HR Consultancy in the 'gig economy’ and how companies may need to change their approach to talent management.

1. The Future of
HR Consultancy
in the Gig
Economy
A G R A V I T Y S E L E C T W H I T E P A P E R
By Robert Andrews

2. THE SHIFT TOWARDS A CONTINGENT
WORKFORCE
WHY USE
INDEPENDENTS?
THE SHIFT
TOWARDS A
CONTINGENT
WORKFORCE
There is a growing band of freelance consultants who
command premium rates.
These freelancing consultants differ from other 'gig
economy workers' insofar as they are less dependent
on piecework distributed via the internet.
UK official statistics show that 55,000 of 175,000
management consultants and business analysts are
now self-employed.
There are a number of reasons for the shift...
Profitability -
increased
utilisation of perm
staff and often
better margins on
associates and
contingent staff.
Cost structure
- opting to pay
purchase orders
instead of salaries
(off balance sheet)
to protect against
economic
downturn/drop in
demand for services
etc...
Availability of talent
– the number of
Freelance HR
Consultants is
growing rapidly in
line with the wider
increase in
contingent workers.
WHY USE
INDEPENDENTS?

3. THE FUTURE OF HR MANAGEMENT
CONSULTING IN THE GIG ECONOMY
HR & Talent Management consultancies have been
working with their clients to devise and implement
strategies for the gig economy and an increasingly
contingent workforce.
But what about their own strategies?
Traditionally, the corporate culture at large strategy
and management consultancies has been
unreceptive to part-time and contingent personnel.
However, given the growing market and increasing
number of contractor-consultants (often ex-
employees of the big professional services firms or
management consultancies), attitudes towards
freelance consultants are changing.
Business leaders are beginning to recognise that they
too need to tap into a network, which includes former
employees for whom the corporate routine may not
be flexible enough, or use freelance specialists in
areas where in-house knowledge is scarce.
In the coming years, spending on HR consultants is
forecast to continue to grow on the back of trends in
the human capital domain, such as; an ageing
workforce, continued mismatch on the labour market,
the rising impact of diversity/inclusion and the need to
bring employee capacities in line with 21st century
skillsets.
The UK
management
consulting market
has seen strong
growth in recent
years, ranging
between 6% and
10%
HR consulting,
which represents
approximately 10%
of the total
consulting market,
has been growing
in line with this;
worth £740M in
2012 and £1Bn in
2016

4. Many consultancies are trying to solve
their contingent personnel gap by
building huge associate pools.
Companies are spending on marketing
aggressively, with the goal of getting as
many relevant people as possible to
sign-up to their associate pool. Hiring
managers are then given access to these
huge databases of CVs via a portal.
However, this is a broken model. The
hiring managers can’t possibly build
effective relationships and/or keep up-to-
date with the status of all candidates on
the database. This leads to frustration
and wasted time when hiring managers
conduct searches and find suitable
candidates only to discover that the
contractor is not available in the period
they need them – most good contractors
will be busy people!
In short, the system fails as the hiring
manager is totally dependent on the
associate to keep their details and status
up-to-date
The reality is that contractors soon
disengage after they sign-up for such
portals and databases. The pool is too
big, with too much irrelevance. It is too
costly/time-consuming to keep tabs on all
those people in the data pool.
It's pretty easy to sign-up as many
potential candidates as possible but, the
only benefit this brings is to reduce
communication costs when asking those
people if they're available for work.
The current model is simply a false
economy. It ignores the additional time
managers must spend searching and
contacting people.
Sourcing highly specialist skills requires
an expert; someone who knows the
market, has the right proposition to
capture the right targets, and is capable
of nurturing talent until they are needed.
A BROKEN MODEL...

5. Its a case of going back to basics;
manually searching and building a small,
highly specified talent pool - on average
no larger than 200-300 of the very best
HR Consultants.
It's vital to foster personal and
collaborative working relationships with
those people in the talent pool - ensuring,
in the process, that their details and
status are up-to-date.
Although there will still be occasions when
traditional full searches may be required
for very specialist requirements, by
implementing a properly vetted and well-
nurtured talent pool, firms are generally
able to respond incredibly quickly to the
vast majority of requirements.
HOW DO WE FIX THIS?
Regular pipeline review meetings are a
necessity to ensure that the shape of the
talent pool(s) is best suited to upcoming
projects. This, in conjunction with
extensive 1-2-1 sourcing and candidate
nurturing, ensures that suitable talent
can be pulled into projects quickly and
efficiently.
No more frustrated searching through
CVs, no more wasted time contacting
candidates who aren't available.
A simple solution which takes the best
elements from traditional executive
search and combines them with the
efficiencies of database-driven talent
pools to achieve optimum performance
for specialist contractor sourcing.
This is known as an 'HCM Associate
Network Partner Model'.

6. HCMNP VS. TRADITIONAL
MANAGED SERVICE
PROVIDER (MSP)
MSP and agency arrangements tend to
work best with high-volume, lower-
skilled roles and are largely a reactive
service that responds to high-volume
requests.
This is far less effective when highly-
skilled, specialist skills are required,
such as with HR Consultancy.
An HCM Associate Network Partner
Model is a proactive partnership
approach, designed to deliver a just-in-
time solution whilst managing the risks
and developing solutions to overcome
the many challenges presented in
building an effective contingent talent
pool.

7. The appointment of a single
generalist MSP is being
superseded by a best-of-breed
approach and partnerships with
industry specialists.
The future of HR Consulting
includes utilising a growing
number of freelance and ‘gig’
consultants.
Firms must quickly work out
how best to tap into this
wealth of skills, knowledge
and experience.

8. The reality is that independent or
freelance consultants are a growing
and increasingly important section of
the HR Consulting landscape.
Firms that recognise their importance
and leverage their growing power will
enjoy stronger growth and increased
market share.

9. A B O U T T H E A U T H O R :
R o b e r t A n d r e w s h a s b e e n w o r k i n g i n
t h e H R C o n s u l t i n g a n d p r o f e s s i o n a l
s e r v i c e s e c t o r f o r 1 5 y e a r s .
H e i s t h e f o u n d e r o f t h e N e x t
G e n e r a t i o n H R L e a d e r s h i p N e t w o r k
a n d h e a d s G r a v i t y S e l e c t ’ s H R
A s s o c i a t e N e t w o r k D i v i s i o n , i n
a d d i t i o n t o t h e E x e c u t i v e S e a r c h
D i v i s i o n f o r S e n i o r A p p o i n t m e n t s
a c r o s s i n d u s t r y s e c t o r s .
gravityselect.com / 0207 048 0777