Consulting versus short-term jobs

Some people seem to confuse consulting engagements with temporary jobs. One of the key differences is whether a person is paid when there isn't any work to be assigned. In other words, consultants aren't paid when a project is put on hold, while employees are paid for their time regardless of whether an employer is fully utilizing them.

Consultants earn premium wages because they bear risk that is often internalized by employers. For example, most clients don't have a consistent need for the types of expertise that consultants offer. By engaging a consultant, companies only pay for what they use and aren't responsible for benefits like health insurance and sick days. If you want to be paid premium rates over what you would be paid as a short-term employee, you need to be willing to bear risks that employees don't.