The ups and downs of self-employment in a time of turbulence

Self-employment has fallen during Covid for a variety of reasons, but freelancing rates are up in some sectors. It’s a mixed picture which reflects a turbulent time.

Self Employed


Figures released yesterday by the Association of Independent Professionals and the Self Employed [IPSE] highlighted the continuing fall in the number of self-employed workers in the UK – the second consecutive annual fall after years when numbers have been growing, particularly among mums. IPSE blames a combination of the pandemic – which hit many freelancers particularly hard, with work reduced or non-existent and financial difficulties widespread, Brexit and changes to IR35 tax rules.

At the same time PeoplePerHour released data from its site showing that employers in some sectors are willing to pay freelancers whatever rate it takes to get the best person for the job. They say a survey of 450 businesses shows 84% believe freelancers can make a positive difference to their business, with nearly half (45%) more focused on quality than cost when hiring. A fifth (20%) said they would pay whatever rate it takes to get the best person for the job. Their own experience of posting project work shows demand is highest in marketing and communications, particularly in digital comms, with the retail sector being the most likely to have increased their freelance budget since Covid. Eighty three per cent of retail businesses said they would be looking for temporary help in the future, compared with 80% overall.

The picture seems similar when it comes to pay with certain sectors where there are notable shortages of staff with the right skillsets employers are willing to pay over the odds, including big starting bonuses. However, despite all the headlines about rising wages and the Great Resignation many workers are not seeing big pay boosts or at least not bigger than the rate of inflation.

And the IPSE figures highlight the insecurity associated with self employment, particularly at a time of great turbulence. While it is true that employers who are having difficult getting the right permanent staff will be increasingly in need for temporary fixes and while a rise in self employment followed the last big crisis in 2008/9 the picture is very varied. In the last few years self employment has also been used as a way to cut business costs, which has brought in its wake calls for more rights for the self-employed as well as IR35 legislation which aims to clamp down on disguised employment. The only problem is that the IR35 does so in such a blunt way that it has led to employers imposing blanket bans on hiring self-employed contractors.

For many the best path is the portfolio approach, combining the security of employment or multiple employment [not putting all your eggs in one basket] and self employment on the side. has spoken to many women who have started and grown new businesses on the side of their existing work or during maternity leave until they feel secure enough to commit to their business full time. The problem is that legislation hasn’t yet caught up with how people’s lives are changing and that is particularly so when it comes to maternity pay. In the next months, with rising household bills, many will be looking to supplement their income with extra work on the side, childcare permitting. We may well see self-employment, particularly freelancing, increasing as a result as people think more creatively about how to boost their income.

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