The main difference between interim executives and management consultants is that the former not only advise and strategize, they also execute the plans that they create.
Execution is something management consultants do not do, hence the name consultant. Another difference between the two is that interim executives are normally paid on a daily rate, while management consultants are normally paid on an hourly rate. The exact cost of either are highly dependant on multiple factors which we will get into.
Expertise of interim executives
A major determining factor to the cost of both interim executives and management level is their experience level. A person who has been in the corporate world for decades will obviously charge a higher rate than someone who has little to no experience. You can estimate the hourly cost for a management consultant by dividing their potential salary as a full-time employee by the number of hours in a year.
For interim executives, you would basically do the same thing, except divide the salary by the number of days in a year. We can compare the two rates with an example. In a perfect world, you have both a management consultant and an interim executive, whom both have a projected yearly salary of $250,000. You want to find out the rates they may charge, so you do the math and find out that the management consultant may charge about $120/hour, while the interim executive may charge about $685/day.
These rates lead to the next factor which determines the cost between the two, length of hire.
Length of Hiring
Some companies may need either the management consultant or interim executive for 1 week, while others may need them for 3 months. Let’s use the same rates we created from the previous example, and say that your company needs either of the 2 for one week or 5 days. They would be working 45 hours in that week.
With some basic math, we find out that the management consultant would charge $5,400 with an hourly rate of $120/hour, while the interim executive would charge $3,425 with a daily rate of $685/day. In this case, the interim executive would be more cost effective since its the cheaper option.
The Company and What Needs to be Done
Another factor is the size of the company and the issue or project that needs to be dealt with. Logically, if you have a company that is extremely large and with multiple projects to deal with, the rate that would be charged by either an interim executive or management consultant would be considerably higher than if you have a company that is small and with one project on hand.
There isn’t one cookie cutter rate that can be given to determine whether an interim executive or management consultant is cheaper than the other. This is determined by some of the factors stated above, so it’s important to keep these in mind before you decide to hire one over the other. The major difference between the two is that an interim executive not only creates plans, but they will also execute those plans for you, while a management consultant will only create plans.