BrazilIndependent consultants are happy to wait out Covid-19
Despite having run into significant challenges since the start of the Covid-19 crisis, independent consultants still are happy on their own, according to a study by Comatch.
No doubt, business has dried up for the consulting industry, as a chunk of discretionary spending has come to a standstill amid what the World Bank describes as “the largest economic shock the world has experienced in decades.” Comatch surveyed more than 1,000 independent consultants in its vast network across key markets such as Germany, France, the UK and the US to see how they are faring under the circumstances.
The resultant picture is predictably bleak from a business perspective. While many ongoing projects are continuing, several have seen their planned projects postponed in the best case, and altogether cancelled in the worst. Not surprisingly, these consultants are not optimistic about their revenues in the near term.
Three quarters expect a revenue dip of some magnitude in the coming period, while a third of these predict the dip will reach up to 75% at the very least. The outlook naturally varies by sector, with the revenue expectations reflecting the state of each market under Covid-19 conditions.
Those serving the travel & leisure sector, for instance, are hesitant to expect a recovery any time soon. People remain weary of travelling for fear of infection, leaving airlines with vast fleets of grounded planes and hotels with rows of empty rooms. Airlines across the globe are restructuring or being driven into administration, and few have the financial room to bring consultants on board.
In similar vein, consultants serving industries that are expected to recover speedily in the near future are more optimistic. The chemicals, pharma & healthcare and banking sector are all examples of sectors that have been relatively resilient under harsh conditions, and will likely recover in the near term.
That being said, while a share of independent consultants is struggling with their fee income, although few are seeing this as a reason to seek more security through full time employment. In fact, Comatch reports that more than 90% of independent consultants are happy with their independence, even during the pandemic.
Nearly 90% of this group plans to recommend independent consulting to a friend or former colleage, while the vast majority expect to remain in independent consulting for the next two years at the very least. Reasons for this extend far and wide, and are consistent with most professionals’ motivation for going independent in the first place.
Factors such as the autonomy to decide the nature and scope of work, freedom to select clients, as well as flexibility and availability of time are all responsible for pushing professionals into independent consulting, and have all come to fruition for those that have made the decision to move.
Further reading: Why management consultants choose to go independent.
Consultants value these factors more than the perceived income and job security that comes when attached with a firm – which has also faltered under the crisis. The cut in third party spending has had just as much of an impact on traditional consulting firms, with some estimates placing Covid-19 ‘s impact on Europe’s consulting market alone at a potential $30 billion.
Large consulting firms, including the Big Four accounting and advisory firms, have all had to make staff cuts as a result, looking to optimise costs. So all things considered, independent consultants prefer to at least have control over their time and energy if they have to navigate challenging times in any case. Add to this the fact that the independent consulting market is expected to get a medium-term boost from the rebound, as independents are easy to hire when demand picks up.
“Covid-19 will result in more clients considering innovative consulting models, greater comfort with remote work, and an openness to projects around sustainability and flexible organisation structures,” explained Charlotte Gregson, Managing Partner for UK & Ireland at Comatch.
