Inside The Rapidly Growing High-End Independent Talent Economy

September 8, 2022 – The world of work is undeniably different today than it was just a few years ago. During one of the most turbulent periods for business in decades, companies have undergone significant changes to rise to the challenges—from increased adoption of remote working to transforming their very business models and product offerings to meet the ever-increasing demand for digital solutions, according to the 2022 Talent Trends report from the Business Talent Group.

“While top companies are engaged in fierce competition to acquire the in-demand skills they need to fuel growth and capture fast-moving opportunities, the best workers frequently are finding greener pastures elsewhere,” the report said. “Many highly skilled talent have found they desire greater professional control and flexibility than any fulltime role could ever afford.” It’s no surprise then that the number of independent workers surged dramatically in 2021—rising 34 percent to 51.1 million from 38.2 million in 2020, according to statistics from MBO Partners. The growth was especially pronounced at the upper end, where the number of independent workers who reported annual earnings of $100,000 or more soared nearly 30 percent to 3.8 million. That’s the most high-earning independents recorded since researchers began studying them, and nearly twice the number found a decade ago. These trends are expected to continue, with 56 percent of non-freelancing professionals saying they’re likely to freelance in the future, according to a report from Upwork.

“Across the board, there is more demand for talent right now than any of us has ever seen, and talent have enormous leverage because of that,” said Jody Greenstone Miller, co-founder and co-CEO of Business Talent Group. “They are taking the lessons of the pandemic—where they were able to work remotely and more flexibly—and looking at their professional futures differently. Top talent—including talent that you can’t find anywhere else—are flocking to the independent market for professional control: They want to choose whom they work with and what they work on.”

Touching Base with the Independent Talent Economy

Business Talent Group recently surveyed 1,928 highly skilled independent talent about their experience consulting for leading companies through the past year of resilient optimism, continuing uncertainty, and rapid growth in independent talent usage across the business landscape. Of the respondents: 88 percent were already working as an independent consultant for more than one year.

However, the number of newly minted independents—those with less than a year of independent experience—doubled since Business Talent Group’s 2020 survey, as skilled professionals flock to the independent talent market amid the Great Resignation. Forty-three percent of consultants were actively working on projects for 10 or more months, and 62 percent were actively engaged on projects for seven or more months (increasing from 36 percent and 59 percent a year ago, respectively). Consultants who worked with large companies ($1 billion-plus in revenue) were more likely to be actively engaged on projects for 10 months or more across the year.

Why Skilled Talent Choose—and Stay On—the Independent Path

What drives a successful and motivated management consultant, project manager, subject matter expert, or executive to enter the independent talent economy on a full-time basis?

Overwhelmingly, Business Talent Group found that independent talent were seeking:

Control

• 70 percent went independent because they wanted to pick their own projects.
• 60 percent were looking to be their own boss.
• 57 percent wanted to select their own clients.

Flexibility

• 63 percent were seeking the freedom to work from anywhere.
• 57 percent chose independence to work when they wanted to.

Variety

• 62 percent were compelled by the variety of work.

When asked what they like most about being an independent consultant, 45 percent of respondents cited the freedom to work from anywhere as the top benefit. Comparing cohorts, new independent consultants viewed working from anywhere and increased learning opportunities more favorably than tenured talent. On the contrary, seasoned consultants—those with four or more years of freelancing experience—placed greater value on picking their clients and project variety.

Satisfaction Rebounds

After a dip in satisfaction during the height of the pandemic, an overwhelming majority of talent (83 percent) told Business Talent Group they were satisfied with fulltime independence—besting pre-pandemic satisfaction levels. In fact, satisfaction was running so high that 88 percent of talent said they would recommend the independent route to their professional colleagues. Respondents indicated that dissatisfaction is most often correlated with shorter duration projects, smaller clients, and uneven project flow. Tenured talent were most satisfied (88 percent), and new talent were more likely to have neutral sentiments expressing neither satisfaction nor dissatisfaction (22 percent) as they navigate the waters of creating an independent consulting practice.

Rates on the Rise

The Business Talent Group report found that nearly four in 10 talent reported higher daily rates in 2021—a significant increase over rates during the 2020 pandemic-induced economic uncertainty and a key contributor to rising talent satisfaction. While approximately half (48 percent) of high-end independent talent said they have seen no material change to their daily rates, only 13 percent said they experienced lower daily rates. What’s more, 35 percent of independent talent said they enjoyed an increase in overall compensation in 2021 compared to 2020.

Talent engaged on longer projects (more than six months) and for larger companies ($1 billion-plus in revenue) commanded higher daily rates and an overall increase in compensation than those on shorter duration projects for small- and medium-sized businesses. Overall, the self-reported median daily rate was $1,200 in 2021 with the top 20 percent of talent seeking $2,000-plus per day and the top one percent commanding $3,500-plus per day (nearly three times the median rate).

Extended Stay of Independence

With a steady flow of interesting projects, an increase in total compensation, and rising satisfaction, it’s no surprise that less than half (42 percent) of independent talent said they would consider returning to the traditional full-time workforce. For elite independent talent engaged on longer-term projects for large enterprise clients ($1 billion-plus in revenue), Business Talent Group found that the pull to return to traditional employment diminished even further. In fact, 61 percent of talent with four or more years of independent experience said they are unlikely to return to full-time employment in the next 12 months, compared to only 43 percent of new independents. The same was true for 62 percent of talent who typically work on projects longer than six months and 56 percent of those who said they primarily serve large enterprise clients.

Related: Steady Need for Interim Talent Keeps Firms Busy, and Expanding

So what would it take to lure these in-demand thinkers and doers into a permanent role? According to talent, the biggest motivating factors for re-entering traditional employment included compensation (59 percent), a dream job (38 percent), or a flexible work arrangement (37 percent).

Helping Clients Get Ahead of the Game

Survey respondents indicated that in 2021, the focus areas of their clients’ projects began to realign with pre-COVID (2019) trends as companies of all sizes tapped elite independents to provide expert strategic insights, optimize operations, boost performance, and advance marketing and sales efforts.

Why Interim HR Leaders Are in Growing Demand
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Within the “other” category, talent also reported increased demand for projects related to:

• Talent strategies and workforce planning.
• Learning and development (L&D) and executive coaching.
• Diversity, equity, and inclusion (DE&I).
• Mergers and acquisitions.
• Environmental, social, and governance (ESG).
• Supply chains.
• Fundraising.

Serving Companies of All Sizes and Segments

While independent talent are an essential resource for every industry, talent reported that companies in the healthcare, technology, consumer goods, and financial services industries disproportionately called upon their services in 2021, according the Business Talent Group report. In terms of company size, a vast majority of talent (71 percent) reported that they primarily work with small- ($0-50 million) and medium-sized ($51 million – 1 billion) clients. Though Business Talent Group has seen that large enterprises frequently tap independent consultants for in-demand skills and expertise, there are only so many companies that lay claim to more than $1 billion in annual revenue. As might be expected, these coveted, high-value projects tend to go to the most tenured consultants. In fact, 41 percent of talent who said they primarily serve large enterprises possess seven or more years of independent experience.

On-Demand Platforms on the Rise

Networking is essential for independent consultants, with 72 percent of respondents saying they rely on personal connections built through their successful careers and educational pursuits as their primary source of projects. Previous clients are also a key source of project work, according to 38 percent of independents. On-demand freelance marketplaces, like Business Talent Group, have also become an important sales channel for building an independent consulting practice. But while 74 percent of all talent join two or more on-demand talent platforms, nearly half (47 percent) said they only actively use one platform to source right-fit projects.

The Business Case for Independent Talent

Not surprisingly, virtually all respondents (97 percent) agreed that companies should utilize independent consultants in addition to full-time staff for an optimal workforce. Among the key benefits cited: 91 percent said that independent consultants deliver enhanced capabilities and skills; 75 percent said independents help companies move faster on initiatives; 72 percent agreed they deliver business leaders flexibility and fast access to talent.

A Great Time for Independent Talent

Two years into the COVID-19 pandemic, the future of the workplace is as uncertain as ever. “As companies think about how to retain and attract talent in one of the tightest labor markets to date, high-end independent talent can be a game-changer—providing a nearly limitless source of in-demand skills and expertise to fill resourcing gaps, lead critical projects, and develop strategies to seize unforeseen opportunities,” the Business Talent Group said.

“As more and more skilled talent discover that independent arrangements suit their preferences for professional control, flexibility, and fulfillment in their work, leading companies are also realizing how valuable flexible projects and consultants can be,” the report said. “With so much uncertainty and potential for change remaining on the horizon, there’s no time like the present to take advantage of the booming independent talent market.”

Related: Why Savvy Organizations See Interim Leaders as More Than Placeholders

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media