5 ways consultancies are using freelancers to their advantage
Much has been made of how the rapid rise of freelancing is threatening the traditional big consulting model. From concerns that independent specialists are undercutting firms, to worries that incumbents are being outmanoeuvred by a more responsive and adaptable way of working, the gig economy has given the established players plenty to think about.
However, many top firms now realise that big brand consulting and freelancing aren’t mutually exclusive and that the flexible freelance talent pool can benefit everyone.
In fact, many of the top consulting firms are now shifting their business model to embrace freelancers, finding that it enables them to serve their clients more effectively, boost growth and adapt faster to a rapidly evolving industry.
So, in the spirit of “If you can’t beat them, join them”, here are five ways that big brand consulting firms are using freelancers to their advantage:
- Drawing on specialist expertise: Traditionally, consulting firms have tended to stay within their particular areas of expertise, determined by the skills they employ in the business. However, freelancers are enabling firms to expand their offerings, through bringing in specialist skills for distinct projects. For example, a pure strategy consulting firm can start to offer the implementation side as well, by bringing in the specialist skills temporarily. Or a generalist firm can draw on vertical skills in actuarial, payments, procurement or tech, to more fully serve particular client needs. The result is an ability to offer more to existing clients, while attracting a wider range of new clients, without investing in specialist skills on a permanent basis. Also, it can be a good way for consulting firms to test their clients’ appetite to hire them for new advisory areas without having to build up a permanent team.
- Plugging capacity gaps: As businesses move faster than ever, managing headcount and capacity needs has become all the more challenging. To ensure they’re ready for the next flurry of projects, firms risk being over-resourced, if not all the work ends up happening. Recruiting good permanent people takes time, which means responsiveness inevitably suffers. But this problem is solved through drawing on freelance talent, who can start work and hit the ground running almost as soon as you need them. The ready market of highly skilled independent professionals, from bright young MBAs to experienced project managers, means that firms can respond rapidly to new briefs, whatever the size, without sacrificing quality.
- Reduced fixed costs: Having seen the success of both of the above use-cases, forward-thinking firms are now moving towards a much leaner consulting model overall, to benefit from the cost and efficiency savings that this brings. These cost savings can then be passed onto clients, who also benefit from having one point of contact and integrated project management. It’s a win-win for both sides while ensuring consultancies are less likely to lose out to specialist boutiques. More controversially perhaps, using more independent talent is also a way for consulting firms to reduce, at least in the short term, training costs.
By only drawing on the exact skills the business needs, when it needs them, firms can minimise the ‘dead time’ that is inevitable with permanent staff.
- Fresh thinking: Concerns about using freelancers often centre around the cultural challenges of bringing individuals into the business temporarily, whether that is a loss of cohesion, values or company-specific knowledge. However, on the flipside, freelancers can be an extremely valuable source of fresh thinking, perspectives and energy. Most freelance consultants have previously worked in a whole range of different firms, big and small, as well as directly with clients, so bring a wealth of experience and insights to bear on the projects they work on. Big consulting firms are finding that this can be extremely beneficial for bringing new ideas to tricky challenges or projects, as well as creating a knowledge transfer effect that stays with the team, even after the individual has moved on.
- ‘Try before you buy’: Finally, although the freelance talent pool is a fantastic source of short-term, flexible talent, it can also be a way of increasing your network and testing out individuals for permanent roles. Some freelancers don’t necessarily see the independent lifestyle as something they will do forever, particularly if they are early in their career. Working with freelancers can therefore also be an effective way for firms to nurture their talent pipeline, with a view to making long-term offers in the future.
Of course, for a leaner, freelancer-enhanced consulting model to work, businesses need ready access to a pool of high-quality, flexible talent, who can hit the ground running as and when they need them. There are a number of platforms where clients can find freelance talent across specialist areas. Many of them, like Upwork and Fiverr, are global and focus mainly on the fully remote, lower-end gig segment of the market. Others, like Catalant and Talmix in Europe and the US, or emerging markets specialist Outsized, tailor to the professional, white-collar, higher-end segments.
Another issue for consulting clients can be that many platforms do not carry out their own vetting of the talent, but rely entirely on self-registration in terms of skills and expertise, sometimes in combination with ratings from previous clients. The reality is, not least in emerging and developing markets, that many clients will not hire any independents who have not gone through a human quality assurance process or in-person interviews. But there are platforms, like strategy specialists TopTal, and the aforementioned growth markets-focused Outsized, who carry out stringent human vetting of applicants before accepting on their platforms and matching them to clients.
It is clear that independent consultants and freelancers do not always compete with management consultancies. In fact, clients rarely chose between a BigFour firm or Strategy Consultancy, and a freelancer. However, large progressive consultancies are increasingly using independent talent to their advantage for a truly win/win proposition.