When the comparison is biased
When the head of an SME has to weigh up the opportunity of working with a consultant, cost is regularly the first objection.
The calculation is quickly done: you multiply the consultant’s daily rate by twenty days, and you compare it to the gross monthly salary of a good profile. With that kind of comparison, the consultant generally costs two to three times more.
And yet this reasoning compares two figures that have no reason to be compared: an all-inclusive price (the consultant’s daily rate includes everything), set against a partial price only (the gross salary, which is merely the starting point of the real cost of an employee in Belgium).
According to our calculations, when you put the two on the same basis, by analysing the total annual cost divided by the days actually worked, the gap narrows dramatically. And in a number of common configurations, the consultant even works out cheaper than the employee. This article looks at various scenarios. You can test the comparison yourself with our consultant vs. employee cost calculator.
What an employee really costs in Belgium
The gross salary is only part of an employee’s cost. On top of the gross, more layers pile up:
- employer NSSO contributions, which weigh down every euro of gross paid;
- the employer holiday pay, the year-end bonus and any other bonuses, which carry the same tax and social charges as the salary;
- the potential dismissal costs: parting ways with an employee costs weeks of notice or severance, and this cost grows every year;
- the company car and its real total cost (leasing, fuel or charging, taxes, insurance);
- the benefits: meal vouchers, eco-vouchers, group insurance, hospitalisation insurance, phone, equipment;
- training, essential to keep the profile up to date and with a legally required minimum number of training days;
- the recruitment costs, paid once but to be amortised over the actual length of presence.
And there is a second correction, almost always forgotten: the days actually worked. From the theoretical working days, you have to subtract statutory leave, extra-statutory leave and sick days. The total annual cost is therefore spread over far fewer days than one imagines.
The corrected calculation thus has, on one side, a numerator that includes the full annual cost, and on the other, in the denominator, the real productive days per year. The daily cost of an employee has little left to do with the quick but simplistic “monthly gross divided by twenty”. Our simulator does this calculation for your situation, line by line.
Three configurations where the consultant is directly cheaper
The cost gap between a consultant and an employee depends on the configuration. In three very common scenarios, our simulations show that the calculation tips in favour of the consultant.
1. Senior and executive functions
The more senior the profile, the more the package swells, and the more the multipliers run away. The bonus represents a growing share of the gross. Group insurance, calculated as a percentage of salary, follows. The car moves up a range. Incentive plans add up. And the recruitment costs of an executive profile reach a substantial fraction of the annual package.
That is why, in our simulations, the consultant is very often directly more economical for senior and executive functions (e.g. CFO, CPO, CHRO): to their daily rate are added no bonus, no fixed costs, no insurance, no sick leave, no paid leave, and no training budget.
If you add to this that the consultant can be engaged on a part-time basis, the differential is more favourable still. Indeed, an SME rarely needs a full-time CFO, nor a full-time procurement director. It needs financial leadership or a senior Procurement consultant a few days a week. Yet a salaried CFO is recruited full-time.
2. Part-time functions
Part-time, the consultant is in the majority of cases directly more economical than permanent recruitment, whatever the level of seniority.
The reason is mechanical. When an employee moves to part-time, their gross decreases proportionally… but not everything else. The car costs the same. So do the equipment, the phone and the flat-rate insurances. The recruitment costs are identical, but are amortised over fewer days worked. The result: the daily cost of a part-time employee is higher than that of the same profile full-time.
The consultant, on the other hand, follows a simple rule: you pay for the days worked. Two days a week = two days invoiced. The cost structure adjusts perfectly to the need.
3. Temporary or uncertain needs
The potential dismissal costs are the line that many employers discover at their own expense. Parting ways with an employee costs all the more the longer they have stayed. Recruiting on a permanent contract for a need that turns out to be temporary therefore costs twice: on entry (recruitment, training, ramp-up) and on exit (notice or severance).
For a need of a few months to a year and a half (a replacement, a project, a transition, a peak in activity), the consultant avoids both bills.
Where the employee remains more economical
Full-time, on junior and mid-level profiles, and with good retention, permanent recruitment eventually wins out economically.
The gap nevertheless remains far more contained than intuition suggests, and it depends heavily on two variables that you control poorly: do you pay recruitment fees, and how long does the person stay?
Recruitment costs
Going through a recruitment agency represents a substantial one-shot cost, generally proportional to the profile’s annual package. This cost is amortised over the person’s actual length of presence. If they stay several years, it becomes marginal. If they leave quickly, it weighs heavily on a single financial year, and you have to pay again to replace them.
Conversely, if you recruit without an agency (network, direct application), this line disappears and recruitment becomes more competitive. This does not take into account the indirect recruitment costs (for example: internal training, time invested by HR, job-posting fees, etc.).
Retention duration
The second variable is more uncomfortable: how long will the person stay? The Belgian market for certain finance, procurement and HR profiles is tight, and we know that Generation Z tends to change jobs faster than their elders. And each early departure costs three times over: the severance or exit notice, the re-recruitment costs, and the replacement’s learning curve. Months during which the position runs at reduced capacity.
The real calculation is therefore this one: for junior to mid-level consultants, recruitment wins if the person stays long enough to amortise their entry costs.
Below a certain retention duration — specific to each configuration — the consultant was the better choice. But you only know that afterwards.
Our simulator lets you test several retention hypotheses and see where your own break-even point tips. You will thus be able to visualise the break-even: from how long does the employee cost less than the consultant?
An invisible cost: waiting
There is a cost absent from every consultant vs employee comparison: the opportunity cost of the vacant position during recruitment.
Recruiting a good finance, HR or procurement profile in Belgium takes several months: drafting the offer, sourcing, interviews, the candidate’s notice period at their current employer. During this time, the work does not get done, or gets done badly: a closing that falls behind, suppliers left unchallenged, an overloaded team growing tired, payroll errors, or decisions put off.
In such situations, many of our clients opt for a consultant who starts immediately and holds the position while permanent recruitment calmly runs its course.
In conclusion
In your precise configuration — function, seniority, working arrangement, duration, urgency — which way does the calculation lean? That is what our simulator lets you check, with your own figures, in five minutes.
And because the decision is not played out on the numbers alone, we will soon detail, in a complementary article, everything the calculator won’t tell you: speed of start-up, flexibility, the mix of skills, an outside perspective, de-risking your next recruitment. (Coming soon.)
Going further
Download the Consultant vs Employee simulator: the complete calculation tool, with the Belgian NSSO rates in force, the notice-period table and the breakdown of all the hidden costs. Enter your figures and get your comparison.
Talk to an Altesia partner: Book a 30-minute slot to review your situation, with no commitment, or send us your request.