Freelance Consultants: Their Role and Benefits for Your Business
Freelance consultants are self-employed professionals offering expert advice and specialized services to businesses and organizations, and the freelance consulting market has experienced exponential growth in recent years. Over 50% of the US workforce could be freelancers by 2027, reflecting a significant shift from traditional employment to a more flexible and agile workforce.
This growth is not only in numbers but also in the diversity of expertise available. In fact, almost half of the freelance workforce comprises professionals in high-demand areas such as finance, IT, or management consulting.
Freelance management consultants are experienced professionals who often come from top-tier consulting firms. By moving to the freelance market, they bring expertise to their clients, without the need for long-term contracts. Consequently, businesses have greater flexibility and can save costs compared to hiring full-time employees or engaging traditional consulting firms.
This article delves into freelance consultant’s backgrounds, the scope of their work, and the main reasons for engaging their services.
The growth of the freelance consulting market
Heading into 2024 with economic uncertainties and a volatile business environment, Corporates and Consultancies are employing cost-cutting measures. As a result, multiple companies are rethinking hiring practices, reducing headcounts, and providing opportunities for the growing market of freelance consulting platforms.
The global freelance contribution to GDP exceeds one trillion dollars in the US alone, with over 60 million freelancers over the country. Most importantly, the number of full-time freelancers in the US grew by 90% between 2020 and 2023, whereas part-time freelancing grew by over 130%.
In parallel, most management consultants are moving towards the freelance track, as they seek a better work-life balance and more control over their income and career. Freelance platforms are driving this trend, with major players reporting a threefold increase in consultant registrations every year since 2020.
As reported by a Harvard Business School survey of 700 business leaders about the future of work, over 80% of large corporations are planning to increase their utilization of freelance consultants. Moreover, nearly 50% of respondents expect their use of new digital platforms to increase in the future.
The highest market penetration of freelance consultants is reported by Forbes in North America (88%), Mideast (80%), and Europe (77%). The top industries where executives expect significant utilization of freelance consultants are in Digital Expertise (73%) and Management Consulting (71%).
Freelance Management Consultants at Consultport
Who They Are
Freelance consultants are self-employed professionals who offer expert advice and specialized services to businesses, organizations, or individuals on a contractual basis, without being a permanent employee. They work with clients to support them on their most critical projects in the short-term and (mostly) long-term.
At Consultport, the network of 10,000 freelance consultants is made up by:
- Top-tier Management Consultants, with expertise including but not limited to strategy, process excellence, procurement, or project management.
- Digital Experts, including digital transformation consultants, digital marketing consultants, and business automation experts.
- Industry Experts, with deep expertise in a specific industry, including understanding of the trends, challenges, regulatory environment, competitive landscape, and best practices.
- Finance Experts, experts in cash flow optimization, financial modeling, forecasting, and much more.
From Where They Come From: Diversified Consulting Background
Freelance Management Consultants at Consultport offer a deep consulting experience with a background in Consulting Firms such as:
- MBB: McKinsey, BCG, Bain.
- Big 4 Consultancies: PwC, EY, Deloitte, KPMG.
- Boutique Consulting Firms: including Cornerstone, Putnam, and many others.
- In-house Consulting: For instance, Porsche Consulting, DHL Consulting, and EON Consulting.
Consultport has a selective vetting process, and accepts only consultants who meet certain predefined criteria to ensure and maintain high-quality standards in consultants’ offering. In particular, it focuses on senior consultants, typically accepting individuals with three years of experience or more, extending up to senior roles such as partners and principals.
Currently, 40% of Platform consultants come from MBBs, while 20% are from Big Four. The average median level of experience is growing, with freelancers leaving consulting at Manager Level.
What They Offer: Project Scope
If the industry can vary—from financial services to automotive, retail, or Medtech—the functional expertise of freelance management consultants, though seemingly broad, actually falls into three distinct categories:
Strategy and Project Management
Consultport offers a diverse range of strategy consultants, each bringing specific expertise to address clients' needs.
Corporate Strategy Experts provide comprehensive solutions to refine and align organizational strategies with business goals. Thus, they can assist with corporate restructuring, mergers and acquisitions, and long-term strategic planning.
Market Entry Strategy Experts facilitate smooth and effective market expansions. They provide insights into new markets, including regulatory environments, competitive landscapes, and local consumer behavior.
For companies seeking innovative solutions, Business Model Innovation Consultants drive the digitization and transformation of core business models. They help clients restructure their business processes, adopt new technologies, and create innovative value propositions.
Lastly, Project Management Consultants support clients in an efficient project execution, including Project Management Office (PMO), crucial in standardizing project management practices and aligning them with the organization's strategic goals, but also the implementation and management of agile transformation.
Finance and Corporate Development
Consultport's finance consultants and experts provide specialized services to address complex financial needs.
Risk Management Consultants identify, assess, and mitigate financial risks, ensuring the protection of company assets. They help clients through a detailed financial assessment through Cash Flow at Risk (CFaR) Modelling, managing financial exposure, and implementing risk mitigation frameworks.
Zero-Based Budgeting Consultants bring deep industry expertise to help organizations optimize their budgets, allocate resources more efficiently, eliminate waste, and improve overall financial performance.
Digital Finance Consultants lead the transformation of finance functions through digitization. They assist in implementing advanced reporting and analytics strategies, automating processes, and enhancing data analytics capabilities.
Working Capital Optimization Consultants focus on improving a company’s liquidity and financial health by optimizing cash flow, inventory management, and receivables. They help ensure long-term financial stability through increasing working capital visibility, payment term negotiations, and working capital KPIs.
Finally, Fundraising Consultants support clients in structuring funding rounds and developing equity pitch decks. They help with financial projections and valuations, helping businesses attract investors and secure necessary capital for growth and expansion.
Digital & Innovation
Consultport's Digital Expertsprovide specialized expertise to drive digital transformation & IT projects.
Data Analytics Consultants serve as data strategy consultants, data architects, analysts, and predictive modeling experts. They leverage advanced analytics and design data architectures to optimize business efficiency and performance.
Cloud Services Consultants combine cloud strategy, cloud migration, and Oracle ERP expertise to manage migrations, ensure security, and integrate cloud services. They help optimize cloud infrastructure, ensuring seamless transitions to cloud-based environments to enhance company’s efficiency.
ERP Consultants blend expertise in SAP SD, ERP implementation, and ERP cloud migration to optimize enterprise processes and ensure successful system integrations. They streamline operations, enhance data visibility, and drive efficiency through tailored ERP solutions.
Digital Marketing Consultants bring expertise in content marketing, omnichannel marketing, PPC strategy, and marketing automation. They drive engagement and conversion by creating and executing comprehensive digital marketing strategies that align with business objectives and maximize ROI.
Finally, Cybersecurity Consultants are experts in cloud security, data encryption, and data governance. They protect sensitive information, ensure regulatory compliance, and mitigate cyber threats by implementing robust security measures and developing comprehensive cybersecurity strategies.
Overall, hiring freelancers is becoming easier than ever, driven by the increasing levels of industry experience among freelancers and the increasing breadth of project expertise. In the last six months at Consultport:
- 80% of Consultants were involved in strategy projects (market entry, growth strategy).
- 50% in people and organization/project management (PMO, process excellence, transformation projects).
- 30% in Finance & corporate development projects (due diligence, M&A, restructuring).
Do you want to know more? Discover Consultport’s Consultants.
Why you need Freelance Consultants
Cost Efficiency: Engaging independent consultants can be substantially more cost-effective than traditional employment models. Businesses and conventional consultancies save on benefits, office space, and equipment costs, and avoid adding permanent headcount. In fact, according to Consultport’s Consultant Pricing Tool, hiring freelancers costs 65% less than a consulting team.
Access to External Expertise: 51% of freelancers provide knowledge services, including management consulting, and 68% of management consultants specialize in strategic projects.
Flexibility and Agility: Hiring freelancers allows businesses to quickly scale the workforce based on project demands. Approximately 78% of business leaders in the US prefer hiring freelancers over full-time employees, citing flexibility as a significant benefit.
Fast Access to Talent: Freelance platforms facilitate swift access to the desired profiles. Platforms like Consultport can match clients with suitable consultants within 48 hours, which is a game changer for companies to find and onboard quickly the right talent for critical projects.
Case Study: Commercial Due Diligence for German Furniture Retailer
The Challenge
A mid-market private equity investor sought to conduct commercial due diligence (CDD) on a potential acquisition target, a German furniture retailer. They required a consultant with extensive experience in conducting over 20 CDDs for private equity firms and a deep understanding of the local furniture market.
Role of Consultport
Consultport responded promptly by proposing three candidates within 24 hours. The client interviewed two candidates and selected a former Bain consultant. Then, the consultant began working with the client team 48 hours after the initial request.
Project Requirements
The main requirements of the client for the CDD were:
- External Market Analysis: Assess the overall market dynamics, competitive landscape, and growth potential.
- Operational Efficiency: Evaluate the retailer's operational processes and identify areas for improvement.
- Financial Health: Analyze the financial statements to understand revenue streams, profitability, and cost structure.
- Market Positioning and customer insights: Understand customer satisfaction, loyalty, and brand perception.
- Risk Assessment: Identify potential risks and challenges that could impact the retailer's performance.
Approach
Using secondary sources and conducting industry expert interviews, the consultant gathered preliminary insights about the target company and the industry, to do an in-depth analysis of all commercial aspects of the target company:
External Market Analysis
- Conducted market research to analyze current trends, demand drivers, and competitive positioning.
- Utilized industry reports, customer surveys, and competitor benchmarking.
Operational Efficiency
- Reviewed supply chain management, inventory turnover, and logistics efficiency.
- Conducted site visits and interviews with key management personnel.
- Assessed the integration of technology in operations, including ERP systems and CRM tools.
Financial Health
- Examined historical financial statements, focusing on revenue, EBITDA, and net profit margins.
- Conducted a detailed cost analysis to identify areas of cost-saving opportunities.
- Analyzed working capital management, debt levels, and cash flow projections.
Customer Insights
- Conducted customer surveys and focus groups to gauge satisfaction and brand loyalty.
- Analyzed customer demographics, purchasing behavior, and feedback.
- Assessed the effectiveness of marketing and loyalty programs.
Risk Assessment
- Identified potential market risks, such as economic downturns and competitive threats.
- Evaluated internal risks, including operational inefficiencies and management capabilities.
- Assessed regulatory and compliance risks.
Findings
After 5 weeks of work, the consultant provided key KPIs and recommendations for the PE company:
Key Performance Indicators (KPIs)
- Revenue Growth: 3% YoY
- EBITDA Margin: 12%
- Inventory Turnover Ratio: 4 times/year
- Customer Satisfaction Score: 75%
- Market Share: 3%
Overall Assessment
- Market Position: The retailer holds a 3% market share in a highly fragmented market, with high growth opportunities.
- Market Growth Potential: The furniture market in Germany is projected to grow with a CAGR of 5.1% between 2021-2030, with increasing demand for high-quality furniture.
- Operational Efficiency: There are significant opportunities to improve supply chain efficiency and reduce costs. For instance, the integration of advanced ERP and SCM systems could streamline operations.
- Customer Loyalty: High levels of customer satisfaction and loyalty indicate a strong base for future growth.
Value Creation Opportunities
- Revenue Growth: The product range is narrow, and expanding it in the high-quality furniture segment could increase revenue growth to 8% YoY.
- Profitability: Improving operational efficiency and supply chain management could raise the EBITDA margin to 16%.
- Market Share: Targeted marketing and expansion strategies in North Germany could grow the market share up to 6%.
- Customer Satisfaction: Introducing loyalty programs could boost customer satisfaction scores to 85%.
Results
Based on the due diligence findings and the potential improvements identified, the PE investor can expect a significant increase in the value of their investment. The projected internal rate of return (IRR) for the acquisition, considering the implementation of the recommended strategies, is estimated to be in the range of 20-25%.
If you want to know more, you can visit Consultport’s Case Studies.
Conclusion
Freelance consultants offer businesses an opportunity to access specialized expertise with more flexibility and cost efficiency compared to full-time employees. As the freelance market continues to grow, platforms like Consultport are making it easier than ever to connect with highly qualified consultants who can drive critical projects to success.
Whether you need strategic advice, financial analysis, digital transformation, or operational improvements, freelance consultants provide the agility and expertise needed to navigate today's dynamic business environment.
Frequently Asked Questions (FAQs)
What is a Freelance Consultant?
A freelance consultant is an independent professional who offers specialized expertise and advisory services to clients on a project or contract basis. They provide a wide range of services across various industries, including business strategy, marketing, finance, IT.
Freelance consultants are hired to address specific problems, implement strategic initiatives, or provide expert insights without the long-term commitment of a full-time hire. This flexibility allows businesses to access high-level skills and knowledge as needed, making freelance consultants a valuable resource for tackling specialized projects and achieving business goals.
Why do I need freelance consultants?
- Cost efficiency, as hiring freelancers costs 65% less than hiring a consulting team.
- Flexibility and agility: businesses can quickly scale their workforce up or down based on project demands. Almost 80% of employers plan to increase their use of freelancers, citing flexibility as a key benefit.
- Fast Process: In Consulting Platforms such as Consultport, the projects are staffed within 48 hours, enabling companies to quickly find and onboard the right freelance for projects.
What is the experience of freelance consultants?
Their background spans three key areas:
- MBB: McKinsey, BCG, Bain.
- Big 4 Consultancies: PwC, EY, Deloitte, KPMG.
- Boutique Consulting Firms: including Cornerstone, Putnam, and many others.
- In-house Consulting: For instance, Porsche Consulting, DHL Consulting, and EON Consulting.
How do freelance consultants ensure quality?
Consultport has a selective vetting process, accepting only consultants who meet predefined criteria to ensure and maintain high-quality standards. This includes focusing on senior consultants with significant industry experience, ensuring that clients receive top-tier expertise for their projects.
What types of projects do freelance consultants work on?
Freelance consultants work on a diverse range of projects across various industries. Common areas of expertise include strategy and project management, finance and corporate development, digital transformation, innovation, operations, IT, and marketing and sales. The project scope can vary from market entry strategies to digital finance transformations and cybersecurity implementations.
on a weekly basis.