Taking steps to make self-employment in the UK more attractive could help address the UK’s skills shortage.

Data from the Office for National Statistics (ONS) shows fewer than 1 in 20 self-employed people started working for themselves after March 2019 – which is lower than previous years.

Most self-employed people have been continuously self-employed since before March 2019.

The ONS report states: “Of all self-employed people, 87% (4.3) said that they have been self-employed since before April 2018.” The report also highlights that there were 773,000 workers in the construction industry registered as self-employed, compared to 881,000 at the beginning of 2020.

Since the end of the tax year in 2019, only 3 percent (151,000) have become self-employed.

Also, the IPSE 2021 ‘Landscape’ report highlights that the number of self-employed workers in the UK has fallen drastically from 4.4 million in 2020 to 4.1 million in 2021.

Responding to the ONS self-employed data, Global Public Policy Director at the Association of Professional Staffing Companies, Tania Bowers, has raised concerns. She says: “The continued increase in vacancies being reported by the ONS is a trend we expect to see continue for some time yet.”

“However, the fact that the data does also show that the number of self-employed workers remains low following decreases during the pandemic is a real concern given the tight labour market we’re experiencing. With highly skilled resources scarce, the UK’s economic recovery rests on the ability to tap into flexible resources.”

 

What does this mean for the UK’s skills shortage?

Commenting on the tight labour market the UK is experiencing, Bowers warns: “With highly skilled recourses scarce, the UK’s economic recovery rests on the ability to tap into flexible resources.”

“It is crucial that the UK creates a dynamic and flexible workforce but in order to do so, self-employment working options need to be more attractive,” Bowers adds.

 

How can the UK address this issue?

Director of Workforce and Public Affairs at the Electrical Contractors’ Association (ECA), Andrew Eldred, says that another factor is “large numbers of self-employed EU migrants going home during COVID and not now able, or particularly keen, to return post-Brexit.”

“The UK needs an immigration policy that encourages highly skilled international contract professionals to work here,” Bowers suggests.

Legislative reform would also be beneficial. “Self-employed status needs to be defined in legislation in a way that differentiates highly skilled self-employed independent professionals from dependent contractors, workers, other variants of self-employment and the lower skilled, less independent elements of the gig economy.”

Bowers also suggests that reform is needed to “challenge current thinking around how workers and the self-employed can be financially assisted and adequately access benefits that are currently largely enjoyed by employees, including enhanced pensions, life insurance family and dependent related paid leave, training, and development.”