6 Great Advantages of the Gig Economy That Will Affect the Future of Independent Consultants
“The gig economy is empowerment. This new business paradigm empowers individuals to better shape their own destiny and leverage their existing assets to their benefit.” – John McAfee
Whether you are a fan of the Gig economy or not so much, these trends are here to stay. There are a number of reasons to embrace the Gig economy mainly for the freedom and flexibility it brings to both Clients and Contractors, but there are also downsides to it, such as ethics or regulation issues.
Let’s take a closer look at the Consulting industry.
Disruptions in the Consulting Value Chain are creating interesting new opportunities.
One of the more notable changes due to disruption in the Consulting value chain today is the demand for very specialized expertise. And when such talent and resources are not available at the right location or at the right time, Clients are eager to hire talent per project basis.
Know the Consulting Category
If we merely follow the projections provided by economists, we should see a significant shift in the balance of power by 2025 in the global market. How does that impact the Consulting Industry? What does the market look like in North America?
The freelance platforms offer plenty of choices, in addition to new partnerships forged between firms that would not have collaborated in the past, are now more willing to share risks and benefits.
The Gig economy has opened a completely new set of substitutes to traditional players. They can be clustered into four categories: Professors, Platforms, Integrators, and Networks.
If you are familiar with the genesis of consulting boutiques, you have probably noticed that a significant number of them were created by famous academic professors:
- Michael Porter created Monitor
- John Kotter creator the Kotter Inc.
- David Nadler created the Delta Consulting Group
- Clayton Christensen created Innosight
- Dr Michael Watkins created Genesis
The pattern here is quite simple, professors are teaching executives, executives want to get support on their projects, and professors create consulting boutiques to offer consulting services. Today, with or without a dedicated consulting boutique in their name most MBA professors are also offering freelance consulting services to support the executive population wishing to benefit from their expertise on specific projects.
6 Great Advantages of the Gig Economy and the Future for Independent Consultants –
- Growing Number of Independent Workers –
According to McKinsey, independent workers now make up to 30% of the working population in the US and EU, or approximately 162 million people. For better or worse, innovation and flexibility also come with a “price tag” of a certain amount of instability, legal and financial security as well, in general. But we should differentiate between the two main groups of freelance workers: the lower-end (such as Uber drivers, TaskRabbit workers, and various other Contractors) and at the higher-end of the spectrum, or Gig consultants, who are offering niche expertise and are redefining today’s role of consultants. Consulting clients are slowly adopting this new model but the disruption will only grow over time on specific niche consulting projects.
- Prospects for the Gig Consultant –
When PwC launched its “PwC Talent Exchange” initiative in 2016, they boosted the legitimacy of Independent consulting. The online work intermediation platform finds independent professionals with relevant expertise and hires them on internal PwC projects. It was also a strong sign that the traditional consulting model of keeping a permanent talent, was changing. The biggest drive for such change where the firm’s clients and their evolving needs for more specialized skills. With time, we might see other big firms creating similar initiatives. Consulting Quest launched in 2018 a teambuilder to give access for consulting firms that do not have the critical mass of a big 4 to a vetted population of experienced consultants as team members.
- Higher Incomes –
According to a McKinsey report (from 2016) 75% of surveyed Gig consultants were making more or the same amount of money than they did in their previous traditional roles. That proves that flexibility and independence don’t mean working for a lower paycheck. Great example include consulting platforms such as Go Catalant, CoMatch, Talmix, Business Talent Group, where thousands of professionals, users of the platform can charge very fair rates. For the clients this does not rhyme with higher fees as you can remove the cost of expensive offices in central Manhattan or the 8th arrondissement in Paris and the 30% returns expected by the shareholders.
- New Opportunity for the Aging Workforce –
Baby Boomers’ generation looking towards retirement might find great opportunities in the new Gig Consulting economy as well. Many experienced professionals are putting their decades of knowledge into good use today by being hired as advisors. This can also benefit clients looking for experience rather than the schoolbus from major consultancies. Think about Robert de Niro in the intern and skip the question about career expectations during the interview.
- Digital Freelance Platforms Make Hiring Easy –
The most visible development in recent years has been the blossoming of dozens of marketplaces proposing access consulting services. We have identified 40 different marketplaces ranging from horizontal marketplaces offering all kinds of services, to vertical ones with a specific focus on consulting. They provide access to a very large pool of independent consultants distributed across the globe. Those resources can be perfect for small to medium size projects or interim assignments to reinforce teams during periods with peaks in activity. An intriguing alternative to large consultancies, those marketplaces in recent years have raised millions of dollars from venture funds. Interesting to note that even when Clients need a team combining several competencies distributed across the globe, a company like A-connect have that covered. They act as integrators, helping you, leverage their network of freelance consultants to select a team that will have all the competencies you need and to organizes them as an integrated team.
- Global Network of Consultants –
An alternative to freelance marketplaces and integrators is the utilization of Global Networks of Consultants. Those Networked consultancies like Eden McCallum, 2PS or ICG, have been created with three ideas in mind directly addressing the limitations of the independent consultant model:
- Ability to work “a la carte”: flexibility in the organization of their workload and focus on projects they are interested in
- Possibility to be part of a team reducing the feeling of isolation that can be daunting when you are alone in your solo consulting practice and connecting you with people of similar interests
- Access to a brand that will increase customers confidence and provide a flow of inbound opportunities
For clients those networked organizations provide a greater confidence in the quality of the consultants as they perform a continuous assessment of their members.Clients today have an abundance of opportunities to source talent, expertise, and offerings tailored to their specific needs and situations. As these models are still evolving, pivoting and progressively finding their way, we can look at the key elements that make them a great proposition.
If you are considering hiring or trying to get hired, and need our assistance, please contact us at your earliest convenience.
We will be happy to find the best solution in your particular situation.