career

I’ve frequently questioned the suitability of consulting for early career engineers.  At my local Netigy Corporation office I saw the drawbacks of hiring junior engineers.  They’re often the first to go during tough times, and without suitable assignments, it is very difficult to learn new skills.  Most engineers need meaningful work to build their skills, and at times, it can be a challenge to find that in a consulting environment.  Consulting organizations are hesitant to place an engineer in a role where they haven’t already proven their abilities.  Corporate environments generally provide better opportunities to acquire and utilize new skills.  There is also a great advantage to implementing a solution to a problem and then seeing how it works over the long term.  This is more likely to happen in a corporate environment.


Perhaps the best way to understand compensation is to think about what makes an engineer valuable to an organization.  In consulting, I’d say about ninety percent of your value is tied to your revenue (bill rate X utilization).  I was once directly told that my compensation had hit a peak because my bill rate didn’t support an increase.  This was despite my efforts to grow my account from two to seven consultants, often at significantly higher rates than I was billing.  More sophisticated consulting companies will factor this in, plus mentoring / leadership, pre-sales work and other factors, but ultimately profitability comes down to individual revenue versus expense.  Compensation is not as easy to understand in a corporate environment.  You can look at replacement cost (how much would it cost to higher a new engineer for the same role), corporate salary structures, value delivered, etc, but it’s less quantifiable than in consulting.

It has become apparent to me that corporate salary structures are getting much closer to the consulting environment.  In the late 90s, I found it necessary to enter consulting to achieve the full value of my experience.  Even in 2001, when the consulting market was beginning to crumble, I couldn’t justify moving back to the corporate world on the basis of compensation.  I chose to stick with Netigy until they closed their doors in September 2001.  Only then did it make sense for me to move back to the corporate world, this time as a contractor.  In talking with other engineers who have recently changed jobs, I can see that the pay disparity has shrunk considerably, and when you add in the value of non-cash benefits, we may be nearing parity.

Job Security

In consulting, your job security is dependent on your ability to bring in revenue.  There’s always a place for cash-flow-positive consultants.  In the corporate world, again, things are not so clear.  Because there is no direct correlation between job performance and revenue, job security comes down to relationships, replacement value, the organization’s view on the value of IT, and countless other factors.  You also need to look at the viability of the organization.  If your employer (whether consulting or corporate) isn’t able to keep the doors open, it doesn’t really matter how good you are at your job.

I prefer to look at job security more broadly, in terms of employability.  It never much mattered to me if my current job was secure, as long as I could be confident that I would find another job in a reasonable amount of time.  This viewpoint allowed me to find a wonderful opportunity when Netigy went out of business.  If I had been focused on my specific job’s security, I would certainly have left Netigy for another organization before they went bankrupt.  It also served to calm my nerves a bit in March 2009 when the stock market seemed to indicate that my current employer would not make it through the financial crisis.  If this viewpoint appeals to you, be sure to save some money.  I’m sure you can find better financial advice from others, but I suggest having a considerable amount of available cash to handle the inevitable periods of unemployment.

Relationship Building

Without a doubt, I met more people from the networking industry in my three years of consulting than I did in nine years in the corporate world.  Some of the relationships I’ve built have lasted for a decade or more, and several have resulted in jobs for both me and my counterparts.  In fact, I’ve dragged one guy between three different companies, and I wouldn’t hesitate to call him again if the need arose.  In the corporate world, it is easier to create lasting relationships, but I still suggest acquiring the ability to quickly build rapport.  Use social networking (Twitter, LinkedIn, Cisco Learning Network, etc) and get to know people in training classes and seminars.  Don’t think of this as creating a network to use later, but as a way to add a social component to your career.  No one wants to be used, and if that’s your intention, it will be obvious.

Work/Life Balance

Bear in mind, I’m coming at this category as a married father of three boys.  What I want out of this category may be wildly different than your needs.  In my experience, a corporate position provides the better work/life balance.  I am sure there are corporate positions that require travel, and there are consulting positions that allow you to be home every evening.  I’ve done the constant travel thing, and it has a few benefits:  Frequent flyer / hotel points, plenty of study time, seeing new places, etc.  If I weren’t a family man, I would probably find even more great things about the traveling lifestyle.  Even in my corporate positions, I’ve found opportunities to do some travel, and it has been a nice change of pace.  My worst work/life balance issue in the corporate world was the three years of long (90+ mile each way) commuting I signed on for.  And of course I still get to ‘carry the pager’ for on-call work and escalations, as well as work the strange hours that our change windows dictate.  In return, I get to work from home and put my kids on the school bus in the mornings.

These are rather gross generalizations of the two environments.  I know of one consultant who has worked almost exclusively with the same government client for a dozen years.  He lives near his client and seems to have worked out a great work/life balance for himself.  I have also worked for a consulting company that strived to keep everyone local.  Every situation is unique, so don’t rely on these generalizations.  Do your homework if you are interested in changing jobs.

Need for Certification

Consultants need credentials to find work.  Consulting organizations use certifications in their marketing and sales pitches.  It’s a required part of the game, and it benefits the consultants, as their value in the industry increases because of it.  I once pursued my CCIE in WAN Switching to help out my consulting employer.  I got as far as the CCNP and CCIE written, and was scheduled to take the lab when I got sidetracked.  It assisted us in landing a significant engagement and allowed me to broaden my horizons a bit.  I only rarely used the knowledge, and by now, it’s almost completely gone, but it was a great experience.

As I mentioned in a previous post, corporate employees should also acquire certifications.  It makes life significantly easier when you find the need to market yourself via a resume.  Don’t shortchange yourself, especially if you can a supportive employer who is willing to assist you in achieving your goals.  If you are having trouble selling the idea of getting certified to your employer, remind them there are benefits for them too.  My pursuit of the CCDE cost my employer approximately $3000, including travel, books and registration fees.  In return, they got dozens of hours of evening/weekend study time, and in my opinion, a more qualified Network Architect.  All for less than the cost of a one-week training course.  If that doesn’t convince them, remind your employer that CCIEs get priority escalation for TAC cases, which will cut down on MTTR.


Additional Thoughts

I certainly don’t want to come across as recommending that you should always chase the money.  A friend commented on my last post that there are other factors to job/career satisfaction other than money, and he’s 100% correct.  I would not take or stay at a job that didn’t meet my work/life balance requirements, even if the money was excellent.  As a matter of fact, I worked with David at a previous employer, where I left for this very reason.  He doesn’t remember, but in fairness, I was only there for six weeks before I realized the fit wasn’t right.

David made a second point that bears repeating.  Non-technical skills are very important, and need to be developed alongside technical ones.  It’s a bit more difficult to build that into a study plan.  My recommendation is to emulate successful people at your job.  If you don’t see any, well, you’re probably not with a very good company and you should be considering whether you’re at the right place.  Most people are happy to provide advice and mentoring.  It’s one of the best parts of my current job.



Again, remember that my consulting experience is from about a decade ago.  Things may have changed significantly since then.  If they have, please add your thoughts in the comment section so I can be more accurate in future posts.  As for me, I’m reasonably happy with my current job.  It has given me the flexibility to pursue my career interests, including management.  I have also been able to do a bit of consulting to maintain skills in technical areas that don’t exist in my employer’s environment.

Hopefully these descriptions will help you make the right career decisions.  Keep in mind, if you ever do make an unwise career move, you can always make another move to get back on track.  I don’t know many people in this field who haven’t made a bad career move at least once...  I know I have!

1 comment:

Anonymous said...

Great article Jeremy! It is especially useful for someone like myself, just starting his career in IT.