The UK has experienced an employment miracle in the years following the financial crisis. Even during the deepest period of recession, the job market showed resilience which set the UK economy apart from other developed nations.
The self-employed have been a key driver behind UK employment growth for many years, and now make up 15% of the entire workforce. It’s clear this isn’t just a flash in the pan; ONS figures show the number of people in self-employment has been rising consistently since the early 1990s. That’s why the growth in self-employment must be understood as a long term evolution of the labour market rather than a cyclical phenomenon which occurred during or in response to the recession.
A cultural shift
The way we work is changing. There is an increased desire and ability for people to have more autonomy over their work, an ability to determine a better work life balance for themselves and an entrepreneurial desire to own and run a successful business. IPSE’s own research found that being your own boss (79%) is a driving factor in becoming self-employed.
This desire for a greater control over working life was also highlighted in the recent Self Employment Review, with nearly 80% of almost 2,000 self-employed people surveyed citing this as an advantage to this line of work. This is perhaps why the self-employed consistently express high levels of job satisfaction; nine in ten freelancers enjoy working this way, as they are able to choose the projects they work on.
A change in demographic
There has been an incredible rise in the number of women working on a freelance basis. The total has increased by almost 50% (45%) in the last 10 years. To put this in context, that’s 12% faster rate than the number of men in the sector and much faster than the rise in the amount of women in the entire work force (7%). Women are making the choice to set up their own business for lots of really positive reasons; IPSE research shows 69% of freelancers go it alone because it provides them with a better work life balance – which can be of particular importance to freelancing mothers.
The aging workforce has also been central to the rise in self-employment. Recent trends have shown the surge can be attributed to older workers delaying their retirement. Those past retirement age can take full advantage of the flexibility independent working offers by choosing hours that suit them, while remaining active and supporting their incomes.
Businesses embrace a flexible workforce
A self-employed person can be brought into an organisation to work on a short or long term project before moving on. From an employer’s perspective, their flexibility is vital.
Freelance workers enable a business to manage, and reduce, their entrepreneurial risk. This is useful in both times of difficulty and times of expansion. During a time of uncertain demand, firms find it useful to have flexible employment costs to remain as responsive and as efficient as possible.
Equally when a firm is embarking on a new project, freelancers are available to bring in expertise without incurring high costs. This is especially useful for start-up businesses, who may find themselves developing projects with slim profit margins.
A structural change
From the changes in culture and demographics, to the realisation from businesses of their benefits, the self-employed are now a huge part of our economic future.
800,000, nearly half, of the new jobs created in the economy since 2008 have been in self-employed roles. And, with over 4.6 million self-employed people in the UK, it’s time this long term structural evolution in our economy is realised – and embraced.