Employers driving surge in demand for independent professionals

UK professional “gig economy” already worth over £40 billion annually, Source Global Research study reveals

A growing “professional gig economy” of highly-skilled, independent workers is flourishing in both the UK and Europe, driven by organisations cutting back on core staff and instead increasingly relying on outsourced professionals working for themselves.

The findings come in a pioneering study from Source Global Research published by Odgers Connect, the consulting arm of global executive search firm Odgers Berndtson. Researchers interviewed senior executives across 250 UK and European organisations and found that changing attitudes to professional support are driving demand for independent workers.

The biggest impact, according to Source, is at the very top of the professional workplace. Looking at management consultancy bought by organisations in the UK in 2016 for example, Source estimates that independents supplied 20% of all consultancy bought by organisations, worth around £2 billion of the £9.75 billion total.

However, if this were translated to the wider market for professional services in the UK, valued by Source at around £215 billion in 2016, it would imply the UK professional “gig economy” – defined as project-based work – is already worth over £40 billion a year. This is an approximation, (as no firm data exists), but nonetheless gives a first indication of the size and value of the independent professional sector.

“An army of independent professionals and consultants is growing within both private and public-sector organisations,” said Adam Gates, Principal of Odgers Connect. “Brexit is accelerating this trend due to the uncertainty it is creating. Companies need professional support to navigate through these uncertain times, without increasing costs and headcount –further encouraging them to bring in independent operators.”

“All organisations - across both private and public sectors - want more flexibility, expertise and value, and independent professionals deliver it. A quiet revolution is underway in the professional workplace, across both the UK and Europe, driven by the changing needs of employers – and this genie isn’t going back in the bottle.” Mr Gates added.

Source conducted a survey of board-level purchasers in over 250 large and mid-sized organisations, over half based in the UK and the rest in Germany, Switzerland and the Netherlands. Its key finding is that conditions are ripe for a boom in use of independent professionals, with high demand, a skilled talent pool and a trend towards more flexibility.

The study notes that Brexit, and new regulation, are likely to favour independent consultants because organisations will seek the increased flexibility they offer and resist taking on permanent staff. Other key points include the following:

• Nowhere is the ‘professional gig economy’ having more impact than at the very top end, in the rapidly evolving management consulting industry:
• 40% of organisations, the largest group, revealed they now use a fairly even split of traditional management consulting firms and independent consultants.
• When asked why organisations would select an independent consultant over a big firm, flexibility is most important, prioritised by 48% of organisations. This makes flexibility more of an issue than price, prioritised by fewer (38%).
• Quality is also encouraging companies to make greater use of professionals working independently. Organisations reported that independent consultants deliver higher-quality work than consultants at traditional firms in four consulting services asked about, and on a par in a further two. As a result, they said they intend to increase use of independent consultants in the future
• Where high demand and high-quality overlap, Source identifies sweet spots for growing use of independent consultants, notably in regulatory work and technology, notably data & analytics and digital technology. In both areas, around a third of employers plan to increase use of independents.
• Companies’ main concern centres on the lack of quality control when sourcing independents. At present, and unlike at the lower end of the gig economy, there are few well established providers and platforms to assist and, in any case, when it comes to professionals, organisations want assurances over quality and capability. Most employers now rely on personal connections and recommendations to find individual professional operators but, with demand for independent consultants set to increase, particularly in hard-to-find areas like digital and data & analytics, Source says this will soon become unsustainable.