Growing The Freelance Economy With A Focus On Consultants–Updated

By Executive coaching News
Business consultants in suite and tie

The freelance economy has shown impressive growth, up by four million people since 2014, according to key findings from Upwork, a global freelance platform connecting people to projects. With this growth, freelancers and consultants are finding more opportunities to apply their skills towards work that’s most interesting and engaging. This is a driving force for those who choose to enter the freelance economy.

In 2018, the freelance workforce accounted for almost 57 million professionals who earned nearly one trillion in income, according to a workforce survey (largest to date) commissioned by Upwork and Freelancers Union. In total, this represents over 35% of the entire workforce through 2018.

Even more impressive, these numbers indicate the freelance workforce is the fastest growing component of the U.S. Economy. These insights reaffirm our perspective on freelance work: consulting can be a reliable career choice, and there’s never been a better time for this mindset. Additionally, since we first wrote about this topic in 2016, the economy has experienced an increase in those considered high-earning, full-time freelancers ($75,000 — $150,000 plus per year).

The Rise of the Independent Workforce

Gone are the days of looking at freelance consultants through a narrow scope; they shouldn’t be portrayed as outsiders to organizations any longer. Now more than ever, companies need flexible talent to “jump in” and take the reins on projects when a need for their skills arises. 

An increase in these opportunities has led many professionals to explore this type of work, especially after many spent a portion of their career as full-time employees. In 2018 and beyond, it won’t be unheard of to have an employee leave their role with the company, only to re-commit as a consultant or freelancer soon after.

It’s safe to argue that talent — at least great talent — is not as abundant as it once was, which is a current challenge for management — including CIOs. Companies have reduced past restrictions for freelance contracts, if not eliminating them altogether. 

Findings from a 2016 Prism consultancy hiring survey  reinforced this trend, and reiterated that firms with the fewest problems attracting talent had located the majority of their hires via agencies. All 23 of the participating firms planned for the increased hiring of freelancers and consultants, with an expected increase of 30% over the previous year. Even more interesting, many of the firms admitted to missing their hiring goals for the year leaving potential growth on the table.

From the data being collected over the past three years, we can expect to see steady growth for the freelance workforce. And by 2020, at least 40% of the workforce in the U.S. will be composed of freelance professionals — 55 million people! So although there are unique challenges to face when navigating an independent career, the current horizon is bright with opportunity.

The Demand for Multi-Level Talent

As the need for freelance consultants increases, so does the opportunity for professionals to broaden their skill sets and provide a more dynamic offering to organizations. The idea of having well-rounded (multi-level) talent is becoming more and more appealing, especially for companies that traditionally focus on highly specialized workers. Overall, the largest consulting firms are driving this mindset shift in order to not only keep up with project needs, but also remedy the talent shortage that many have faced over the past few years.

It’s no secret that technology innovation is occurring at a rapid pace— digital transformation, surely you’ve heard about it. Whether we call it “disruption,” or leave it at ‘competition,’ the fact is every company needs the right people (often consultants) who can navigate change while creating favorable results faster than the competition. And Identifying consultants who have a strong foundation in multiple disciplines is key to the success of this strategy. This is the reason multi-level talent is quickly becoming the new normal.

The idea is that consultants who bring holistic skills to the table will have a greater chance of success in today’s environment. The combination of technical knowledge and a business acumen is highly valuable to companies eager for growth. When analyzing nearly all relevant fields of consulting work, technology is the common denominator that drives innovation and upward mobility in the marketplace. However, technology is meaningless if it’s not managed by people who know the who, what, where, when, and howof using it.

Digital transformation is a prime example. Sure, you need people with very specific skills to facilitate the transformation process, but it’s not just a technology challenge. Someone who also understands the impact on a business model, the workforce, and the product life cycle, for example, will undoubtedly outperform someone who only understands a single component of this equation. 

The need for well-rounded talent is an open-door invitation for consultants to build upon secondary skills or even learn something completely new. It’s also an opportunity to control your own success in an economy that’s quickly becoming competitive. If consultants develop a cross-dominant menu of skills for companies to choose from, being overqualified or underqualified won’t be as much a concern. Much like an economist, it appears that a macro and micro understanding of a given challenge can make a consultant a highly valuable asset.

Technology Is Driving The Gig Economy

The freelance-based consulting model is growing largely due to the use of all-in-one technology platforms. Much like patient healthcare, the user experience associated with sourcing talent has gone digital; the client-talent communication process is almost entirely virtual, with little barriers to communication. 

The joint study from Upwork and Freelancers Union reported that 73% of respondents say finding work is easier due to technology. Additionally, 64% of the population recorded an increase in work obtained online.

The demand for freelance talent is driving the creation of marketplaces geared for the alternative workforce. What was once a website with a job posting is now an interactive experience where agencies and talent can meet to discover new opportunities together. LinkedIn has also embraced the rise of freelancers as well. That’s right, even the talent management industry is seeing a “disruption” from innovation and the implementation of new ideas — with the emergence of companies such as UpWork, Fivrr, SkillQuo, and other freelance talent portals.

This growing presence of digital communities focused on freelance talent doesn’t stop at the startup level. Take PriceWaterHouseCoopers for example, with their launch of a talent exchange last year, industry experts can search for consulting gigs that match their skills. As you might assume, leaders had to initiate a mindset shift away from the traditional work structure in order for this project to be activated.

The convergence of job delivery platforms and new skills is changing the playing field for freelancers. Currently, there’s no telling how innovative these systems will become, but as more professionals enter this unique economy it’s not farfetched to predict a substantial shift from the traditional way of working in the near future.

A Mental Shift Towards Freelance Consulting

As with many aspects of technological change, we often hear about grand ideas, but don’t physically see their impact for years down the line. The freelance consulting model is much the same. Only now, a significant-enough portion of the population is gravitating towards this alternative format of professional work for its presence to finally be considered mainstream.

With acceptance and recognition from both the talent and client side of the equation (65% of respondents to the Upwork annual survey agree that freelancing offers more opportunities today), the freelance consulting model is now accepted by influential organizations. Whether it’s due to modern leadership beliefs, an attempt to attract and retain the most skilled talent, or the unprecedented rate of business model disruption among competition (70% of freelancers believe this model is an answer to job loss from automation), the independent workforce is no longer perceived as an option, but rather a necessity for many industries. The IT industry being one of them.

Although this sea change in the perception may not be on your radar, it certainly has impacted the U.S. economy in irreversible fashion. So the question is, now that technology has enabled the freelance workforce, will it also enable you? If the answer is yes, we want to hear from you.