Because of corporate downsizing, retention problems, and the increasing gap between workload and staffing, organizations are becoming more focused on obtaining a high return on investment. In the past, it was the norm for organizations to contract with consultants on an hourly or daily rate. However, this practice often involves unexpected surprises that results in additional investment decisions and costs. Organizations are discovering that daily and hourly fee arrangements are not providing adequate value for expected outcomes. In contrast to hourly or daily rates, value-based fees and retainer contrast services are more likely to result in customer satisfaction and high return on investment.
Do you want a high return on investment (ROI) for consulting services?
Value-Based Fees. After researching various fee schedules, Behavioral Health Resources determined that the most effective fee arrangement for customers is the value-based fee structure (versus hourly or daily rates). The concept of value-based fees means that the fee is established collaboratively with the customer and is a mutually beneficial business arrangement.
An effective way to manage cost in an increasingly competitive business environment.
Value-based fees remove the uncertainty about cost and create incentives to increase productivity and reduce inefficiency. The emphasis of value-based fees is a significant shift away from “How much time?” to “What is the value and outcome?” This fee structure improves the way consulting services are provided with a focus on more desirable and predictable outcomes that add value for the customer. Specific benefits are described below:
- A cap on your investment. You know exactly what the fee is at the onset of consulting services. If additional resources are needed to complete the project, the consultant will employ staff with no increased cost to you. As conditions or funding change in your organization, you can be assured that the project will be completed as scheduled because the pre-determined fee (i.e., cap on the investment) had been paid in advance. Information can be provided to leadership and governance that the project will not exceed the pre-determined investment and that the expected return justifies the budget. (Payment of 50% of the fee is required at the time the Consulting Agreement is signed and the remainder is due within 30 days.)
- No need to make an investment decision every time you contact the CARF consultant. With value-based fees, a single investment decision is made at the time of the proposal (i.e., not a new investment decision every time you contact the consultant). This eliminates the concern about how much each contact with the consultant is going to cost (i.e., hourly fee). With value-based fees, you won’t need to determine if this is a $100 phone call, a $500 on-site visit, or if you should make the decision yourself. Value-based fees are a simple way to work together and emphasize the result (vs. time spent).
- Easy access. The CARF consultant is available to assist your staff as needed without the requirement to obtain budgetary approval from you for each contact. The outcome is improved efficiency, productivity, and morale. (The staff who are authorized to contact the consultant directly will have been identified by you in advance.)
- Unlimited access. You and authorized staff can contact the CARF consultant as often as needed regarding the assigned project without concern about further cost. If additional work is identified by your and/or the consultant that is directly related to the project, the consultant can perform this unanticipated work without more cost to you. (If the additional work is not directly related to the assigned project, this will be discussed with you and options provided upon request for a new Consulting Agreement.)
We focus on shared values, commitment, accountability, and success.