Booming independent consultants buck gig-economy trends

05 June 2017 Consultancy.uk

New research from independent professional services network Odgers Connect has found that the majority of freelance consultants have no intent to return to full-time employment. The study comes after the Office for National Statistics cited the growing gig-economy as the primary driver for falling unemployment, which hit a 42-year low in May 2017, unlike other freelancer fields however, consulting professionals remain well-paid.

Odgers Connect (OC) – a division of global executive search firm Odgers Berndtson, sources independent consultants for private and public sector organisations – polled over 400 professional service freelancers. Researchers at the firm then analysed the feedback, along with anecdotal input from clients across the wider firm from the preceding 18 months, to build a cohesive picture of demand in the industry that also linked to current pressures, ranging from finding new markets to dealing with Brexit.

According to the document, rising economic and political pressures are fuelling demand from both private and public sector organisations for independent professionals, as companies seek lower cost out-sourced expertise to help their companies strategise in a continuously turbulent financial epoch.

The need to find new opportunities for growth was named as a key factor driving companies demands for seeking consultants, with 91% of those surveyed stating it brought them clients, followed by the need to address digital transformation (88%), anxiety over Brexit (80%) and economic slowdown (82%) are also major concerns.

Importance of external factors in driving client work

According to the freelancers polled, the key driver for demand was the need to exploit new digital opportunities – with 29% of those questioned believing helping businesses best utilise and plan for new technology was extremely important for the future – compared to a lower 10% regarding Brexit, the effects of which while uncertain, seem to be considered less of an upheaval than the forecast realignment in employment relations caused by automisation.

Going Solo

When probing the sample of over 400 professional freelancers to think about their reasons for leaving traditional employment meanwhile, the paper shows that the vast majority of consultants had chosen to work independently primarily to gain greater control of their professional lives, with 74% of respondents stating it as their motivation for working independently.

Reasons to work as an independent consultant

Surprisingly, financial reasons were not among them most important motivations behind the career choice, with around a third of those interviewed saying it was partly behind their decision to go freelance – in spite of this segment of professional consultancy workers being typically well paid.

The report also notes a striking number of consultants for whom independent careers occurred seemingly by accident. 32% said their independent careers had “just happened” – however, having experienced the benefits of working independently the vast majority would prefer to continue rather than return to full employment.

Five Year Plan

Furthering this, researchers found that 61% of the independents intended to continue such work in the coming five to ten years. 16% of those polled stated plans to be run their own businesses within the same time-frame, while a minority planned to move back into full employment or scale back – suggesting continued contentment with the decision to opt for a gig-economy role over traditional employment.

Commenting on the release of the report, Managing Partner of Odgers Connect Chris Preston said, “Economic challenges looming over both the private and public sector are boosting already rapid growth at the top of the professional gig economy, where independent consultants are in the frontline of a quiet revolution in the workplace.”

Where do you see yourself professionally in five years time

The move toward independent work over permanent positions within the consulting industry is consistent with a trend across UK employment as a whole. The national unemployment rate in the period between January and March was reported as having fallen unexpectedly to a 42-year low of 4.6%, according to the Office for National Statistics – in a shift that correlates with a huge boom in freelance employment.

Analysis by the Resolution Foundation meanwhile showed that wages were still £16 a week below their 2008 peak – and with inflation running at 2.3% in the same period, that meant real-terms pay lagged by 0.2% in the first three months of the year, the first fall since the third quarter of 2014.

However, along with Odgers Connect’s findings, a joint study in 2016 from Eden McCallum, The Financial Times, London Business School and INSEAD further suggested professional services workers buck this trend. That particular paper also found that over half of new freelancers actually earned more money as an independent, with consultants under the age of 40 leading the pack.

The study, which involved 251 independent management professionals active in Europe, also confirmed that 91% of freelancers were satisfied with working as an independent consultants, while more than half (53%) were highly satisfied. Just 5% indicated they were dissatisfied.

Related: Independent consultants form opportunity for wider consulting industry.

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