The talent game for big employers is changing. While firms have traditionally competed with each other for talent, now they are competing with another alternative: going independent. To better understand who is going independent and why, and what this might mean for companies, researchers conducted an online survey of 307 independent consultants and 94 traditionally employed consultants in Europe and North America, in October 2018. Among their findings: most (90%) independent workers said they proactively chose to start independent consulting. The data suggests that not only are they more satisfied with their current professional life than the employed consultants, but they are also earning more or at least the same as when they were employed, despite working fewer days. The researchers also found that women and millennials seem to especially value the benefits of going independent, from more flexible hours to more equitable pay. The task for companies, they say, is to reconfigure the offer they make to their most talented people, before they leave to strike out on their own.

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The talent game for big employers is changing. In the past, organizations, and particularly professional service firms, could point to the door and remind any grumbling employees that it was cold out there. Today that threat might not have the same impact, as many high flyers themselves are choosing to walk out. While firms have traditionally competed with each other for talent, now they are competing with another alternative: going independent.

Surveys of workers in the U.S. and Europe have found that approximately 25-35% say they freelance for some portion of their work income. While the popular conception of gig workers tends to center on lower skilled and lower compensated gig work such as drives on Lyft or services on TaskRabbit, recent UK research revealed that 59% of the gig economy are knowledge and professional workers and only 16% drivers and delivery workers.

To better understand who is going independent and why, and what this might mean for companies, we worked with management consultancy Eden McCallum (where one of us works) and London Business School to conduct an online survey of 307 independent consultants and 94 traditionally employed consultants in Europe and North America, in October 2018.

Why Consultants Go Independent

The independent consultants in our sample are highly experienced, and approximately 75% are the main or sole household wage earner. Most (90%) said they proactively chose to start independent consulting, whereas only 10% reported being forced to go independent as a result of losing their job. When asked how long they intend to work as an independent, two-thirds (68%) planned to remain independent for more than three years – up from only 32% when we first conducted the survey in 2002.

The vast majority of independent consultants (90%) in our survey reported that they are satisfied with working in this way, and our data indicates that they are more satisfied with their current professional life than our employed consultants. They are also successful. Most are meeting their target days and earning more or at least the same as when they were employed, despite working fewer days. Independents also rate their current work quality as higher compared with when they were at traditional consulting firms – 91% said it offers better value for money for clients and two-thirds said their recommendations are more likely to be implemented.

Our data suggest that independent working appeals because it hits both a professional and personal sweet spot. Professionally, the work seems to be both more meaningful and have higher impact. The majority of independent consultants we surveyed said they feel more gratified in their work and believe they are providing a better service to their clients compared to when they were employed.

Personally, they report having more control over their time and more flexibility in balancing their work and personal lives. As Sohini Pramanick, a former McKinsey manager told us, “With independent consulting, I get the best of both worlds – solving real problems and having impact alongside the flexibility I need to puruse other ventures and interests.”

Of course there is more uncertainty and instability built into the independent career path. There are no employee benefits, no mega global brand to fall back on, and career progression is less clear and tangible. There are often large swings in both work and income. Thus, those whose priority is security and stability may find that a traditional firm is still a better option.

But for many independents, security and stability hold limited appeal. They are confident that they can earn what they target – and most we surveyed do. They also find the singular focus on client delivery particularly gratifying. As Tobias Vetter, a former BCG principal and a successful freelancer for seven years told us, “I’ve found the share of interesting and truly rewarding projects is much higher in my independent consulting life than in my previous role.”

They also do not miss the internal politics and career management involved in staying inside a traditional firm. They are clear about what is important to them: great client work, intellectual challenge, the flexibility and control to choose where, when and with whom they work, and a good work-life balance – and independent work is delivering on all these dimensions. Interestingly, their traditionally employed peers also find these things important, but their satisfaction levels with most of these elements are significantly lower.

The sort of flexibility offered by an independent working life is particularly appreciated by the women we surveyed. Greater control over their time and a better work-life balance were the two key reasons women became independent. (While this is true for men as well, the emphasis was greater for women.) The traditional firms have not adequately adapted their firm-specific demands and working practices to make a more flexible career a satisfying option for most, which may be one reason why women make up a small percent of the top ranks of consulting, despite a roughly equal number of men and women being hired.

The independent option also appears to address the problematic and persistent gender pay-gap found at traditional consulting firms. Consultants’ self-reported full-time equivalent salary information indicated that women are more fairly compensated once they go independent. Specifically, our survey data revealed a 28% gender pay gap for those employed in a traditional firm, but this gap closes (to 3%) when these same individuals are working independently.

The other big winners from the independent approach are millennials. Those we surveyed find that they, too, can earn at least as well, frequently more, than they had done as employees in traditional firms—71% are earning more, and another 13% are earning the same as when they were employed full-time. Most millennials we surveyed (79%) find they are billing at or above their target days. They also appreciate the flexibility to pursue other interests or start-up businesses.

There are also many opportunities making independent work more appealing today. For example, companies are hiring both traditional management consulting firms and independent consultants. Traditional firms are even offering options for their staff to work independently. And more third-party firms (like Eden McCallum) are helping connect professionals to jobs. Many (70%) of our respondents reported that they do some of their work through these third-party firms.

How Traditional Employers Can Respond

The package that going gig offers — of professional fulfillment, control over one’s personal life, fair remuneration, and growing employment options — presents a challenge for traditional employers. Some of your most talented people can see an attractive and viable life for themselves outside the corporation.

The task for companies is to reconfigure the offer they make to their most talented people, before they leave to strike out on their own. Here are a few ways to start:

Offer employees more choice and control over the work they do. While project work lends itself to flexibility, you want your highly skilled employees to feel they have discretion in choosing not just when they work, but also what they work on and how they do it.

A critical finding from our data is that independent workers feel they are actually doing more meaningful and more impactful work, while performing essentially the same sets of tasks as employed workers. Organizations should ask themselves what they are doing that is dampening workers’ perception that their work is both meaningful and valuable to their clients.

Create a better sense of work-life balance. This is the number one motivator leading highly skilled employees to voluntarily go independent. It is not enough to just make flexibility an option; it needs to be de-stigmatized in your organization. Workers need to feel that taking advantage of such policies will not be perceived as lack of commitment.

Recognize that highly skilled women and younger workers are being undervalued in traditional firms, making them high flight risks. It is essential that firms take the time to diligently assess their policies and practices and consider ways to root out hard-to-see systemic biases. For example, minimal parental leave, high expectations for travel, 24-7 client availability, and promotions based on “presence” rather than output all undermine women’s advancement in traditional firms – and make the autonomy and flexibility offered by independent work more alluring.

Research suggests training senior managers to see these issues can help, as can offering better mentoring, support, and rewards systems for these employees. If firms want to retain talent, they have to create a level playing field where everyone feels they have an equal chance to succeed.

Create an “independent” division. Many traditional firms have chosen to create a separate division to offer alumni (and employees, should they prefer it) the option to work as an independent professional. One example is PwC’s Talent Exchange. This gives the firm some access (although not exclusive) to professionals that chose the independent path, and lets the firm participate in and experiment with this new approach to professional careers.