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With a Shortage of Top Talent, Senior Executives Are Increasingly Going Freelance

March 24, 2008
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The shifting demographics of the workplace are opening the door to a new kind of freelancer: the temporary senior manager. As the shortage of senior managers grows, executives with new bargaining power are choosing to go on their own and embrace the flexibility of the freelance life.

“I wanted to have predictability in my schedule and be able to focus on clients with whom the chemistry and fit were right,” says Brenda Smith, 46, who left a branding agency five years ago and went on her own. Her consulting firm in Manhattan pulled in more than $1 million in revenue in each of the past two years. She also adopted a daughter.

“Now I’m able to leave work and embrace another part of my life, which is motherhood,” she says.

Linda Stewart, a former financial company executive who runs a Boston-based agency that places senior-level managers, has a roster of 200 people, many with C-suite experience. She gets hundreds of calls from those interested in making the move to freelancing.

Freelancers might arrange to work only six months of the year, to work seasonally between warm and cool climates, or to come on board only when a project is particularly enticing, says Stewart, whose agency is called Epoch.

Meanwhile, companies once reluctant to turn over management tasks to outsiders are coming around to what some experts say is an emerging new economic model in which managers are hired on a project basis. Companies are changing in part because they have little choice, and in part because they see the advantages of using temporary managers.

“There are a lot of people vying for limited talent and trying to move the industry forward on a fast-paced basis,” says Stacey Panagakis, vice president of client services at financial services company TIAA-CREF. “That makes this arrangement very appealing.”

Half of the 115 companies surveyed by corporate psychology firm RHR International for a 2005 white paper reported that they expect to lose 50 percent or more of their senior managers by 2010. One in six companies said they expect to lose 75 percent.

In surveys, baby boomers in particular report that they would rather work part time or on their own terms rather than work full time or retire. “It’s a matter of adjusting to the demographics,” Panagakis says.

Freelancers do have to be able to adapt quickly to a company’s culture to successfully manage in it. Stewart vets her clients carefully.

“What’s fascinating for me is how many people there are with so much experience and so much to offer but who don’t want to be in that 9-to-5 office environment,” says Smith, who employs independent workers.

Sometimes, as in Smith’s case, freelancers make more money. Other times, money is not the point.

Kathy Cuocolo, a former State Street Corp. executive who lives in Concord, Massachusetts, started working as an independent consultant for mutual funds—mainly in New York City—three years ago.

The upside is that she works fewer hours now and has been able to spend more time with her son and her community. “You’re more nimble and free to choose who you want to work with and the hours you want to work,” Cuocolo says.

The downside? Less pay, and “after 22 years in a corporate environment, I had to learn how to print my own envelopes,” she says.

Filed by Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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