4 ms·

With labor becoming fungible in the eyes of c-suites, the holders of institutional knowledge are the libraries of the consulting firms. Consulting firms also ha

With labor becoming fungible in the eyes of c-suites, the holders of institutional knowledge are the libraries of the consulting firms. Consulting firms also have tech talent that traditional businesses had no access to in the past, so any large scale data driven related project is done with consultants. However: 1. The costs are insane and probably we reached the point where the benefits do not justify the prices they are charging. 2. Wfh is a cheat code to get access to cheap tech personnel that is pissed with the RTO of big tech. I keep hearing tech folks working at traditional manufacturing shops remotely these days.

candiddevmike 2y ago
The economics of consulting are pretty raw: they basically arbitrage the hourly rate of folks. They pay you X and then bill you for X*1.3 (minimum). Folks are starting to realize they could just go direct to the customer, and the recent non-compete uncertainty has made a dent in the quality of talent these places have on their bench. Not to mention most of the talent at these shops are just window dressing for cheap offshore labor that actually does the work with mixed results.
- whatever1 2y ago
  More likely they pay you X and they charge 3X, but yes I agree.
- jncfhnb 2y ago
  I’m pretty sure my average multiple is 6x
  - FredPret 2y ago
    3x is standard, you should push for a 2x raise. You might have to jump ship twice to do that
sevensor 2y ago
This is a surprising take, considering the consultants I’ve worked with never took the trouble to learn anything about the business despite sitting shoulder to shoulder with us for weeks, and then proceeded to give us spectacularly terrible technical advice. “You need machine learning for this. Trust us, we’ve done this before.” They hadn’t, and it became clear they’d wasted our time and hadn’t listened to a word we said.
- whatever1 2y ago
  There is nobody left, old enough, to remember that the last project with that consulting firm failed.
  - jumping_frog 2y ago
    Are we living in middle ages that electronic records don't exist of what happened in the past engagement. Maybe one can locate the last McKinsey dossier on OneDrive? The problem is and always was of incentives of people involved.
    - Scalestein 2y ago
      Generally there Firms prize "first principles" thinking and don't put a ton of effort into leveraging previous engagements. Think of it like how engineers will throw out a solution and rebuild it rather than understand and build upon it. It is also quite difficult to surface useful information amongst all the noise in the giant archive of documents
      - throw4950sh06 2y ago
        Oh no, that's not true at all. They care about data, and they will actually tell you themselves that they already did it for you - right after convincing you that you need to do it again.
    - whatever1 2y ago
      Would you trust a random soggy doc for which you don't know the person who wrote it and their competence, or the flashy deck from McKinsey? The answer is 99% of the times: McKinsey. Only time that answer is different is when a person in power is still around and they pretty much veto the engagement with a consulting company.
watwut 2y ago
I have yet to see big consultant company to improve things on technical levels. They are great at talking to upper levels of management and avoiding accountability for results. They don't improve how things run.
nothercastle 2y ago
Traditional mfg companies don’t understand tech. They don’t like that tech employees demand higher wages and benefits and hire bottom tier talent or try to convert existing non tech employees into programmers.
- whatever1 2y ago
  Which kinda makes sense. The work of an SWE at big tech can bring in a ton of cash due to (almost) infinite scaling of software and (almost) zero marginal cost. But as an SWE at a manufacturing company, how much can your work increase their revenue/profit? The bulk of their income is still coming from the widget/commodity they are producing.
  - throw4950sh06 2y ago
    I mostly agree, but for sake of honest discussion... Why are the mechanical/electrical engineers also not paid well at these companies? Even at these companies capable of achieving massive scale with new products they design. Think something like 3M, making billions of units of widgets and commodities.
    - whatever1 2y ago
      Depending on their profit margins and the talent scarcity they do pay. A seasoned cheme at oil and gas was easily pulling 300k + 2M pension + 10% 401k match
      - nothercastle 2y ago
        Lives on an oil rig doing to get that
    - nothercastle 2y ago
      It’s not marginal utility it’s supply vs demand. The reason SWEs can demand so much is because there are a lot of options to branch out solo or small company so companies need to pay competitive wages. The employees are therefore able to capture more of their value. For chemical or mechanical engineers they need a lot of infrastructure to do work so employees are more locked to employers and wages are not as competitive. Employees are unable to capture their value without the employer therefore they get a smaller piece. Also SV has an obsession with hiring the best while most large manufacturers consider heads interchangeable with only a few spots reserved for top talent.

candiddevmike 2y ago

The economics of consulting are pretty raw: they basically arbitrage the hourly rate of folks. They pay you X and then bill you for X*1.3 (minimum). Folks are starting to realize they could just go direct to the customer, and the recent non-compete uncertainty has made a dent in the quality of talent these places have on their bench. Not to mention most of the talent at these shops are just window dressing for cheap offshore labor that actually does the work with mixed results.

whatever1 2y ago
More likely they pay you X and they charge 3X, but yes I agree.
jncfhnb 2y ago
I’m pretty sure my average multiple is 6x
- FredPret 2y ago
  3x is standard, you should push for a 2x raise. You might have to jump ship twice to do that

sevensor 2y ago

This is a surprising take, considering the consultants I’ve worked with never took the trouble to learn anything about the business despite sitting shoulder to shoulder with us for weeks, and then proceeded to give us spectacularly terrible technical advice. “You need machine learning for this. Trust us, we’ve done this before.” They hadn’t, and it became clear they’d wasted our time and hadn’t listened to a word we said.

whatever1 2y ago
There is nobody left, old enough, to remember that the last project with that consulting firm failed.
- jumping_frog 2y ago
  Are we living in middle ages that electronic records don't exist of what happened in the past engagement. Maybe one can locate the last McKinsey dossier on OneDrive? The problem is and always was of incentives of people involved.
  - Scalestein 2y ago
    Generally there Firms prize "first principles" thinking and don't put a ton of effort into leveraging previous engagements. Think of it like how engineers will throw out a solution and rebuild it rather than understand and build upon it. It is also quite difficult to surface useful information amongst all the noise in the giant archive of documents
    - throw4950sh06 2y ago
      Oh no, that's not true at all. They care about data, and they will actually tell you themselves that they already did it for you - right after convincing you that you need to do it again.
  - whatever1 2y ago
    Would you trust a random soggy doc for which you don't know the person who wrote it and their competence, or the flashy deck from McKinsey? The answer is 99% of the times: McKinsey. Only time that answer is different is when a person in power is still around and they pretty much veto the engagement with a consulting company.

watwut 2y ago

I have yet to see big consultant company to improve things on technical levels. They are great at talking to upper levels of management and avoiding accountability for results. They don't improve how things run.

nothercastle 2y ago

Traditional mfg companies don’t understand tech. They don’t like that tech employees demand higher wages and benefits and hire bottom tier talent or try to convert existing non tech employees into programmers.

whatever1 2y ago
Which kinda makes sense. The work of an SWE at big tech can bring in a ton of cash due to (almost) infinite scaling of software and (almost) zero marginal cost. But as an SWE at a manufacturing company, how much can your work increase their revenue/profit? The bulk of their income is still coming from the widget/commodity they are producing.
- throw4950sh06 2y ago
  I mostly agree, but for sake of honest discussion... Why are the mechanical/electrical engineers also not paid well at these companies? Even at these companies capable of achieving massive scale with new products they design. Think something like 3M, making billions of units of widgets and commodities.
  - whatever1 2y ago
    Depending on their profit margins and the talent scarcity they do pay. A seasoned cheme at oil and gas was easily pulling 300k + 2M pension + 10% 401k match
    - nothercastle 2y ago
      Lives on an oil rig doing to get that
  - nothercastle 2y ago
    It’s not marginal utility it’s supply vs demand. The reason SWEs can demand so much is because there are a lot of options to branch out solo or small company so companies need to pay competitive wages. The employees are therefore able to capture more of their value. For chemical or mechanical engineers they need a lot of infrastructure to do work so employees are more locked to employers and wages are not as competitive. Employees are unable to capture their value without the employer therefore they get a smaller piece. Also SV has an obsession with hiring the best while most large manufacturers consider heads interchangeable with only a few spots reserved for top talent.