Is the 'gig economy' gunning for white collar workers?

The nature of work is changing all the time but those in professional services shouldn't be too worried - for now at least.

by Stefan Stern
Last Updated: 11 Jul 2017

First they came for the taxi drivers, and I said nothing, because I was not a taxi driver. Then they came for the food delivery people, and I said nothing, because, well, I didn’t do that sort of thing either. But now the ‘gig economy’ is heading for professional services and People Like Us. Should we be scared?

No. Better to keep calm and you-know-what. Inevitably there has been a lot of hype about the end of the job or career, much of it wildly exaggerated. As the Resolution Foundation explained just before the election, ‘Nearly two-thirds of people in work have full-time roles for an employer – a proportion that has fallen only slightly since the early 1990s.’ 

And even in this emerging world of so-called 'gigs', there are many more kinds of roles to be had than that of the hard-pressed Uber driver. Some light was shed on what is really going on, and whether more of us should be worried, at a recent all-day seminar held at London Business School (‘When the ‘gig economy’ meets professional services’).

The first session was opened by Julian Birkinshaw, professor of strategy and entrepreneurship at LBS. He confirmed that, according to data from the RSA, only one fifth of the 1.1m workers who could be described as belonging to the gig economy were drivers and delivery riders (the most familiar example of this way of working). Around 60%, however, are professionals: consultants, lawyers, executive coaches, designers and IT specialists. And many of these people are happy with the flexible, freelance life. And they are doing well.

Citing research that he and LBS colleague Herminia Ibarra had carried out with the consultancy Eden McCallum (EM), Prof Birkinshaw noted that 59% of independent consultants saw their freelance status as a deliberate choice, 92% were moderately or very satisfied with their working life, and 50% were making more money than when they had worked for a large firm.

These findings were supported by EM’s Dena McCallum. She reflected that, while two decades ago the term ‘freelance’ might have been seen as a euphemism for ‘unemployed’, today’s more flexible working patterns allow for a range of options to be pursued. Teams of consultants can be formed quickly to respond to client demands. Ms McCallum said that they are brought in to solve real issues, rather than 'rubber stamp' ideas that are already fixed and wanted in the boardroom.

Patrick Petitti, co-founder and CEO of Catalant, a Boston (Mass.)-based consultancy, explained that his earlier exposure to life in a global consultancy firm made him question the value of some of the work being done there. His research told him that large corporate clients had a poor grasp of how much they were actually spending on consultants, and why. He founded Catalant as a business which would match specialists, often IT/technology consultants, to clients who needed specific work to be done. Not all the best people want to commit their lives to a vast corporation, he argued. ‘We help companies find the lost talent.’

Richard Punt, CEO of Peerpoint, a division of the ‘magic circle’ legal firm Allen & Overy (A&O), explained that his business was launched in 2013 as a way of allowing lawyers to continue their careers, but in a more flexible way. They have about 200 lawyers on their books, accepting only around one in 15 of those who apply to join. Punt said that the network helps deal with the potential loneliness of being a consultant. It also allows A&O to grow, but flexibly.

All three speakers in this first session confirmed that the boundaries and distinctions which used to separate full-time partners from outside consultants are blurring, if not quite breaking down altogether. Corporations may want to retain as much in-house capability and expertise as they can. But they do not always have the extra ‘fire-power’ they require. The client need is for the right capable and experienced people, now. The management challenge is working out how to meet that demand.

The second session, chaired by Herminia Ibarra, considered the specific experience of a few "professional freelancers". Her session was introduced by McCallum, who reviewed some research findings, and emphasised that this route is the opposite of a so-called ‘mummy track’ – 75% of the sample in the Future of Consulting report were men, 65% are the main household earner, and less than 50% have children under 18.

Among those speaking in this part of the seminar were Chris Tchen, a consultant of 30 years standing, who described how his mix of activities allowed him to pursue a range of professional and personal interests, from big strategy projects to his own renewable energy business. Tim Johns explained how leaving the corporate world – he had worked for both BT and Unilever – allowed him to rediscover what really mattered to him in work and life. ‘Try and remind yourself of who you are, not what you’ve become,’ was his advice. But business disciplines could be hard to enforce in this freelance life if you were not careful about it. ‘I do relationships, not projects,’ he said, which can make agreeing a fee a bit tricky.

The final pre-lunch session consisted of a brief presentation from Jeroen Wels, an EVP in HR at Unilever. He offered a client’s perspective on this changing world of work. And he shared an ambitious vision of an ‘open talent economy’, where the corporation can become a ‘borderless workplace’. Businesses can be too siloed, he said. In Singapore, for example, Unilever has given over space in its building to start-ups so that collaboration is made easier. Wels discussed the need to experiment, to launch three, six and nine month projects, and create ‘abundance in resourcing’.

The afternoon session was chaired by Emma Jacobs of the FT. We heard first from Laura Empson, professor at Cass Business School, London, and an acknowledged expert on professional service firms. Prof Empson discussed the motivations of the ‘insecure over-achievers’ who often rise to the top of partnerships, and questioned how different the freelance life would really be.

Gianpiero Petriglieri, associate professor of organisational behaviour at Insead, warned that the freelance life could ‘collapse two anxieties into one’ – anxiety about our status and anxiety about what legacy we might leave behind. Work is central to our sense of identity, he said. And we need attachments – to routines, places, people, and purpose. The freelance life has to be managed skilfully with that in mind. Matt Trinetti, education director from the Escape the City network, spoke of the need for professionals to take conscious decisions about what they want for their working lives.

The final session, chaired by Lynda Gratton, professor of management practice at LBS, brought the earlier themes together in a discussion of the current state of play. How fast are things changing in reality? What about institutional lag and inertia? Are long-established professional service firms really about to disappear?

Firms exist for reasons of efficiency and to preserve ‘tacit knowledge’. Andrew Hill from the FT observed that alumni networks can be an effective way of maintaining contact with valuable people. Danny Shtainberg, of the Israeli firm Workey, argued that artificial intelligence could be used to build networks and retain knowledge inside the organisation that otherwise might be lost. Tim Morris, professor of management studies at Said business school, Oxford, predicted that a blended and hybrid set of arrangements would emerge to sustain the professional working model. ‘The existing partnership model may have more life left in it than we might think,’ he said. 

So, should we be a bit less worried? Perhaps. This ‘gig economy’ need not be so scary, if you get your act together. Job titles and roles will continue to change, as will the nature, duration and content of employment contracts. What is not going away, however, is the need to deploy talented people intelligently at the right time for the right price. There is a lot of work to be getting on with.

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