UK's gig economy can learn from US' more mature freelancing market

08 October 2018 Consultancy.uk

The UK currently has  5 million self-employed people, of which around 2 million are freelancers – also known as gig economy workers. Pat Lynes, CEO of Sullivan and Stanley, reflects on what the UK’s gig economy could learn from the more mature freelancing market of the US.

According to the McKinsey Global Institute (the research arm of McKinsey & Company), there are around 162 million people in Europe and the United States who are part of the independent workforce. The UK makes up five million of this total number, with 4.4% of the population working in the gig economy in 2017. At present, the gig economy is a rapidly developing part of the UK’s market, with data from the Office of National Statistics showing that the share of freelancers within the labour force has grown from 12% in 2001 to 15% last year

The UK is however still learning how to embrace this business model. In the ‘old ways’ of working the knowledge gig economy was seen as a necessary evil in filling a gap and/or a need, with businesses segregating the freelancer workforce with its seating plans, different coloured badges and even email addresses. Nowadays, this perception is slowly starting to change, with big businesses who want to make that step into the future of work understanding the benefits that access to a wider pool of talent can offer. As a result, the popularity for ‘knowledge workers’ is drastically increasing.

Number of gig economy workers in the UK

But, to fully utilise and benefit from interim workers skills and knowledge, UK businesses need to start celebrating and embracing this workforce as valuable and key members of their teams and prepare their organisations for a faster turnaround of talent, regardless of how they are engaged or paid. To this end, the UK can learn from the globe’s largest economy and freelancing country, the United States. 

America’s gig economy

In the US, it is estimated that 57.3 million Americans are freelancing, which is 36% of its workforce, contributing approximately $1.4 trillion annually to the economy. In 2005, the US Bureau of Labor Statistics estimated that the freelancer space only accounted for 10% of US employment, which is a remarkably rapid level of growth. One of the reasons for this growth is progressive US employment laws, which allows the gig economy to thrive and the workforce to be more fluid. The UK on the other hand, is somewhat staid with its approach and is ignoring the fact that people want to work in a different way, with more variety. For the UK to keep up with the US, the government needs to be more progressive in this space and work closely with business leaders and consultants to lead this revolution.

Another key driver and advocate is America’s global technology hub Silicon Valley. This evolutionary industry space, not only embraces and drives the gig economy model, but also embraces the fast movement of the tech landscape. With such rapid industry movement comes the need for fast movement of talent. This is crucial for businesses to prosper and the gig economy allows for this to happen, bringing in top level professionals who can offer industry guidance without any commitment, at the pace of the company needs. US companies see themselves as tech leaders, while in contrast the UK is still playing catch-up. Despite the fact that technology dominates the top ten trends of UK executives, with currently only 1.6% of the FTSE 250 executive teams having a technology background, it is no surprise that the UK is behind. 

As all businesses in this day and age should consider themselves as technology companies – digital is the main driver of innovation – the UK should address the technology-leadership gap. According to a report from Tech Nation in collaboration with EY, the UK’s technology sector valued at £180 billion still lags market leaders US and China, in particular in the fields of performance, the availability of talent and funding opportunities. While London is at the forefront of the sector’s bullish performance and is well positioned, significant investment into building tech hubs across the country is required for the UK to muscle its way into the global elite in the landscape. 

Drivers of freelancing in the UK

Overall the US is leading the way and is giving inspiration to the rest of the world on how to drive and engage the gig economy, with the UK, across the board, not too far behind. However this doesn’t mean that the US has successfully embraced and achieved this business model as a whole. Also in the US, too many businesses remain stuck in the ‘old world’ and need to realise that the game has now changed from ownership to access of talent. 

The gig economy is an inevitable step for businesses to be agile in order to keep up with an ever-evolving market, using the mutually beneficial outcomes of freelancers for both workers and employers alike. Not only is the gig economy allowing businesses to bring in top level professionals who can offer industry guidance without any commitment, it also gives workers choice and freedom.

Related: Why the economy is shifting towards the freelance and gig world

Pat Lynes is a business transformation expert and author of The Interim Revolution. Sullivan and Stanley is a network of change agents and consultants.

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New ‘open consultancy’ Riverflex racks up eight clients and 300 consultants

16 April 2019 Consultancy.uk

Digital consultancy firm Riverflex is celebrating a successful first year of business, following its launch in 2018. As the freelance consulting market continues to boom, the independent model–based conultancy has expanded to more than 300 members, working with eight corporate clients on projects like the Samsung store innovation drive. Co-founders Victor Hoong and André Azadehdel spoke with Consultancy.uk to explore what the future holds for Riverflex.

The freelance consulting sector of Europe is experiencing a period of rapid expansion, as former employees turn their backs on life at firms, amid the allure of a better work-life balance and the suggestion of better pay. According to Consultancy.uk analysis based on the latest figures from the Office for National Statistics (ONS) and the Association of Independent Professionals and the Self-Employed (IPSE), the UK’s industry alone contains a labour pool of around 5 million people (or around 15% of the workforce), having increased from 3.3 million (12% of the workforce) in 2001.

With this state of play pressuring businesses to find value-delivering consultants, the need to match demand between businesses and freelance consultants has boomed. As a result, a growing number of firms looking to support businesses in that process have arisen. This includes platforms such as Nordic company Worksome and Berlin-based Comatch, which both entered the UK market in 2018. Financial services–focused Outsized also recently enjoyed a bullish UK debut.

With digital transformation currently one of the fastest growing areas in consultancy – accounting for more than $44 billion in annual revenues – there is also a large area to be filled by specialism within the market. With 80% of respondents to a recent Management Consultancies Association poll indicating that that technological and digital disruption pose a significant threat to businesses in the coming years, there is a significant opportunity for a firm which links client demand for digital skills to freelance consultants with the relevant experience and know-how.

Fast-growing Riverflex builds community of 300 consultants in first year

Riverflex arrives

Another new entrant in the digital consulting space is Riverflex, which celebrated its first anniversary at the end of March. Riverflex sells and delivers consulting projects, but with an independent model, catering to the demand for digital skillsets, lean teams, flexibility, and experienced industry hands. The start-up was launched by Victor Hoong and Andre Azadehdel in 2018, with the former Deloitte Consulting duo looking to close the gap between client needs and traditional consulting solutions, providing an alternative option to the Big Four and MBB firms for clients and consultants alike.

Speaking with Consultancy.uk, the duo commented on the need for consulting to change. Amid huge changes across nearly all industries, they see consulting being done the same way, more than a century after its first firms were founded. For this reason they decided to establish Riverflex – an ‘open consulting firm’ consisting of high quality vetted independent professionals and small partners. In this model, professionals can join from tier one consultancies, top agencies or industry blue-chips to deliver top consulting projects.

“Digital is transforming companies at a faster pace than ever, and business needs are evolving too," Victor Hoong said. "We dreamt of a top consultancy that could match these needs, and deliver real impact; a consultancy with digital in its DNA. Connecting teams of top independent talent from the best consulting firms and industry leading companies, and enabling them to do what they love: creating real value based on true expertise.”

Andre Azadehdel further elaborated: “The definition of insanity is doing the same thing over and over and expecting different results. Victor and I have worked in consulting since the turn of the century, helping businesses become better. We love this work. Helping others deliver hard business results is rewarding, challenging and exciting. But we also saw that the gap between client needs and traditional consulting outcomes is too far apart.”

Since its launch, Riverflex has worked to set itself out as unique along four essential pillars of business. Central to the company is a willingness to foster innovation and work towards providing excellence. With businesses increasingly being convinced of the business case for diversity, Riverflex also hosts a network with a multitude of viewpoints and backgrounds, focusing on helping its members to grow in terms of professionalism, and as individuals.

“The independent model has become a rational choice for top talent. Abandoning old ways of working to take on rewarding projects and shape one’s own career path.”
– Andre Azadehdel, Riverflex co-founder

First year

In the last year a number of key steps have therefore been made. The organisation has grown into both the UK and the Netherlands, and is currently working with eight corporate clients. Meanwhile, over 300 consultants have joined Riverflex, which now boasts a huge amount of experience at top tier consultancies such as Bain & Company, McKinsey & Company, Boston Consulting Group, advertising agencies like Jellyfish, AKQA, Deloitte Digital, WPP and Publicis, and tech companies such as eBay, made.com, asos.com and bol.com.

Stating the firm’s emphasis on diversity, Hoong explained, “The variety of skill sets and backgrounds of our consultants means we can shape teams for our clients that have the muscle to robustly drive projects, combined with the deep know-how from professionals that wear the industry business scars needed to make a real impact.”

Azadehdel added, “The independent model has become a rational choice for top talent, abandoning old ways of working to take on rewarding projects and shape one’s own career path. We believe that being independent does not mean being alone. To us, being part of Riverflex means being part of a team of top digital professionals that share methods, knowledge and insights. Providing a real career alternative.”

Keen to show the strength and depth of its growing professional network, the company also hosts a monthly blog which highlights an exceptional Riverflex member. The most recent ‘Riverflexer in the Spotlight’ focused on former BearingPoint consultant Lies de Smit. In the past, De Smit had also worked at Deloitte Consulting's Technology practice. Despite her experience, however, she still entered the independent sphere with some trepidation – something which Riverflex helped her overcome.

Illustrating the importance of a network to freelancers, de Smit commented on Riverflex’s site, “I was afraid of what consulting would be like without having a team or people to discuss problems with… Riverflex is full of knowledgeable and experienced consultants. As an independent, I feel like being able to share my own knowledge can help all of us grow as consultants.”

“We work differently to work better. Better consulting from us, better lifestyles for our consultants, better results for our clients. This will be our focus and ambition.”
– Victor Hoong, Riverflex co-founder

The future

Having made such a promising start, Riverflex's leaders have already made extensive plans to capitalise on their momentum. The firm will continue to focus connecting independent specialists from the open-talent network to provide clients with the right skill sets, while also playing to the company’s strengths in rapidly providing specialist talent and interim management for the quickly shifting needs of clients.

Azadehdel said, “A year ago, Riverflex was just a dream. A year later, this is a real company, making real impact. Together with our consultants and clients, we are on a journey to build the consulting firm of the future from the ground up… Working with lean teams that only do what is needed to meet our clients goals, flexibly scaling up and down and applying digital tooling and agile ways of working to work faster and deliver effective results.”

Victor Hoong concluded, “We work differently to work better: better consulting from us, better lifestyles for our consultants and better results for our clients. This will be our focus and ambition – to continuously innovate and improve what we do and how we do it, delivering quality outcomes for clients.”