There are a number of reasons to embrace the Gig economy mainly for the freedom and flexibility , but also ethics or regulation issues. But what’s the impact for the consulting industry and its clients?
On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte provides 6 Great Advantages of the Gig Economy and the impact for consulting clients.
Key Takeaway: The gig economy has seen the rise of a myriad of independent consultants, consulting marketplaces and expert networks. As these models are still evolving, pivoting and progressively finding their way, we can observe the key elements that make them a great proposition. One thing is for sure: more than ever, Clients have an abundance of opportunities to source talent, expertise, and offerings tailored to their specific needs and situations.
Hello and welcome to episode 51 of our podcast: Smart Consulting Sourcing, THE podcast about Consulting Procurement.
My name is Hélène, and I’ll be your host today.
Each week I’ll give you the keys to better use, manage and source consulting services.
This week, I’ll talk about 6 Great Advantages of the Gig Economy and the impact for consulting clients
Last week, I explained how Using the Right Compensation Models Can Benefit Your Project
We saw that you can identify the fee structures that will yield more value for your company for each project. It will depend on the type of project, the nature of the deliverables, the context of the project, the flexibility you have on fees, and the level of commitment you expect from the Consultant.
But now, let’s talk about the Gig Economy. Whether you are a fan or not so much, these trends are here to stay. There are many reasons to embrace the Gig economy, mainly for the freedom and flexibility it brings to clients and Contractors. Still, 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 fascinating new opportunities.
One of the more notable changes due to disruption 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 on a per-project basis. The freelance platforms offer plenty of choices, in addition to new partnerships forged between firms that would not have collaborated in the past and that are now more willing to share risks and benefits.
The Gig Economy has opened an entirely 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 famous academic professors created a significant number of them:
Michael Porter created Monitor
John Kotter created 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.
So let’s have a look at 6 Great Advantages of the Gig Economy and how it will impact consulting clients
There is a growing Number of Independent Workers –
According to McKinsey, independent workers now make up to 30% of the working population in the US and the EU, or roughly 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 you find Uber drivers, TaskRabbit workers, and various other Contractors) and at the other end of the spectrum you have 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 can only grow over time on specific niche consulting projects.
There are more 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 pool was changing. The biggest drive for such change were the firm’s clients and their evolving needs for more specialized skills. With time, we might see other big firms creating similar initiatives.
Besides, Independent consultants often have 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 examples 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.
This does not rhyme with higher fees for the clients 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.
It is a New Opportunity also 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 school bus 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 –
In recent years, the most visible development has been the blossoming of dozens of marketplaces proposing access to consulting services. We have identified at Consulting Quest 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-sized projects or interim assignments to reinforce teams during periods with peaks of activity. An intriguing alternative to large consultancies, those marketplaces have raised millions of dollars from venture funds in recent years.
Interesting to note that even when Clients need a team combining several competencies distributed across the globe, a company like A-connect has 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 organize them as an integrated team.
An alternative to freelance marketplaces and integrators is the utilization of Global Networks of Consultants.
Those Networked consultancies, also called aggregators, like Eden McCallum 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 customer confidence and provide a flow of inbound opportunities
For clients those network organizations provide a greater confidence in the quality of the consultants as they perform a continuous assessment of their members.
As these models are still evolving, pivoting and progressively finding their way, we can observe the key elements that make them a great proposition. However, one thing is for sure: more than ever, Clients have an abundance of opportunities to source talent, expertise, and offerings tailored to their specific needs and situations.
That’s it for today. Next time, I’ll review the 7-High Level Consulting Capabilities That Every Client Should Know.
In the meantime, if you have any questions, or want to learn more about what we do at consulting quest, just send me an email at firstname.lastname@example.org
You can also have a look at our website smartconsultingsourcing.com to know more about our book and download free templates & guides to improve your consulting sourcing.
Bye and see you next week! Au revoir!