The reason hiring a consultant works, even when your employees are telling you what to do. It's because the consultant costs 10x more and is specifically being hired for direction... it's merely rationalizing "we're paying them $1000/hr for their opinion... that makes their opinion very valuable and we should listen to their advice. Johnny in the corner cubicle is paid to code, not for his opinions..."

Here in Norway, a "consultant" is just someone who is employed by a different company but works for your company. We don't get people to listen to the right people.

We just work like everyone else while the company pays a premium for us and we're the first to be let go if things go downhill.

In the US, that's a contractor. Many contractors are called "consultants," but it's mostly because "consultant" sounds better.

Consultants are (in abstract) paid much more for their expertise, and engagements are much more limited. A contractor might work 40 hour work weeks for one client for years.

My experience is that the take-home pay is almost identical for all three. To give an example, at one point in my career, I could:

* Charge $600-$900/hour as a consultant

* Charge $125-350/hour as a contractor

* Charge $150k-$200k as an employee

On paper, that works out to >$1M, 0.25-0.75M, and 0.15-0.2M, respectively, if I worked 40 hour work-weeks. In practice, at least for me, net pay was very similar for all three:

* Consulting had many hours overhead for one hour of work, and clients would often cancel on short notice.

* Contracting had an even split between selling myself and working. Work came in spurts (either too much, or not enough)

* Employment was steady

Free markets converged to very similar net take-home pay. Contracting and consulting had much more diversity of work (contracts, marketing, etc.), more flexibility on side projects (startups, etc.), and much more volatility. Volatility can be good or bad. A dry-spell can mean time to finally go on that vacation or focus on that startup. Or it can mean a lost mortgage. It depends on your life stage, savings, etc.

As a recent grad, contracting worked well for me. As a Dad, I preferred employment. Late stage (no kids at home, and mortgage paid off), consulting seems like the way to go.

When I was an IT industry analyst (basically a type of consultant) for about 10 years, we got good rates when we were directly (or near-directly) on the clock--up to about $10K per day or so. But the rub was that were relatively rarely on-the-clock. Bigger firms can make it work better because they bill out juniors at higher rates than they really are worth. It also works if you only want sort of part-time interesting work anyway. But it's not generally a great steady income stream.

As a contractor I'm paid regardless of my project status. I could earn more working with provision at a different agency but I like the security i have where I am now.

It's the kind of gig where I just work 40 hours a week for years. If something happens they just find me a new project. It's pretty chill.

That’s what consultant means in many places, but the thing being talked about in this thread is a management or strategy consultant, of which there are a few big prestigious firms who do this, and which is a reasonably common career path for ambitious young people.