How businesses are benefiting from the gig economy – and why the larger consultancies stand to lose

How businesses are benefiting from the gig economy

Nick Patterson

Nick Patterson

This will hopefully prove an interesting read for businesses who aren’t currently harnessing the full potential of freelance consultants.

Things have changed quite a bit since I first encountered the world of freelance consulting. Rich and I had just left McKinsey, and were in the throes of starting up movemeon when we did some freelancing to “pay the bills”.

Are you looking for a freelance opportunity? Click here to browse all our live jobs

It was quite a shock coming directly from a large consulting firm. The freelance market was very nascent, and people weren’t sure about how to work with freelancers. I’ll never forget being forced to defend my day rate to the CEO in the first week of work; or just how long it would always take for procurement to find a way to pay me!

I’m pleased to say, these stories are becoming fewer and farther between. As businesses have woken up to the potential of freelance consultants, we’ve seen huge growth and development in the freelance consulting market. We think this growth is just the beginning.. (Scroll down to the bottom to find out why)

We’ve been lucky to partner with thousands of businesses here at movemeon, and discussions around freelance roles have grown exponentially over the past three years. Whilst there’s been a lot written about the benefits of freelancing for the actual freelancers, in this article, I wanted to give a quick overview of what we’re seeing on the other side – the businesses using freelancers.

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What we’re seeing in the freelance market

Over the past year, we’ve seen a huge growth in the breadth of businesses that are awakening to the possibilities of freelance.

Freelance consulting is currently the fastest growing part of our business. Historically, freelance projects had either come from young consultancies looking to build an associate pool or consultancies that had suddenly come across a shortage of people to deliver a project.

However, over the past year, we’ve seen a huge growth in the breadth of businesses that are awakening to the possibilities of freelance, from early start-ups through to large international corporates.

What’s driven this change?

In a word – quality. As the gig economy has grown, freelancing has started to attract the very best ex-consultants. This has largely been driven by change in attitude towards careers: the pressure to “be on the right path” has reduced; instead, people are focused on the present. They assess jobs on what they offer in the current moment (both financially and in terms of personal development).

At our quarterly freelance drinks, I asked quite a few in the room on what drew them to the world of freelance. The three most common answers were:

 

  • Autonomy over which projects they do, as well the actual scope of these projects. This autonomy allows you to really develop functional or industry expertise.
  • Money; “cashing in” on consulting experience. When you’re a freelancer, you can be charging out at a lower rate than you were with your consulting firm, yet take home a lot more.
  • Freedom to decide what next step to take in their careers – freelancing offers this just as consulting itself does.

Why freelancers are disrupting the larger consultancies?

Freelancers bring a delivery mentality to their work. Not only have they directly sold the work but their reputation is critical to winning more work.

It has become clear from the freelance projects on our site, or in broader discussions with our clients, that businesses are increasingly viewing freelancers as an alternative to more traditional consultancy firms.

The traditional consultancy model will always be the best option to deliver critical strategy consulting and large implementation projects (partner expertise; another brand to hold to account). However, there has been a growth in the past decade of consulting projects requiring just a smart problem solver on the ground. For this type of consulting, freelancers offer some clear advantages.

Value

The ROI on a freelancer can be 3-4x that of a consultant

Typically, freelance day rates are one-third of their charge rates at consultancies (the other two thirds goe into overheads and the Partner profit pool!). Freelancers will, therefore, offer 3-4x the ROI of a consultant if someone wants a smart problem-solver on the ground.

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Flexibility

Models that you can turn on and off

Freelancers offer even more flexibility than consultancies. Larger consultancies live and die by their utilisation. One key element to managing this effectively is keeping quite fixed staffing models – if your consultants are not full-time on a project it gets a lot harder to keep utilisation high. For a lot of projects, this doesn’t make sense: you’d prefer to have a freelancer for 2 or 3 days per week. This flexibility in the delivery model can further add to the ROI of using a freelancer.

Talent

Both expertise and mentality

Freelancers often have to be more specialised to win projects. In a large business, consultants are forced to stay general for as long as possible – another way to be more flexible to manage utilization. As such, it’s not until Manager or Senior Manager levels where they can boast genuine domain expertise/knowledge.

Freelancers also bring a delivery mentality to their work. Not only have they directly sold the work but their reputation is critical to winning more work. As such, they are under far more pressure to show the impact of their presence. These two factors can result in a freelancer who has a far larger impact than a more traditional model.

Businesses are looking for freelancers

for long-term flexible talent

In addition to disrupting the more traditional consultancies, the freelance market has also created new opportunities for businesses to engage talent flexibly on a longer-term basis. The two most common opportunities we have encountered are:

  • Pools of resource

This is most common with consultancies (from large to small) – who develop a pool of flexible talent. The consultancies can then tap into this for relevant projects, or purely just to manage capacity.

  • Talent acquisition – from freelancer to permanent

We see this most often with PE-backed businesses, although it is a growing trend in corporates, too. A freelancer is initially brought in for a high-profile interim role (e.g., Transformation Director), with the long-term aim of bringing them into the business on a full-time basis. This is particularly effective when a brand is unknown, and struggling to get great people through permanent recruitment.

We think this growth is just the beginning...

Given the number of questions we get asked about freelance consulting, we can be sure of two things:

  1. There is a lot more latent demand in the market and more people could be benefiting from using freelancers
  2. As the freelancer market continues to evolve, more businesses will look to long-term ways of working with freelancers

We expect to see the rapid growth in freelance to continue, and for this to be both into areas where larger consultancies have worked over the past few years, and into new markets (i.e. longer-term talent acquisition).


 

Interested in hiring freelancers?

Get in touch or email us at info@movemeon.com

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You know you’ve been a consultant for too long when…

You know you've been a consultant for too long when...

Nick Patterson

Nick Patterson

After some years working in professional services, there might be telling signs that you have been a consultant for too long. Here are 15 signs that it’s maybe time for you to consider a job change!

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… someone asks you what you actually do in your job, and you fall deadly silent.

… someone asks for a meeting at 10.00 and you say am or pm?

… you refer to your child’s arts and crafts project as a deliverable.

… you use any of the following words in a social context: consensus, buy-in, robust and ‘let’s step back’, deep-dive, stress-test, stakeholder.

… you refer to getting sign-off for a night out.

… you problem solve for a plan for ‘date night’.

… you say to your partner ‘I’m coming home early tonight’ and the clock’s already hit 8 pm.

… you use colour coded Excel for your shopping list.

… you discuss new Excel functions with your (geeky) friends.

… you explain to the hotel staff what their room policy is.

… you’ve seen more films on a plane than in a cinema.

… you show new employees of the client how to get the best coffee from the machine.

… you perform a SWOT analysis on any major life decisions.

… someone refers to ‘being on the beach’ or ‘on the bench’ and you ask them about their annual billable hours.

… you use PowerPoint to design absolutely everything.

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More ways our readers know they've been consultants for too long

… you receive a birthday card signed by all front desk staff from the Marriott Renaissance in Rutherford.

… you head out for dinner one weekend with your partner, you recommend “going back to that awesome restaurant…” and they say – that wasn’t me and there isn’t one of those in this city.

… you know the names of all three flight attendants on the Monday AM flight to NYC but not of your neighbour across the street.

… lifetime status at a hotel or airline becomes a positive achievement.

… the rental car or hotel staff says “It’s been a while since we’ve seen you, everything OK?”

… you arrive back to your home airport and customs ask ”where are you coming from sir….” and it’s a complete blank!

… you introduce yourself by starting with, “Good Morning, Good Afternoon and Good Evening”!

… you get to the airport, stop by your favourite diner, and the waitress already has your standard order ready.

… you start referring to the Marriott as home.

… you can unpack/repack in 15 minutes.

… you really geek out on posts like this. 😉

… you wear a Marlins hat to a Bruins hockey games.

…. you speak the wrong language to the postman.

… you have so many passwords, you can’t get into any device.

… you have to think twice before writing country of residence on the Customs re-entry form.

… you pull out the wrong currency at a local MacDonalds.

… your neighbour asks “what did you think of Sunday’s game?” and you have no idea which sport, when or where it occurred.

… you have more friends abroad than in your own country.

… your company thinks you are more loyal to it than to your community of practice.

… you are in an argument with your significant other and say “May I ask a clarifying question?”

… you get a leaving present from the receptionists at the hotel.

… you dread the thought of going to a restaurant (5 times already this week) on a weekend.

… you’re invited to the hotel staff’s Christmas night out because you’ve stayed in that hotel some many times.

… you get a 12:00 meeting request and are relieved that it’s midnight and doesn’t mess up your lunch plans.

… you know flight attendants in person.

… you teach newly on-boarded car rental staff how to process additional equipment and services.

… locals ask you for dining advice.

… you calculate the opportunity costs of the time you spend for pleasure.

… you wake up in the middle of the night and, for a few moments, not know whether you are home or not.

– by Nick & the movemeon community

Hope you enjoyed this article – we regularly publish our content on our LinkedIn page so if you want to keep in touch just click through.

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The digital future of consulting

The digital future of consulting

These days, when people think of consulting firms, they commonly think of multi-million corporations in the middle of central London, occupying the top floors of skyscrapers. And although this may still be the case with a lot of organisations, it seems that whole lifestyle and culture of consulting is changing due to digital advancements

If you’re looking for an opportunity in digital consulting, have a look at our live jobs. 

These changes to the industry have resulted in many groups of people moving to freelance career options. This new style of consulting has only made a noticeable difference in the past 4 years. It is gradually becoming more interactive and engaging, and this trend may gradually change into a complete digitalisation of the sector.

Growth of digital consulting

The growth of digital consulting makes it exciting for newcomers and recent graduates looking to seek an opportunity in consulting. The digital world opens new opportunities for more virtual and freelance consulting opportunities worldwide, as it seems to be easier to communicate and complete tasks digitally. Many CEOs and owners have only positive thoughts for the future of consulting, makings comments such as:

 

In 10 to 15 years, the consulting industry will be thriving even more than today. As technology continues to improve, specific expertise will be not only required but worth more.

 

Jim Morris, President & Owner of The Alternative Board Tennessee Valley.

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Challenges & opportunities

A challenge that many consulting firms will face is constantly adjusting to match the current economy, as well as adapting to current digital and virtual trends. Consulting firms need to balance their workload in different ways, because while digital technology and virtual communication seem to be the future, there are many clients still used to traditional ways of communication.

 

Although this new way of consulting is important for the industry to grow, currently it isn’t crucial for the consulting sector to fully rely on the advancements of the digital age, as the industry is full of experts in finance, marketing, communications, and so much more. However, traditional consulting has been replaced by digital formats that make processes and communications simpler, and get things done faster. For example, digital transformation allows consultants to examine more data in depth. The depth and detail of analysis made possible by digitalisation aid the consultant in finding issues faster and being able to identify more useful solutions.

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New clients' needs

The digital world is also changing the needs of clients. Many clients are asking for consultants to help them make the transition to digital. So, as well as digital advances changing the pace of consulting, working with the client to help them develop digitally is additional work for consultants. The amount of effort to inform and educate a client of a new digital cycle and innovative ideas is limitless in the digital world. Because of this, it results in consultants having to cope on multiple fronts; dealing with the traditional forms of consulting and communicating, while having to also accommodate new technological strategies and adjusting to current trends.

 

There are many other aspects to the job for a digital consultant. One of their most recognisable jobs is dealing with a client’s SEO. Next would be social media usage, web design, and advertising. Although each of these is a full-time task in itself, above all the role of the digital consultant is to make a client successful online. As a result, different aspects to their role may be prioritised over others depending on the online position and stature the business.

Consultancies' adjustments

In recent years, many firms such as Deloitte have noticed the change in the digital world, and have adjusted to it well. (Deloitte now has 12% of the consulting market.) Firms such as Bain and Company, 9 Lenses, and KPMG were the first to make the initial steps into digitalisation, and have benefited from this change.  It seems to be only a matter of time until many other firms and opportunities become available through the digital world.

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Launch of MMO Freelance

Freelance Event & launch of MMO Freelance - insights

The 10th November 2016, we organised our first freelance drinks! Here are some of the main insights and recommendations that have come out of the event & the launch of mmofreelance.com.

Please sir, can I have some more... information

One constant theme during the freelance drinks evening was a request for more information on what it means to be a freelance strategy consultant, encompassing everything from what day rate to charge to how to go about business development. We cover a lot of these topics on our shiny new blog, however, it’s sometimes just nice to chat these things through in person. Artificial Intelligence may have come on leaps and bounds, however, sadly Siri still can’t advise you on how to write a good freelance cover letter (one can only dream).

That’s why, in early 2017, we’ve been hosting an event for anyone in a permanent role considering freelance consulting & wanting to learn more. It has also been really useful for anyone needing a crash course on effective freelance consulting. We had a panel of current freelance consultants who answered any questions & shared their tips, hints & tricks on what it takes to be successful in the freelance consulting space. The panel has provided an overview of the evolution of freelance strategy consulting.

A little party never killed nobody

“You guys need to hold more events” was also much repeated – trust me, we’re listening! Our events calendar will be more active, with the odd ‘freelancer social’ thrown in for good measure. If you have any recommendations on what you think could be fun please do drop us a note with suggestions

Do you like data? Well, how do you like that data...

There remains a desperate need for a single resource to provide data on what’s actually happening in the freelance strategy consulting market. Yes, there’s been a lot of talk about the explosion of freelance consulting in the past years, however, when trying to do any research on the freelance strategy space, we were astonished at how little data actually exists. Don’t get us wrong, we love hunting for data through multiple sources to build a ‘big picture’ perspective, although it seems highly illogical and extremely unhelpful not having a single source to actually find this information – a ‘Freelancer’s Bible’.

There seem to be reams and reams of data floating around on how freelancing is disrupting certain industries (tech professionals, creative industries, etc), however, we’ve had to utilize a broad range of sources to come up with any meaningful data/insights on freelance strategy. It was fantastic to see mainstream media shining the light on freelance strategy consulting with some FT’s article covering the rise of freelance strategy consulting – if you missed it, it’s well worth a read here. It seems we’re not alone, “we need more data –  which sectors are utilizing freelance consultants, what’s the average day rate for someone at my experience level?”  was a major set of grievances during the freelance drinks evening.  We’ve listened and will be putting together more comprehensive data,  hopefully uncovering some useful data points for freelance strategy consultants across a broad range of topics.

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I live my life a project at a time

Finding the next project remains the main concern for the majority of our freelance community. To help build some confidence in the market we’ve made some of our freelance success stories from this year available on the site. Hopefully, this highlights that the market remains in good health with our client break down being split quite nicely between PE, corporate & start-up clients. Since launching MMO Freelance, we’ve mentioned time & again that transparency above all else is one of our most important founding principles – our clients are not locked away in a database for only recruiters to access. We’re proud of the businesses we partner with – why hide it?
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Once more unto the breach dear friends...

As freelance consulting continues to grow and evolve, the need to educate prospective clients on the many benefits it brings has significantly grown. The most effective discussions we’ve had with prospective clients this year have been when we’ve been able to loop in freelancers we know well to help ‘fill in the gaps’ when clients are scoping projects. This is a combined effort that we genuinely believe will yield some amazing results, with more and more clients waking up to the many benefits hiring freelance can bring – so don’t be surprised if we come knocking on your door sometime soon…

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Say hello to my little friend

The growth of mmofreelance.com is an exciting chapter in our journey to world domination. It provides a platform for our freelance community to share thoughts & insights on freelancing.  We love user-generated content as unique perspectives carry so much more weight than single-perspective commentary. While we might be able to write a general crash course summary on things like winning new clients, every freelancer has their own methodology and approach. Just last week, we spoke to someone who managed to stabilisee her utilisation rate by pre-arranging a round of golf every couple of months with a hiring manager (who loves golf) as a way to stay close and check-in (talk about out of the box thinking). She would do this with multiple clients across a range of hobbies/activities. It really is initiatives like this that keep you ahead of the game. So, if you happen to have any unique or interesting insights/perspectives on freelance, feel free to put together some thoughts (400-500 words) and share your wisdom with the community

Hopefully, these insights highlight that the way MMO Freelance is being built is through a constant dialogue with you, the community, so the more you can interact with us via user-generated content, attending events or finding freelance work, the more you’ll be feeding into how the product and service grow and evolve.

Hasta la Vista

The MMO Freelance team

p.s kudos if you managed to guess the awful film/literature quotes in the sub-headings (with some minor alterations) – No 4. is particularly tricky. 

Happy Freelancing! 

 

Hope you enjoyed this article – we regularly publish our content on our LinkedIn page so if you want to keep in touch just click through. You can also sign up as a Movemeon member to become a part of our Movemeon community to gain access to top opportunities, insight, events and advice.

 

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Consulting – how new entrants are disrupting different parts of the traditional value chain

How new entrants are disrupting the traditional consulting value chain

Nick Patterson

Nick Patterson

We’ve all heard the old adage that consultants “use your watch to tell you the time”. During my years consulting, I rarely got the chance to step back and look at where the client was getting the value from each project. In this article, we look at the value chain of traditional consulting before looking at how new entrants are starting to disrupt each part of this chain.

As is common – the biggest threats to the industry are probably not from within, but from new entrants who specialize at various parts of the traditional value chain.

 

After looking at these new competitors, and areas where they can potentially out-compete consultancies, we conclude by surmising what this means to the industry of consultancy.

Breaking down the value chain of consulting

Let’s start by looking at what consultancies offer their clients. Consistency is one of the most impressive things about the industry: I am always amazed at just how similarly all these firms operate. Regardless of the brand name, the magic formula seems the same (albeit with rather different acronyms and nomenclature!):

 

  • Ask an expert
  • Data collection and analysis/insight
  • Learn from others with similar experience
  • Get a bright team to pull the puzzle together, communicate with stakeholders and agree on a way to disseminate across the company

 

We thought it would be interesting to look at the disruption to each individual part of the value chain. So below, we take each in turn, and identify new entrants/threats to the traditional consulting model.

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Ask an expert

It’s impressive to watch a Senior Partner command a room of clients. We would always joke, after hours of preparation and analysis, the presentation would be skipped over (or in some cases ignored), in favour of hearing the musings of the day of the impressive Senior Partner. The client knew that hearing the latest industry trends and developments from a genuine expert in the field was as valuable as anything else they were going to receive. On top of this, I was always amazed at how quickly the senior members of the team could drive to the real issue at hand in problem solving sessions.

 

Without a doubt, the biggest threat to the expertise consultancies offer are the new “expert networks” that have been developed. These are allowing functional experts, across industries, to offer their insights to an increasingly broad audience. A one-hour call, or a day workshop with someone who has been wrestling with a similar problem for years can allow a huge amount of information to be passed over in an extremely efficient fashion.

 

What we’ve also read from industry leaders is how experts who have worked in similar roles to them often provide a level of insight that can be hard to develop as a career consultant. Knowledge that the “expert” has been in the same boat as you gives clients more confidence in the expert advice: there is a deeper understanding of the shared issues.

 

Expert networks have also become increasingly deep, as companies have an increased number of shared problems. With the rise of technology, a number of previously different industries face similar challenges. Whether it’s cyber security, mobile optimization, social media, or online marketing, a higher proportion of key challenges facing Boards are identical across industries. This also helps overcome the competitive issues of “experts” working with industry competitors, allowing far more wide-reaching networks to be developed.

Data collection/insight

There is far more data today. When I was a consultant, we were often called in to provide market data, or access to datasets that clients didn’t have. Given the increased amounts of data, and therefore competition, the price to access large databases has been dramatically  reduced, thus reducing the scale of economies for consultancies buying access to all their clients.

 

On top of this, clients now have far more of their own data at their disposal. Regardless of the industry, data collection has become much easier. We’ve found this here at movemeon. In an industry traditionally governed by opaque recruiters, data has been less than sparse. We regularly hear from clients how refreshing it is that we can tell them how their job performed; from how many people considered the role, through to conversion ratio to application by consulting brand. Clients can have confidence that they are reaching the best candidates, as we can prove it!

 

Whilst good data doesn’t always mean good insight, new developments in data science and analytics are helping to improve how businesses are using their data. And this is only going to improve – just look how the likes of Palentir and Tableau are taking the industry by storm. The days of analysts crunching away in Excel and pivot tables are limited.

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Learn from similar experience

As a consultant, you always performed better if it was your second project in an industry or function. You had tacitly picked up a huge amount of knowledge around how another business thought about these issues. You were clearly no expert, but you had already seen at least two different approaches to the problem. On top of that, you would typically have a knowledge bank to call upon; a quick search would come up with at least 5-6 Powerpoints with ways to solve the particular problem you were working on.

 

In my opinion, this is one of the areas where there has been the smallest amount of disruption (one quick look at Slideshare shows you how far we have to go!). At movemeon, we are looking at ways to develop networks to help spread this knowledge sharing more easily. We are hoping to set up a series of events (e.g., strategy in internationalizing tech companies), to help start the process. However, it feels like there is a huge space for more platforms to start helping the sharing of this content.

Bright team

Without a doubt the area that has been most disrupted is the readiness of great talent to join an organization on a flexible basis.

 

At movemeon, our freelance business has grown at an astonishing rate. We are increasingly amazed at the latent demand to bring in top-tier consultants, typically at senior consultant/manager level, to help drive through change. Whether it’s:

 

  • Someone to lead a transformation, post-Board sign-off post a project by a strategy consultancy
  • Or, a company post-acquisition who needs longer term support to ensure the 100-day plan gets genuine buy-in
  • Or, just short-term resource to help get a strategic/operational project

 

… we are increasingly finding a huge amount of latent demand in the market. This, partnered with more consultants moving in-house, fulfilling their desire to have “more impact”, means consultancies are increasingly seen as a really expensive way to access great manager and associate level talent.

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Does this spell the death of consulting?

In a word: no. However, it definitely spells the disruption of consulting. Over the past 30-40 years, consulting has grown into areas where it probably shouldn’t have, filling gaps that should have been solved internally, through better talent management. So I feel there the industry cannot sustain its current size.

We’ve already seen some clear shifts in the industry:

 

  • The Big 4 are acquiring consultancies in the “middle ground”
  • Growth in specialized boutiques/tech-enabled consultancies
  • Strategy consultancies are looking to diversify their offering by incubating or acquiring new technologies/functional expertise

 

We expect more of this, and the number of players in the middle ground to continue to be diminished. I’m going to expand on these ideas in my next article, on how the grocery market and consulting industry share more similarities than you might think…

 

by Nick 

 

Hope you enjoyed this article – we regularly publish our content on our LinkedIn page so if you want to keep in touch just click through.

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There is a lot of uncertainty around how much freelance consultants actually cost compared to perm employees: we’re here to help you understand all of this.

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We know the challenges faced by employers and freelancers. We overcome these problems for 29k+ members and 1,900+ clients. Find out more in our info pack.