Why are PE, corporates and consultancies increasingly turning to freelance consulting?
In this article, we walk through the three areas where we are seeing most growth on the demand for freelancers, before looking at some movemeon case studies for some live examples.
Private Equity and Venture Capital
We’ve seen the most growth in PE and VC. Traditionally a market that has used consultancies, the flexibility offered by freelance consultants, as well as a lower margin on talent trained up by the top consultancies, is making freelance consultants popular choices.
The demand for freelance consultants is broad: in some cases ad-hoc, short-term engagements pre/post acquisition (e.g, due diligence, 100 day plans, etc); in other cases long-term transformational projects. They can be with either PE companies or directly with the portfolio companies.
Traditionally, there was more of a fear of quality control and not opting for the ‘safe’ name brand consultancy option. However, these fears are becoming increasingly redundant. In terms of quality, the majority of freelance consultants have stepped out of a top tier consultancy and have developed a lot of experience in very relevant projects. Additionally, as the market grows, freelance consultants are increasingly developing their own portfolio of projects with PE companies (if they’re good enough for your competitors, there’s a chance you’re missing a trick – I’ll be writing a separate article in the coming weeks addressing this issue in greater detail, be sure to look out for it!).
This is not just limited to small and mid-cap firms. Portfolio Executives at the large cap firms are also drawing on freelance consultants for longer-term projects, or where they need a higher degree of flexibility. Instead of just parachuting in a freelancer for a couple of weeks’ project, some funds have started to explore new models, such as retaining strong freelancers for a period of 6-12 months and deploying them across 2-3 portfolio businesses to work on a range of projects. We’re also seeing a number of these freelancers moving to the portfolio companies on a permanent basis (a great pipeline for talent).
Consulting and Advisory
Attrition rates across all levels in consulting have never been higher. Whether it’s wanting to start your own venture, to specialize in a particular sector, or simply to improve your work-life balance – the consultancies are facing a major challenge to keep their best and brightest. Nick (co-founder of movemeon) covers the main changes in cusp of disruption what does the future hold for strategy consultancies (definitely worth a read – after you’ve finished reading this, of course). To counter this, some consultancies are now turning to pools of freelance consultants as a possible solution – whether it’s to beef up headcount for a recently won project, or to broaden sector/functional expertise within a team.
The risk is low, as the majority of freelancers have been trained and worked with other consultancies on similar cases, they understand the nature of the consulting lifestyle, and are easy to ‘plug and play’ across a variety of scenarios. Take this recent example:
Corporates have traditionally been the largest employer of freelance consultants. However, this was typically only by hiring managers/business leads that have prior experience of the consulting market. We’ve noticed the volume of this flow has increased over the past year. This seems to be partly driven by people “discovering” that freelancers of this quality exist, and partly as consulting fees are increasingly challenged.
MMO Freelance is also finding a huge amount of repeat business – clients have seen the benefit of freelance first-hand and want to access our freelance pool across a broader range of projects. It’s the wider business understanding of the potential value of using freelance consultants, as opposed to just certain pockets, that is really driving the change.
If you’re sat in a PE/VC, Professional Services or Corporate business and you’d like to learn more, feel free to drop us a note at email@example.com. We’d be happy to set up a call/coffee to chat about the wonderful world that is freelance consulting.
– The MMO Freelance team
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