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The Freelance Management Problem Facing Most Consultancies

There's a growing need for on-demand talent due to demographic shifts in the workforce, rapid digitization, and increasingly niche skillset requirements. Thus, "the right talent, in the right place, at the right time, is the equation for success," says Harvard professor Joseph Fuller. 

In other words, organizations that don't have access to the on-demand workforce risk falling behind. 

[Survey] What's Your Approach to Freelance Management 

The Value of Freelance Management Consultants 

For years, management consultancies have used freelance consultants to fill gaps and satisfy niche skillset requests from clients. And this demand for independent talent is on the rise. According to a 2020 study by Harvard Business School and BCG, 60% of leaders believe that they will opt to rent talent rather than hiring full-time resources in the future. 

Furthermore, the rapid proliferation of the freelance market has led to a growing pool of highly skilled talent—a shift that management consultancies have capitalized on. 

The demand for independent talent at consulting firms stems from the need to fill a skill gap for a short duration or a capacity peak that only requires temporary support—and because consultancies don't always have the internal resources to respond to project requests, they look to freelance consultants to complement their workforce

Furthermore, the majority of project requests require an immediate response, meaning firms don't have the time to recruit for a full-time resource. Instead, they hire an independent consultant to quickly fill the expertise gap and pitch a winning project team.

Management consultancies are also confronting the fact that top consultants are opting for the freedom and flexibility of independent work. Senior consultants with years of experience at top firms are transitioning into independent employment. Not because they have to, but because they want to. According to a 2020 COMATCH survey, the key drivers of the transition from permanent employee to independent consultant are: deciding what topics to work on, having more flexibility, and being able to decide what clients to work with. 

Digital talent platforms like Malt Strategy have made it easier for independent professionals to find consistent project opportunities while also maintaining a high degree of flexibility and autonomy in their work-life.  At the same time, companies can use these platforms to quickly connect with skilled, difficult-to-find talent.

Change is coming and the on-demand workforce is on the rise, but few businesses are prepared to deal with the staffing complexities that accompany such a shift.

The Problem 

Despite the advantages of using freelance consultants to respond to client demands, current freelance management practices are inefficient. Businesses rely on outdated technology that just isn't built to manage fluid workforces. 

The problem becomes even more apparent for firms working with a large pool of external support. Key administrative information is updated manually, which is time-consuming and more likely to be inaccurate. Static tools like Excel store information like work experience, daily rates, contact information, and observations on performance and fit are rarely documented and shared across the company. All of this leads to inefficiency, time lost, and relationship comprising hires. 

How to Manage Freelance Consultants 

With the growing reliance on freelance talent, consultancies that don't know how to manage this workforce risk being left behind in a rapidly shifting working world.

Before hiring an external resource, clearly outline the intended impact. Discuss with the management board why freelance consultants might be of value to the organization. From an operational perspective, it is important to understand and clearly communicate the project’s context, budget constraints, timeline, and organizationally relevant objectives.

The next step is to determine what kind of resource is required. Questions beyond skillset and years of experience should inform this process. The best independent consultant is a project fit, has the right qualifications, and most importantly, is a trusted resource that functions and feels like a permanent employee. 

Cultivating this "part of the team" mentality is essential to creating a trustworthy freelance workforce and ensuring the best possible collaboration. This might seem like a lofty aspiration especially for organizations that have a roster of external consultants numbering in the hundreds, but using a few basic management techniques, it is achievable. 

  1. Make it clear that freelancers are a part of a network closely tied to the organization's internal consultants.
  2. Understand the skillsets of consultants in this network and utilize them appropriately. 
  3. Regularly communicate with external consultants and ask them to periodically update key administrative information (i.e. daily rate and availability).

Finally, having a strategic approach to freelance management is the key to avoiding many of the risks associated with hiring external support. This starts with selecting the right tool to oversee all aspects of the consultant relationship—from performance reviews to scheduling. 

If you're interested in discussing potential solutions to your freelance management challenges, then please get in touch.