#023: Working in Data as an Employee vs Consultant

You do not have to be a full time employee to work on a data team, and consulting or contracting is now a normal route into the work. The differences come down to four things. Employees are onboarded to a company while consultants are onboarded to a project, so one gets training and context and the other is expected to contribute almost immediately. Final decisions usually stay with the people who will maintain the system, which means the employees, even when a consultant is advising. Employees get a career ladder handed to them while consultants invent their own and let the market judge it. And a salary with withheld taxes and benefits behaves nothing like a set of rates you negotiate, bill and manage yourself.

One of my favorite things about working in data is that the work itself does not require a particular employment arrangement. I spent many years as an employee and, as of this recording in 2023, two years as an independent consultant. These are the four differences I notice most.

Difference 1: Onboarding to a company or to a project

The shortest way I can put it is this. Employees are onboarded to a company. Consultants are onboarded to a project.

As an employee, you are an investment for the long haul. The company rolls out the red carpet: formal training, time shadowing other people, the history of the business, the vision and values.

Consultants are treated more transactionally. That is not a criticism, it is just the dynamic. You are expected to already be skilled at the thing you were brought in for and ready to contribute almost immediately.

What to do with that

• If you are a consultant, be ready to get thrown into the fire. You will learn the context on the job, because there is rarely a ramp.
• If you are an employee, pick the brain of any consultant on your team. They have seen a handful of other companies and that perspective is hard to get any other way.

Difference 2: Who makes the final decisions

Consultants are usually brought in for their experience, but the final call tends to sit with the internal data team. That is reasonable. They are the ones living with the system after the engagement ends.

There are plenty of exceptions. Consultants are often heavily involved in advising, and depending on the arrangement they may be the decision maker.

The point is to know which situation you are in and act accordingly.

In practice this shows up in small ways. A naming convention you would not have chosen, a tool you think is the wrong fit, a modeling approach you would do differently.

Your job is to make the trade-offs visible, not to win. The team that owns the pipeline next year gets to weigh things you cannot see from the outside.

What to do with that

• If you are an employee, be mindful of the dynamic and respectful in how decisions get communicated back.
• If you are a consultant, do not take it personally when a recommendation is not adopted. Make the case, document the reasoning, and move on.

Difference 3: Who sets your career path

This one matters more than people expect, because it is about how comfortable you are with uncertainty.

The employee version

You get a reasonably clear path. Put in a few years, do good work, and you can picture becoming a senior, a lead or a staff engineer, whatever your company calls it.

There is a review cycle, a title structure, and someone whose job includes telling you how you are doing.

The consultant version

You set your own path. You pick your title, you decide what kind of work you take, and the marketplace decides whether that was a good call.

There is no annual review. Your performance signal is whether clients keep hiring you and whether you are still in business.

If you like knowing exactly how the next few years will go, that is a real struggle. Consulting runs on unknowns, and you are the one setting the tone.

The upside

Growth can be much faster. You are not waiting on a review cycle for a raise, because a new client at a better rate is a raise.

You also learn faster from the variety. More companies, more stacks, more problems, and no single culture you are tied to for years. Engagements usually have an end date, which some people read as a drawback and others as freedom.

What to do with that

• If you are an employee, never underestimate relationships. Whether you stay or go independent later, the people you worked well with are the most valuable thing you accumulate.
• If you are a consultant, do not neglect lead generation. Cold outreach on LinkedIn, job posts, content like videos or writing, something has to keep the pipeline moving.

Difference 4: How you get paid

Employees have salaries. Consultants have rates. Almost every money conversation flows from that one difference.

What a salary handles for you

A portion arrives every two weeks or every month. The company withholds taxes, contributes to benefits and retirement accounts, and absorbs a lot of administration you never see.

What a rate asks of you

You are in a near constant negotiation over rates, whether hourly, daily or per project. You set the number, you bill against the work, and nothing arrives automatically.

You also withhold and pay your own taxes on time, arrange your own benefits, and make sure you carry the right insurance.

This is the part that trips up most people considering the switch. Research it properly before you leap, and once you understand it, it is entirely manageable.

The honest comparison

All things being equal, in my experience you can make more money as a consultant. The caveat is that it is not as consistent or as smooth.

There are real ups and downs. If you are only looking at the top line number, consulting usually wins. If you are looking at predictability, employment usually wins.

It is worth comparing the two honestly rather than by headline rate. Unpaid gaps between engagements, your own benefits and time off all come out of the consulting number before it is yours.

What to do with that

• If you are an employee, ask for the raise. Saying nothing signals you are willing to do the work for the current number, and no company increases an expense it does not have to. Even a no puts you on the radar.
• If you are a consultant, get comfortable negotiating and saying no. You are better off waiting for a better engagement than getting antsy and locking yourself into the first one.

Related reading

• Working in Data as an Employee vs Consultant
• From Employee to Indy Data Engineer in 5 Steps
• 4 Ways to Make Money Working in Data
• What Skills Do You Need as a Data Engineer?

Final takeaway

Having worked both sides, I do not think one is better than the other, they just ask different things of you. Employment buys predictability, consulting buys variety and upside, and the flexibility to choose between them is one of the better perks of working in data.