Independent management consultants are highly satisfied with their job, finds a study by Eden McCallum, The Financial Times, London Business School and INSEAD. And while consultants that previously worked at top consultancies miss, among other things, the steadiness of their financial benefits, over half of those that freelance in fact make more money as an independent, with consultants under the age of 40 leading the pack.
The study, which involved 251 independent management consulting professionals active in Europe as well as a smaller sample of their employed peers, finds that the vast majority of independent advisers enjoys high levels of satisfaction – in terms of both the control they have over their lives and the value they deliver to clients. 91% of the participants surveyed said that they are satisfied with working as an independent consultant, of which more than half (53%) are highly satisfied. Just 5% indicated they are dissatisfied.
The most important reason cited for high satisfaction is the intellectual challenge of the work – a dimension that is also regarded as the most important aspect for job satisfaction. In second place follow two aspects that differentiate working at a consulting firm from working as an independent: the ability to choose the type of work (clients, projects) and the location of the engagement. At traditional consulting firms, in particular when project pipelines are not full, consultants can be staffed on engagements that they would rather not work on, or be pushed into residing in locations that are at the bottom of their wish list.
A former consultant at A.T. Kearney told Consultancy.uk about how, years back, he was directed to working in Saudi Arabia for over six months “because at the time, there were no other staffing alternatives”, while another adviser, a former McKinsey & Company consultant, recalls how she spent months in Kazakhstan and Uzbekistan, working in remote areas for an oil & gas client. Needless to say, despite the strategic challenge, this was not her first choice.
More freedom in project and location
The survey shows that independent consultants highly value the freedom they experience in having a firm say in what they do and where and when they can do so. Other factors that come out high on the job satisfaction list are being able to enjoy a better work-life balance – hours at the top tier firms typically range between 55 and up to 70 hours per week around deadlines – and in its slipstream the time available to work on new ideas or other interests. “Independent consultants find their work intellectually stimulating and enjoy the freedom to choose which clients they work with, on which topics, and when”, says Dena McCallum, co-founder of Eden McCallum.
Among the factors that enjoy the least satisfaction are, not surprisingly, employment benefits and financial security. The participants highlight however, that it is not the height of their income but more its steady flow that may bring rise to concern. In fact, the jump across borders commonly bolsters their income. Over three quarters of independent consultants say they make more or similar money, compared with when they were employed, with half saying they make more. Young independents (<40 years old) are doing particularly well: 67% earn more than when they were at a traditional firm.
“Although it does add uncertainty to earnings, the added flexibility for independent consultants in practice does not come with a financial sacrifice for most”, says McCallum. On average, surveyed consultants are billing 139 days per year – well above the numbers seen during the crisis years and those in its aftermath.
Other areas which are the least enjoyed – none of the factors surveyed were earmarked as dissatisfiers – are the inability to follow a more tangible career path, the reduced capacity to be part of a team or contribute to society, and a lower status, at least in the eyes of others. Interestingly, other than the latter, there were no significant differences in levels of satisfaction between independent and employed consultants. While working at the likes of McKinsey, BCG or Bain & Company can buy credibility and propel consultants into boardroom projects, when freelancing, independent consultants typically have to put more effort into opening doors towards the most prestigious engagements, said a former BCG consultant who now works as a freelancer.
“One of the things our consultants enjoy most about working on our projects is that the issues we address are often for bigger companies and at a more senior level than they can usually access on their own,” notes Helen Williams, who runs the Consultant Team at Eden McCallum.
More value for money
Interestingly, independent consultants see the freelancing model as a win for clients too, believing their work provides better value for money, has greater impact and is more likely to be implemented, compared to the work they did while at a traditional firm. “Over nine in ten say the value for money for clients is higher now than when they were in a traditional firm, and two-thirds say the projects have more impact and are more likely to be implemented”, explains McCallum. They also say that they are motivated in their work and that they are able to operate more efficiently, as they don’t carry the burden of all kinds of politics and guidelines that may play when staffed through a consulting firm.
Looking ahead, over half of the surveyed independent consultants expect to continue working as a freelancer for more than the next three years, indicating it is a career choice rather than a transitional move. There are however significant differences visible between men and women. While only 13% of women say they would go back to a big corporate job, nearly one third of men would consider that option. This may be related to the pay gap: the survey found that women earned two-thirds of the level of men in their last corporate job before becoming independent and yet are earning a similar day rate once independent. To the extent they leave independent consulting, women are more inclined than men to join a startup/small company or take a career break.
Reflecting on the survey’s results, McCallum acknowledges that while the picture painted of working as an independent is positive (“independent consultants see their career move as a real win-win”), being a freelancer doesn’t work for everyone. “Being an independent consultant is a fabulous choice for many, but for some, those without the relevant experience or without an entrepreneurial mindset, making the move could be a risky choice. Some will prefer life inside a big firm, with the financial security this brings.”