MBAs Predict The Future
MBAs Predict The Future: Sharing Economy Drives Freelance Consulting
The sharing economy is uprooting the traditional employment market. MBA students are increasingly turning to project-based consulting work.
We are in the age of the sharing economy. Disruptive companies are shaking up established businesses in travel, accommodation and services and are uprooting the traditional employment market.
Companies are using digital platforms to give customers access to, rather than ownership of, assets and these increasingly take the form of business services. PwC predicts that the sharing economy could be worth £9 billion by 2025 in the UK alone.
Competitors at the forefront of this economy – including peer-to-peer lenders and car sharing groups – are disrupting traditional industries and recruitment is the newest sector caught in its crosshairs. Advances in technology and mass social change have created nations within nations of self-employed workers.
Self-employment in the UK is higher than at any point in past 40 years, according to the Office for National Statistics. The Freelancers Union, a New York-based group, estimates that 53 million people carry out freelance work in the US – a third of the workforce.
“The self-employment route can provide students [with] a way into a new sector and a valuable opportunity to develop new knowledge, skills and experience,” says Karen Siegfried, executive director of the MBA at Cambridge Judge Business School.
Last year 30% of students at Cambridge secured temporary work engagements lasting between 6-8 weeks. Consulting firms – including Bain and AT Kearney – led much of this growth but the dominant short-term hiring sectors were tech, media and telecoms, says Karen, in companies such as BT, Google and PayPal.
“Taking on staff on a project-by-project basis is an increasingly appealing option for many firms,” says Sotirios Paroutis, assistant dean for the full-time MBA at Warwick Business School.
“[In the] world we now operate in, organisations are increasingly looking for a flexible workforce,” he says.
Since the financial crisis many companies have faced increasing volatility and uncertainty.
MBAs can provide an independent and objective viewpoint – something that insiders often can't.
“This is a great way for MBAs to apply their learning in a new business environment and at the same time deliver value for a company,” says Sotirios.
A BusinessBecause survey of MBA students and applicants found that a portion believe work will be carried out on a project basis, with graduates forming a consultant pool instead of working for one employer.
A study by the RSA Action and Research Centre found that 600,000 micro-businesses have already been founded since 2008 – and 95% of those set up in the past decade are one-person outfits.
Much of this growth is led by management consultants operating as lone rangers.
Digital staffing groups for more senior level consultants – often populated by MBA students – are fast moving into the new sharing economy.
Rob Biederman is the co-founder and chief executive of HourlyNerd, a flexible consulting platform born at Harvard Business School. In two years the company has grown to have more than 10,000 consultants on its platform, 95% of whom are MBAs.
He says there is demand from companies for multiple reasons: fees are cheaper than large management consulting firms while its users are often of a similar calibre.
“Students are able to hone their skills and add to their experience by doing projects for businesses while in school,” Rob says. They are also able to bank fees, which Rob insists can provide as much income as a permanent consultant might earn at a large firm.
“HourlyNerd projects do not have high overhead fees and the money goes directly to the consultant,” he says.
The platform is but one of many. Other digital disruptors include SkillBridge, and MBA & Company, which was founded by an MBA graduate of IESE Business School and has 20,000 consultants in its network.
But by working multiple projects, freelancers can learn about a host of different sectors, products and companies.
“The consultancy route provides MBA graduates a degree of autonomy and a great deal of variety,” says Sotirios at Warwick.
But it is not just consulting projects that are gaining ground with MBAs. Companies like Virgin Media, IBM and PepsiCo have been hiring for temporary projects, says Sotirios. “Very quickly they can develop links with blue-chip companies that look impressive on their CV.”
In many instances it leads to MBAs getting a full-time job offer with that company, because of the value they have delivered through their project – a “try before you by” test. “It can be a ‘win-win’ situation for both parties,” says Karen at Cambridge.
Yet many others prefer to tough it out alone. In a sign of things to come, the RSA forecasts that the number of people working for themselves is set to outstrip those working in the public sector by 2018. For many business students, the future is freelance.
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