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Transitioning to a Contracting Career

Blog
May 14, 2021
May 13, 2021
Among the constellation of options, contract consulting is a choice that suits many retirees. Understand how it differs from other choices.

As people approach retirement, they think about life after a full-time job. Some cannot wait to jettison the nine-to-five doldrums and embrace the next chapter in their life of travel, golf, skiing, gardening, or other passions. Others are not ready to go cold turkey and look for strategies to ease into retirement. Still, others enjoy the work, but not the office politics, and are eager to continue working in their own practice. And there are those who do not retire voluntarily and are looking to pivot a severance package into another installment of their ongoing career.

Among the constellation of options, contract consulting is a choice that suits many retirees. There are generally two types of consulting contracts – the extended job and the hired gun. An extended job is the proverbial employee who goes home on Friday and returns to work on Monday as a contracting consultant. The hired gun consultant roams from contract to contract and takes on interesting work as it comes available.

EXA engages many contract consultants that we call associates, who retired from employee life but enjoyed working too much to give it up. If you are thinking about contracting after retirement, or if the choice was not your own, you might consider a few factors before hanging out a consulting shingle.

Understand How Contract Consulting is Different

When people ask me the difference between a job and consulting, I explain work is like swimming in a river near a sewage discharge pipe. The water is polluted with office politics, and sometimes (often) while swimming, an employee can’t avoid bumping into the putrid clumps of office politics. Office politics can grow so thick you spend more time steering around, or through, the clusters of politics than the time you spend doing your actual job.

Consulting is like sitting atop a raft in the same river. The clumps of politics pass you by because, as a consultant, you are longer immersed in that stream. You do a good day’s work, and the stink of office politics doesn’t follow you home. That, I explain, is the difference between working as an employee and as a consultant.

A good friend of mine worked as the vice president of a defence company, and he asked me about becoming a consultant. I explained my metaphor about swimming and rafting. He nodded politely. I could tell he understood my words without grasping the meaning. Six months after he transitioned to a consultant, he told me no truer words were ever spoken. He was no longer swimming with the clumps of office politics. He was fitter, looked more energized, and was a ton happier.

On the downside, you are no longer part of the corporate community. Discussions and decisions you used to enjoy now pass you by as you sit on the safety of your raft. You become an observer. While the stink of office politics does not haunt you, you are no longer the person who charts the corporate path forward. Camaraderie also fades quickly. Some people find this loss of engagement challenging.

Incorporate a Company A Year Before you Leap

Sometimes people retire, and a year later, decide to start consulting. In Ottawa, where EXA operates, working on contract often requires security clearances. Many people do not realize your security clearances do not follow you – they stay with your former employer when you retire. If you do not transfer and maintain your security clearances, they will lapse.

If you let your security clearance lapse, you must start all over with a new application, which takes over a year to process. Controlled Goods (CG) registration has become more important than security clearances because industry clients demand CG registration more often than they require security clearances. Increasingly clients require CG registration as a condition of signing a contract, regardless of whether the work involves classified material.

CG registration is a parallel, redundant security clearance. Ostensibly, the GC program closes a gap Canada had with the USA's ITAR program, but it is just a duplicate security clearance from the industry's perspective. Public Services and Procurement Canada administers both security clearances as entirely separate and independent programs. Like security clearances, CG registration can take a year.

If you have a personal security clearance as an employee, you cannot keep it when you retire. You must transfer it to a company that already holds its facility security clearance. Your CG registration dies with your employment – you cannot transfer it. The good news is a company with CG registration can assess you and register you for CG in a matter of days.

Your new corporation must obtain a facility security clearance and CG registration before you can transfer your personal security clearance to your corporation and register yourself for CG. Intermediary companies, like EXA, used to hold your personal security clearance for contract consultants, but PSPC discourages that practice now. If you are thinking about retiring and working as a consultant, and if you might ever need your security clearance or controlled goods registration, then you need to start a company about a year before you retire to secure the required clearances.

Make a Plan Before you Retire

From my experience, people who know what they want to do are the happiest consultants. They take on assignments because they are fun and challenging. The money doesn’t hurt, but that is seldom the primary motivation among the retired consulting community.

Finding consulting business can be difficult. Even if your job before retirement was marketing, sales, or another occupation that generates many contacts, finding business can be difficult. Most people discover that running the business requires as much work as doing the consulting work. The allure of consulting can fade quickly.

One solution is to approach an intermediary company, such as EXA, to find work for you. The advantage is you concentrate on doing the work. The drawback is the intermediary company takes a share of your revenue. If the intermediary company is good, you will come to recognize the margin they collect as a worthy investment.

Here are a few things you should look for in an intermediary company:

  • Well regarded by people you trust;
  • Operates in a field you specialize in;
  • Does not demand exclusivity;
  • Has a code of ethics that it lives by; and
  • Simplifies your administrative overhead.

Decide in advance what kind of consulting you will do, when you will do it, and how much time and effort you are willing to invest in it. Set priorities and boundaries that respect your work-life balance. They will evolve over time, but you need that focus to accept or decline a consulting opportunity. If you choose to use an intermediary company, share your priorities and boundaries with them so they don't waste your time looking for opportunities you are not interested in.

Talk to People

Talk to colleagues you trust who made the shift to consulting. Ask them about their experiences. Ask them what they like and dislike about consulting. Ask them three things they wish they knew when they started consulting.

Shop around. Talk to different consulting companies. If possible, ask their clients about them.

Is EXA Right for You?

At EXA, we do not hire the best consultants. We hire the best of the best. If you are a top-notch professional in business capture, proposal development, cybersecurity, procurement, or related disciplines, and if you are thinking about transitioning to contract consulting in a year or two, we’d like to talk with you.

EXA has a Transitional Associate Program (TAP). It is a program designed for people approaching the twilight of their career. TAP is for professionals who are contemplating work after retirement but have not made any firm decisions. The TAP program is a discrete, confidential, information-rich program that helps you make informed decisions when the time comes to hand in your employee badge. There are no obligations, no commitments, and no deadlines. Just helpful information.

If you would like more information about the EXA TAP program, or about any other part of The EXA Consulting Group, send an email to:

info@exaconsulting.group.

EXA is Canada’s leading firm specializing in Capture and Proposal Leadership.

From small, strategic bids to programs over $100M, EXA leads pursuits of all sizes with 30 years of experience.

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