Does ‘Day Rate Freelancing’ have a future for those working in change and transformation?

This is a question that is on the lips of many project, programme, change and transformation professionals at the moment and as often is the case, there is not a ‘Yes’ or ‘No’ answer.

Undoubtedly the impact of the pandemic and the new rules around IR35 have taken their toll on the volume of opportunities out there where organisations are actively looking for day rate contractors, but whether this is more due to the pandemic or IR35 is more difficult to assess.

As organisations pulled back on their change and transformation projects as the Pandemic started to take hold, the resultant surge is ‘supply’ (people looking for roles) significantly outstripped ‘demand’ (organisations looking for people to join them).

Basic economics prove that when supply outstrips demand, prices drop and the power swings towards the buyers rather than sellers.

In my opinion, this has had a big impact on the contracting market as organisations have spotted an opportunity to reduce their overall costs by offering either permanent or fixed term contracts when in the past they would have relied on day rate contractors.

Often, these very same organisations have used ‘IR35’ as an excuse for this new approach, but given that it should be relatively simple to demonstrate that most projects that we get involved with should be ‘outside of IR35’, given the ready supply of people, organisations have been able to be quite firm in their approach.

It will be interesting to see how their approach changes in the coming months as demand starts to outstrip supply and the power starts to move more towards the individual.

One area that has thrived during this period and I suspect will continue to grow is for organisations to structure these type of arrangements into more of a consulting engagement rather than a ’employment’ type arrangement.

Initially, organisations reverted to using the bigger, more traditional consultancies but have quickly realised that this can be costly and in many cases the experience of the delivery people is not at the level that they are expecting.

This opens up opportunities for those individuals who do not want to go into a fixed term contract or indeed move into full time employment. Furthermore, for those that are looking to transition away from the ‘project to project’ existence, then the consulting model may be something to consider.

Whilst some people make the transition easily, others find it more challenging as the routes to market (i.e. how to find clients that are willing to engage you) are different. Furthermore, it can be a lonely existence initially when you have so many different elements to get involved in, without much available help!

The #TLH 1% Club VIP Programme has been developed to help those who have a desire to launch and grow a consultancy practice. Through 121 strategy sessions, 121 and group coaching sessions, step by step guides/ templates and training, we work in true partnership with you to help you make the transition and integrate our 4 phased approach;

Momentum – a 90 day sprint to get the foundations in place, win that first engagement and achieve a monthly revenue target of at least £10k

Accelerator – a 6 month approach to integrate automation, structured sales and marketing to generate a regular flow of incoming opportunities designed to drive your monthly revenues above £25k

Optimise – working with you to build our your practice, implement appropriate structures, technology and people to enable your consulting business to scale above the £100k pm mark

Leverage – In this phase, the focus is on building out your practice to a point where you can, if you like, exit and realise significant wealth creation.

If you’re interested in exploring this further and understanding whether the transition to a consulting business is for you, book a 121 strategy session, where we will explore your options and help you to outline a potential plan of action.