Freelance consultants satisfied with career, but concerned by falling fees

17 October 2017 Consultancy.uk

Almost nine in every ten freelance consultants in the Netherlands are satisfied with their choice of self-employment. Freelancers are satisfied with both the challenges presented by their work, and with their income – but are apprehensive about the potential for falling fees amid a competitive market. 

According to data taken from the Consulting Salary Survey 2017, a large majority of Dutch freelance advisors rate autonomy (73%) and flexibility (56%) as the main reasons for becoming independents in the consulting industry.  Freelancers also said that ensuring a better work/life balance, and ensuring that their specialisms were properly utilised, were the joint-third most important factor behind their move to independence, at 40% each. The investigation – performed by Consultancy.nl and organisational consultancy Berenschot – saw a sample of more than 700 consultants across the Netherlands surveyed on their compensation and working conditions.

Freelancers were generally upbeat about their career choice meanwhile, despite leaving the relative security of salaried life. Almost nine in ten (88%) of independent advisors said they were content to some extent, with 49% of those stating they were “very satisfied”, and 39% saying they were “satisfied” with life as their own boss. Three quarters of respondents also indicated that they had no intention of returning to a full-time employment at a consulting firm. Freelancers who are considering making a return say they do so chiefly because they miss working in a team, or because it would enable them to work on larger and more complex projects.

Dutch independents are satisfied outside mainstream consulting

Freelance consultants also spoke highly of their income, on average. 78% of them indicated that their income as an independent was good, while only 5% said they were dissatisfied with earnings. The average hourly rate of the consultants surveyed – from a group averaging thirteen years of experience in the consultancy, of which seven years are employed by an advisory office – amounted to €111 per hour.

A quarter of advisors have seen their hourly rate increase over the past twelve months, compared to 10% of those who now have to take lower pay. Despite the rapid rise of digital providers and matching platforms, 80% of the acquisition is still through traditional channels. In addition, about a quarter of the advisors are affiliated with an advisory firm.

The responses mirror the sentiment seen among the UK independent consulting sector. A survey last year by Eden McCallum, The Financial Times, London Business School and INSEA found that 53% of freelancers were “very satisfied”, while a further 38% were “somewhat satisfied” with their choice to take to the independent scene. One of the UK sector’s chief reasons for going it alone was the work/life balance conundrum –something that working for themselves had helped consultants exponentially improve. Speaking at the time, one former consultant from 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, recalled how she spent months in Kazakhstan and Uzbekistan, working in remote areas for an oil & gas client.

Positive prospect

Dutch freelancers were optimistic for the next twelve months, with the Dutch consulting market in ascendancy, along with the Benelux region, which broke the €2 billion barrier for the first time last year. While that market is projected to grow by a further 3% over the coming year, 46% of freelancers expect that the number of commands in the freelance advisory market will similarly increase, and 40% predicting that demand will at least remain the same. However, their thoughts on tariff development paint a different picture. While two thirds expect the level of fees to stabilise, one third of respondents expect a decrease in hourly rates.

Dutch independents expect fees to decrease

According to Larry Zeenny, researcher at Consultancy.nl, this difference is rooted in the dynamics in the Dutch interim market, "The number of independent consultants in the Netherlands has seen explosive growth in recent years, so clients can buy sharper. At the same time, there has been a trend for years for customers to be critical of the value they receive from external advice and support. What is more important is that in the current time of busy project portfolios, the average duration of assignments increases. Independent advisors are therefore willing to accept a lower hourly rate."

This is a different situation from the larger UK market, where over three quarters of independent consultants state that they make more or similar money, compared to when they were employed. While 50% say they make more, young independents in Britain (<40 years old) were said to be doing particularly well, with that figure rising to 67%. While British independents also face scrutiny, with UK small and mid-sized enterprises reportedly seeing as much as £12 billion a year wasted on external expertise, the UK’s larger market size – the second largest in the world behind the US – means the booming independent industry does not seem to have become over-saturated, or led to a reduction in fees for the sake of competition.

Related: VW, Volvo and Renault most popular lease cars among consultants.

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