7 Rules When Hiring Consultants, Contractors, and Firms
Nothing is better than hiring a specialist or team and they deliver beyond expectations. Recently, the professional photographer I hired turned out to be a rock star, was great to work with, flexible and delivered. There are amazing individuals out there that offer a great service, are great people and serious tradesmen/tradeswomen in their respective craft. Niall is one of them. When you find them, you’ll share a kinship that will most likely last years or quite possibly the rest of your life. The trick and the goal is to find them and set them up for success upfront with requirements and not change them along the way.
Unfortunately, we end up imagining the amazing outcome in the hiring process and forgo the due diligence necessary to ensure it actualizes. We hire the wrong person, quality of work is poor, they don’t deliver or worse they hold the project hostage for more money because they underestimated the time involved to deliver what they signed up for. Even the Richard Bransons of the world hire the wrong person/team from time to time, and Valentino Rossi crashes. It happens.
Here at DevSixOne, we are the team that others hire and we also hire heavy hitters to help in areas that aren’t in our wheelhouse; we play both sides of the coin. We’ve had mostly great experiences and a few costly experiences that have taught us two key lessons. Don’t hire anyone that generates a red flag and have your requirements clearly outlined to give the hired help what they need to provide an accurate estimate of work, and also serve as the baseline of deliverables for the project.
Rule 1 – Start with recommendations within your network
Don’t search online yet. Reach out to your network and ask if anyone knows someone who has the skillset you are looking for. Most people won’t recommend someone if they don’t believe they can do the job, are good people, and live up to the recommendation; nobody wants to be the person that made a bad recommendation. This is your first line of defense with regard to your selection process. If that comes up short. Then you have to find someone through other sources. Craigslist.org, outsource.com, guru.com, freelancer.com, glassdoor, and so on.
Rule 2 – If a red flag presents, cut your losses
8 out of 10 consultants can’t actually do what they claim. Hiring and screening require you to be decisive and budget time accordingly. Cut them from the hiring list if you see or hear just one RED flag during any interaction you have with the candidate, no exceptions. Be committed to starting the search all over again if need be. NEVER give a consultant, contractor, or firm the benefit of the doubt. EVER.
Every time you identify a red flag, there should be a little guy waving a red flag frantically in your mind screaming, “Don’t do it!” What constitutes a red flag? Anything that your gut feels is wrong, isn’t right, is a lie, “off”, an incorrect answer, doesn’t make sense or is cause to be concerned or lose confidence.
Examples of Red Flags
- Lack of maturity and obvious sensitivity to a difference in opinion.
- E-mails, quotes, and documents that are not professional (Includes websites, LinkedIn profiles, etc.
- Low bids and short timelines.
- Blanket generalizations about anything really.
- When you question their opinion with conflicting evidence, they become offended.
- Not willing to work with your business practices or tools. For example, you may like to use Slack, and they refuse to participate.
- Smiling a lot from the left side of their face (fake).
- Scratching their nose often (lying).
- Recognizing you are hearing everything you “want” to hear.
- He/she implies superiority over you for not knowing what he/she knows.
- When discussing the project, they constantly talk about “hours” of work. They are not interested in solving your problem for you admirably, they are more interested in making sure there hourly rate and time are fulfilled to justify their value to the world. A deep psychological tick for most engineering consultants and contractrors; not so much for the marketing world.
If any of those pop-up, you should NOT hire the person.
Rule 3 – Pay a premium for peace of mind
We all have a tendency to gravitate toward the cheaper solution and it rarely serves your project in the way you hoped for. Paying a 25%-35% premium to ensure you are working with top-notch professionals where their work is their livelihood and their future depends on the reputation of their successful projects is the ideal scenario. If the aspect of the project is mission-critical, consider hiring a firm rather than individuals for the same reasons. Unfortunately, once we hired a two-man team of electronic engineers that never delivered on a mission-critical control board because they were less expensive. In hindsight, that 30% premium for the firm we initially engaged in would have been the least expensive choice.
Rule 4 – References, Example Projects & Background Checks
Absolutely mandatory to call at least a few references, review the quality of previous work, and do a simple background check on Google. One time, I found a candidate was on a sexual offenders list, and recently a colleague of mine incurred major losses from a known fraudster in another state; it happens.
Rule 5 – Ready up a Lawyer
Most consultants are doing the work on the side or moonlighting while working a full-time job. It’s not a real business for them, so they don’t have any real consequences for delivering as promised. The most cancerous habit in the industry is underestimating the work to be done and then resentfully doing the bare minimum to complete the job or worse hold you hostage for more money. They can literally, walk away when it’s not their livelihood and just a side-hustle.
Holding 50% of payment until the end is a traditional way to hold consultants accountable without a lawyer. However, make sure you have one, he/she reviews your contracts/agreements, and set-up an agreed fee for writing a letter if needed one day in the future. For us, any project of $10k or more requires a lawyer to review and we always secure a back-up candidate, just in case.
Rule 6 – Requirements & Specification Documents
As mentioned in the beginning, this step is critical. If you do an awesome job supplying detailed requirements, expected outcomes, specifications, and a hub of information for the contractor to access and collaborate within, then their estimates will be more accurate and they will have a full understanding of what they are getting into.
These documents enable the contractor to review, ask questions, and bid accordingly. In addition, they will serve as a reference list to refer too, check for completion and verify everything has been delivered “as promised”. In engineering, they serve as functional and performance requirements to test and validate the solution and in marketing, they serve as deliverables and performance requirements too.
Rule 7 – Consider a Feasibility Phase, Incentives & Penalties
Every project is a vast pool of unknown variables, outcomes, and complexity. Make sure you have an upfront feasibility phase in your project that you pay for to reduce the risk of failure while serving up a low-risk trial of the person, group, or firm you are choosing to work with. If red flags pop-up, you can terminate the deal and your losses are probably negligible as you most likely learned quite a bit. If it all goes well, then you have just set yourself up for success, confidence, and most likely have more information to revise the requirements and march forward with confidence.
If the project is significant and over a long timeline, it could be a welcomed addition to the agreement to aggregate payments with milestones to mitigate the risk for all. For the world’s smallest solenoid valve project we embarked on, it worked brilliantly.
- 20% – Feasibility Study
- 30% Deposit for Conceptual Prototypes (tested against conceptual requirements)
- 50% for Functional Prototypes (tested against baseline performance requirements)
- 30% bonus for exceeding the baseline performance requirements and hitting agreed targets.
- -30% for falling short of the baseline requirements.
This worked well, we worked hard from the very beginning to set ourselves up for exceeding the baseline to earn the bonus and not lose 30% if we fell short. In Product Development, it’s a big unknown whether you will nail it. Usually, the client shows up with a great idea and zero proof it will work as claimed. There will be significant risks to achieving the client’s requirements that may require additional unplanned work. In the world’s smallest solenoid valve project, we identified in the feasibility phase that meeting the target requirements were highly unlikely due to the limits of physics, material science, etc. Hence this structure lowered the risk on both sides of the table marching forward.
- Effective hiring is critical because of its broad implications when executed poorly; take it seriously and be the best you can be at it.
- Put the hiring task in the “important” and “urgent” sector of your to-do list. It should be one of the very first things you spend time on every day.
- Hire from within your network if possible, plan on paying a premium for peace of mind, and use an upfront feasibility phase to flush out any red flags.
- Secure two candidates, teams, or firms. One you will hire and one as a back-up and consider incentive and penalities if specific performance requirements are key to the success of the project.
- Requirements, requirements, requirements; outline your requirements in detail before you start the hunt.