People Over 45 Will Soon Have Their Revenge
Why the future of consulting belongs to the over-45s
These days the job market is not easy for people over 45. In fact, the market may very well have become less friendly to them in the past decade, as traditional corporations have been looking to reduce their payroll costs by hiring younger workers, and rising digital companies believe you just can’t innovate or work hard if you’re over 30.
Age discrimination, also known as ageism, is pervasive in Europe and the US, despite the fact that it’s theoretically illegal. Older women have it particularly tough.
Meanwhile we will all be forced to work much longer to pay for our retirements and make our pension systems sustainable. These are under threat in the Western world because of the growing number of pensioners and the lower active/inactive (workers) ratio. Some Millennials even believe they may have to work until they die.
We expect to live much longer as our life expectancy has risen continuously for many decades. Thus it makes perfect sense we be expected to work longer. But is that going to be possible if it’s increasingly difficult to find employment?
Well, in all likelihood we just won’t wait for corporations to hire us. We’ll craft our own jobs instead. Indeed for qualified workers over 45, the advantages of going independent are overwhelming.
In the West, ageing comes with ageism
The proportion of over-45s in Europe and the US has gone up considerably over the past 50 years. In the UK, for example, the median age is 40.5—which means more than half the population today is older than 40. It is nearly 38 in the US, 41 in France, and 46 in Germany. An increasingly high share of our global wealth is expected to be generated by older workers whose contribution is vital to the sustainability of our social protection systems.
One might expect ageism to decrease as our societies get older. How can one possibly discriminate against almost everybody?
It’s a paradox but the more our societies age, the more our culture tends to worship youth and its attributes of beauty and strength. There are strong differences, of course, between the German culture where the elderly are a more visible part of the country’s social and economic fabric, and the French one, where the elderly are only expected to remain visible so long as they show no visible sign of ageing.
Subtle—and not so subtle— discrimination on the basis of age pushes workers over 45 who hope to join a company to go to great lengths to try and hide their true age.
“Whether the jobs were for administrative, sales, security positions or janitors, the rates of callbacks — either by telephone or by email — were much higher for the younger workers than the older ones. Discrimination, rather than lack of skills, may help to explain why older workers have longer periods of unemployment duration. Long periods of unemployment — six months or longer — have been one of the lasting problems in the wake of the 2007–2009 recession, the biggest downturn since the 1930s.” (Bloomberg, October 2015)
What’s more, it gets much worse if you’re a woman: “there is evidence of stronger discrimination for women than men in sales”, making their lot even harder to bear, as they must work harder to keep looking young and remain employed.
Silicon Valley is really making it worse
Youth culture is particularly strong in Silicon Valley. As the startup culture has spread to the rest of the world—and to other sectors—, so has the Valley’s notoriously gerontophobic culture.
As entrepreneurs have created a world of disruption in opposition to established institutions and powers-that-be, they’ve rejected the generations associated with them. When you want to do things differently, it’s just better to be unencumbered by experience and knowledge. That’s what full-stack companies are all about:
“The old approach startups took was to sell or license their new technology to incumbents. The new, “full stack” approach is to build a complete, end-to-end product or service that bypasses incumbents and other competitors.” (Chris Dixon)
“They did not know it was impossible, so they did it” is the favorite motto of many entrepreneurs (originally a quote by Mark Twain). To them, ignorance is an asset if it’s coupled with grit and creativity. Tech entrepreneurs are overwhelmingly young, and they recruit their employees among their own age group. Mark Zuckerberg once famously said, “the young are just smarter”.
“Levy, author of “Hackers” and “In the Plex,” notes that the current buzz in Silicon Valley is all about “diversity” and there’s a lot of hand-wringing going on about tech jobs being the exclusive enclave of white and sometimes Asian males. “Where are the women? Where are the people of color?” everyone is asking. Fair enough. But the one question nobody is asking is this: “Where are the old people?” Levy wants to know what’s behind the silence. Without diminishing the need for more women and minorities, why isn’t the lack of older workers — anyone over 40 — even being talked about, let alone being addressed?” (Huffington Post, “Where are all the old people in Silicon Valley?”, Octobre 2015)
Of course, as these entrepreneurs age and become parents, they tend to be slightly more tolerant toward people in their thirties. As their companies grow, the recruiters tend to hire a few more “experienced” workers, if only to enlarge the pool of talents to recruit from, but overall, these companies are not going to have many “senior” workers any time soon! What makes it worse is that all jobs related to the digital transition of our economy tend to be given to younger workers, as if their age group was qualification enough when it comes to understanding community management or digital marketing.
For traditional corporations, ageism makes economic sense
Many traditional corporations are struggling to survive the competition from new digital entrants. Many strive to become more efficient and cut costs whenever possible. Naturally payroll is a critical lever when one aims to cut costs. “Senior” workers are significantly more expensive so it’s just more rational to hire younger workers who can often do the same job for a lot less.
Mass economy corporations have developed detailed processes in an attempt to make most workers easily replaceable. In that context, there is no need for the experience or “wisdom” of older workers. Because they are often protected by unions, it’s not always easy to make them redundant, so the only solution is to make all new hires among the young.
In the world of consulting, the whole business model of big consulting firms rests on their age and seniority pyramid: the bulk of the work must be performed by young consultants who use models, grids and tools designed to be replicated. The pyramid requires that most of these consultants leave their firms after a couple of years. Turnover is vital. Only a few can make it to partner.
“Professional services firms — lawyers, accountants, marketers, consultants — are built on organizational pyramid structures. There are fewer partners than analysts, no surprise. The ratio of finders, minders, and grinders (senior, middle, junior resources) affects the types of projects they can handle and also their profitability.” (Consultantsmind)
The pyramid is these firms’ natural model. All the more so as consultants are generally happy to leave their firms after a few years:
- because they need more work-life balance;
- because they see their years in the big firms as “training” for their future careers.
The job market has not been easy for the over-45s, but profound economic and social evolutions are going to give them the upper hand again.
The over-45s are about to have their revenge
Big firms have seen their margins deteriorate over the last decade, as companies are increasingly reluctant to pay a high price for the “copy-paste” work of junior consultants. The replicable models that made the fortune of these firms are called into question: companies want the customized services of experienced consultants instead of the stereotyped services provided by younger ones. Therefore smaller firms and independent consultants have multiplied. They will tend to dominate the consulting market even further in the coming years.
Increasingly the typical consultant will be an independent worker using a platform. Platformization doesn’t only affect consulting, of course. Work relations are transformed everywhere. But they are about to change consulting forever. Platforms like HourlyNerd or Clarity have spread. They match experienced professionals with problems that companies want to solve.
Consulting may one day cease to be a profession. Scattered individuals with a diverse set of backgrounds and experiences will be able to provide a diverse set of skills, know-how and expertise to tackle various corporate problems. Companies can already find them on such platforms.
“New platforms have emerged that offer to connect qualified workers directly with the companies (or people) whose problems need to be solved. For example, HourlyNerd is a Boston-based global online marketplace that connects big and small companies with over 20,000 independent business consultants for project-based work. Clients post projects, receive bids, select experts and make payment on the platform. Another example of a platform on which high-skilled workers offer their services is CoContest, which is known as the ‘Uber of interior designers’.” (Platforms: An Amazing Opportunity For The Creative Class, April 2016)
In consulting and all kinds of other professions, talented individuals will offer companies their services as independent workers. Thus companies will not have to hire them but can buy their services when they need them, transform fixed payroll costs into variable costs, and benefit from experienced expensive talent without paying the high price of having them on the payroll. The workers, meanwhile, will be able to choose the projects they want to work on, negotiate the prices they see fit, and maintain good enough revenues in the process.
Conclusion
All in all, the pyramidal structure of big consulting firms is no longer a viable model: because companies are reluctant to pay for junior consultants, the whole business model is now under threat. Consulting is undergoing profound transformations. The archetypical big firm consultant is no longer the same. Big consulting is coming to an end.
Yet consulting is not dead! There will be more and more independent consultants. Many experienced managers and experts may become consultants AFTER other experiences to give their clients the benefit of their experience and insight. Many more will be slashers and do consulting on the side. The best days of consulting are yet to come. The over-45s will rule!
