Contractors and freelancers may be reeling from 2020, but the organisations that employ them want them to survive. These sectors should seize the day and use their skills to support their customers’ businesses through transformations in product, digital footprint, process, remote working and strategy.
This year has been tough for most people.
In particular, 2020 has been a difficult year for the B2B market in the UK and specifically independent consultants, contractors and freelancers, because COVID-19 is just one of many challenges they have faced.
First there was the uncertainty caused by a general election in the UK at the end of 2019, and then by Brexit early in 2020. Our members at nextfree.co.uk saw a slowdown in demand over that period greater than the normal "holiday season" effect.
Next, there was confusion, and in some sectors, massive market disruption, due to the expected enforcement of IR35 reforms in April (the reforms were postponed until April 2021 due to COVID-19). Big institutions placed blanket bans on engaging contractors and terminated most of the contracts they'd already agreed, effectively flooding the market with available expertise for the first time in many years.
Finally, the problems were compounded in March by the global pandemic and associated lockdowns around the world, causing a massive drop in demand for contractors, freelancers and consultants across the board, and across borders. Many businesses faced with uncertain futures also dropped their interim workforce as the first of their cost-cutting measures.
In short, 2020 has turned the contract and freelance market on its head.
For well over a decade, the market had been unevenly balanced with far more demand than supply could meet. But in the space of a few short months, it has transformed into a market of huge over-supply and very low demand.
The changes
The data gathered by the COVID-19 Impact Indicator study reflect two key changes that the market would expect to experience:
Most independent professionals are uncertain about their future.
Those who had the foresight to plan for the worst (something anyone working for themselves should be doing) will be able to ride things out and support themselves and their families in the short to medium term. But even they are uncertain about their longer-term prospects given that no-one can predict when, indeed if, things may return to "normal".
Those who didn't plan, or were at the start of their journey running and building their own businesses are in more dire straits.
But, there is a thread of hope running through our findings….
For those who have kept their businesses going through the upheaval, there are opportunities on the horizon.
Why? As more and more people come to terms with how to live day to day with the crisis, and businesses that have survived start to feel more confident in their own longevity, there will be a growing demand for doing things differently.
This survey shows that people want the organisations that they work with to transform as a result of the pandemic, and not just survive. They are demanding change. And with change and transformation comes a need for expert support. Whether it be in relation to developing and implementing new business processes, digital transformation, new product development, or help with entering new markets and serving new customer segments, there will be many new B2B opportunities.
For those who can align the services they offer to meet this new demand for expertise, there could be light at the end of the tunnel.
Although only 20% of surveyed organisations have existed for 2 years or less, they have around 20% more enthusiasm for support for new and extended services to deal with the pandemic. This could be influenced by a combination of capability/resources but also about attitude to change.
The opportunities
As business confidence returns we believe there are four immediate areas of opportunity for companies that offer B2B services. We also suggest three additional areas B2B service providers could explore as emerging opportunities.
Immediate opportunity:
Digital transformation
Few, if any, organisations can now consider digital channels as optional extras that they should explore. The lockdown has shown how a coherent digital presence and strategy is now critical to all organisations. Organisations that have survived by expanding their digital presence (or establishing one) will need help improving those new offerings. Organisations that haven't previously had a digital presence will need to catch up, quickly.
Support the thriving
Organisations that have thrived during lockdown will need to find ways of maintaining their newly expanded audience and of building on the opportunities it presents them with. They may need help with designing and implementing new business processes, rationalising and optimising newly developed offerings or simply support in the form of an extra pair of hands or two to help deal with demand. Getting that help and support from service providers will buy them the time they need to work out what a new-normal looks like, and what they need to support their continued growth.
Help organisations to mitigate risk
Organisations that are still shaken by recent events, but know they need to take action now or risk being even more badly affected over the coming months, will be looking for support. Helping these organisations work through what they need to do to meet the changing demands of their customers will offer multiple opportunities to sure up businesses that could then become longer term clients
Wake and support the sleeping giants
Organisations that have been on pause while they waited out the crisis will need to start projects up again and at speed to catch up with missed deadlines and milestones. Engaging third party expertise will offer a quick way of increasing capacity in the short term to make up those gains.
Medium to long term opportunities:
There is a growing consensus in many sectors that our collective experiences this year will be a catalyst for more substantial long term changes in working practices.
If companies are to thrive in this evolving and uncertain world, they will need a more flexible approach to where and when their teams work.
The accelerated switch to project based work
In the face of uncertainty, a flexible workforce is highly attractive to any organisation. Being able to engage people on short-term projects, with definable outcomes, as and when they are needed becomes a competitive advantage. Contractors and freelancers are well placed to take advantage of this need.
Teach organisations to work remotely
Thinking outside of the immediate needs, there will also be opportunities for people who are experienced at working remotely and on short term, outcome based engagements to help coach, educate and train other businesses and their teams about how to work in this way.
As more and more organisations realise that remote working is not likely to be a temporary thing for a lot of their workforce, and employees start requesting a more blended, flexible approach to where and when they work, many organisations will need to rethink how they operate.
Organisations that have a mix of permanent and non-permanent employees are 25% more likely to want assistance from new services than mostly non-permanent and almost 20% more likely to want assistance from new services than maily permanently staffed organisations.
Learning from those who have been working that way for years would be a good place to start that transition.
New tools, products and services to support remote working
Building on that thought, there could be opportunities for new tools, products and services to support a wider adoption of flexible working too. This could create a demand for new greenfield projects within bigger organisations to design and develop new software and applications to support their workforces. Zoom, Slack, Teams, etc are all great, but won't be enough for some organisations.
B2B service providers who can help design, develop and deliver these types of tools and products should be seeking out these opportunities in the coming months.
While we do not want to downplay the huge negative impact the last few months has had on people, families and businesses across the world, we are optimistic about the future of the contract and freelance market and the wider B2B market more generally.
If you operate in this space, hang in there. With big changes come big opportunities. And the great news is that small and medium sized companies are best placed to quickly adapt and make the most of those opportunities.
