In a constantly changing industry one of the main challenges the gaming operators are facing nowadays is the reduction of margins due to increasing taxation and higher levels of competition. For this purpose, one of the strategic goals Umbrella Inc. wants to achieve is cost control and performance optimization. As part of this key objective a number of redundancies have been identified across the entire group and some employees laid off. Alongside staff shedding the human resources department has also identified the conversion of full-time consultants (FTC) into full-time employees (FTE) as another action to reduce operating expenses.
In a company that swiftly grew in the last 5 years consultants have been the quickest solution to rapidly bring the required expertise in house. This came together with an unbiased and objective approach, considering that they do not have a personal connection within the organization unlike employees. These advantages though have a cost: a consultant is always more expensive as compared to an employee. When the number of consultants is well balanced their value is maximised but the more consultants a company hires the bigger is the uncertainty of them to achieve the planned results. When short term contractors become full-time this risk increases together with costs. Another important factor to consider when it comes to consultants is their higher turnover and their limited knowledge of the business domain. To summarise: a limited number of consultants engaged to contribute on short term projects is the best scenario where they can perform at a high level on specific tasks that do not require deep knowledge of the business.
Replacing FTC with FTE with a like-for-like approach is a relatively simple task from a HR point of view because the number of required resources, budget and their duties are details already known. As said above consultant expertise is usually higher than employees. What has to be defined is the level of knowledge the replacement needs to have, how long and how much the company eventually wants to invest on the new employee to fill a possible knowledge gap.