For hire: an untapped treasure: As an increasing number of computer consultants go it alone, Lynne Curry tackles the question: independent contractors or agencies?

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The Independent Online
There are computer contractors who earn pounds 200 a day (a perfectly acceptable rate) and there are contractors who earn more than pounds 500 a day, which is rather a handsome income.

The super-league who inhabit the upper ground are likely to be senior information technology people with skills in management or consultancy, with years of wide and varied experience, the right skills and the ability to arrive at a new and strange office on a Monday morning and slide in with maximum authority and minimum ripple.

Despite their high rates, they come cheaper than their counterparts sent in by established and costly management consultancies, and the recession has left quite a few, formerly in senior positions with companies, available for hire. But are the agencies getting in on the act and broking these skills to their customers?

In the main, no, according to one management and IT consultant who has been on both sides of the fence - as a freelance contractor and as a client who has used agencies. Norman Shipley says there is a market for supplying senior IT contractors outside the management consultancy route, and that it remains largely untapped.

'Traditionally, 95 per cent plus of the agency market relates to requirements for analysts and programmes,' says Mr Shipley, who left a firm of management consultants a year ago to set up on his own. 'The recession has thrown on to the market a large pool of more senior IT people with management and consultancy-type skills. I believe some organisations recognise this and are ready to take advantage of skills for which, otherwise, they would be paying six-figure rates - or employing permanents.

'The traditional agency market, however, appears not to have recognised this trend and is generally not well equipped to market this skill base.' He has offered to develop this stratum of business in conjunction with several agencies, but all have been reluctant to get into new territory.

Meanwhile, according to Mr Shipley, companies who could use these people have little option but to bite the cost bullet and bring in management consultancies if they need skills wider than those of analyst-programmers. How, then, do senior contractors make the leap into the big league other than by giving up the independence freelancing brings and cutting each others' throats for the few staff jobs with consultancies?

Tom Saunders is perfectly poised to supply the route. He is highly successful, well paid and, according to one agency, constantly in demand at more than pounds 500 a day. Mr Saunders is one of a small group of senior independent consultants who often work via an alternative route. He obtained this contract not through an agency, but as an 'associate' with a consultancy.

'Almost all of the consultancy practices use specialist independent consultants as associates when the need arises,' Mr Saunders says. 'The employment of associates to discharge a consultancy assignment may be more expensive for the consultancies, as the associates are in demand.

'Associates' daily fees also need to provide for holidays, education and other periods where they're not working. This generally reduces the margin that can be achieved by the consultancies, but in the long term an associate may well be less expensive than permanent staff as the cost of training, salary, etc, are avoided.'

Mr Saunders is a registered associate with a number of consultancies and has been working in that way since the mid-Eighties. 'It works well. The more mature and experienced you are, the easier it is to work - no matter what the framework,' he says.

Personal qualities also come into the equation. Mr Saunders says the right skills, a proven track record and at least 10 years' experience go without saying - but the cultural hurdle is less definable. 'I get on very well with some practices because there's a natural affinity; in others, I find their working style not as comfortable.'

He is unconvinced that there are vast pools of expertise being wasted, believing long spells with one organisation leave many managers ill- equipped for consultancy as their experience is too restricted.

One agency through which Mr Saunders works is Methods Application, in Covent Garden, London. It has 850 people on its register, at pounds 300 to pounds 400 a day as IT strategy consultants, project managers or project support. Partners Tony Webb and Peter Rowlins say the quality of the contractors they supply ensures future demand.

'When you're working with consultants or clients, these people are your front-line and crucial sales people,' says Mr Webb. 'If you don't choose the right people in the first place, or don't treat them well, the work base disappears.'

David Treacher, a director of the contracts and consulting division of Harvey Nash, agrees that Mr Shipley has a valid point, but says that to supply senior consultants an organisation must have credibility in the first place.

'Most agencies are exclusively involved in analyst-programmers because that's all they understand. If they went to a large organisation and said they'd like to supply senior consultants, the client would just laugh,' Mr Treacher says.

This partly explains, he adds, why supplying senior contractors has remained the province of companies which have moved into that field from a base of executive recruitment. 'There is undoubtedly unused talent out there and I think there is a good market for it. Perhaps some of the people who are looking to get themselves placed in this kind of market should stand back and imagine they are in a client's position and ask if a client would take seriously the agency representing them.'

Agencies who can swim well at this depth, says Mr Treacher, can charge about half the rate of management consultancies and still make a reasonable return. 'Clients don't get any guarantee of service by going to management consultancies, because if you try to pin them down you can never do it.'

The point of contention is whether there are enough agencies with the breadth and credibility to sell the expertise available. Mr Treacher, from within, thinks there are. Mr Shipley, from outside, disagrees.

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