Significant rise in self-employment shows way we work is changing

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The latest ONS labour market statistics show that there has been a sharp rise in those choosing self-employment, demonstrating a significant shift away from traditional employment.

The number of people in self-employment has now reached an all-time high, increasing by 172,000 in the last quarter of 2013 to reach 4.37 million – making up 14.5% of the total UK workforce. This change is also reflected in independent research by PCG, the membership organisation for independent professionals, which shows an increase of 63% in people choosing to freelance, a sub-set of self-employment, in the last decade.

According to PCG, this rise in people choosing to be their own boss shows the way we work is changing. This is likely to lead to long-term adjustments in the way people are hired, shifting from traditional employment contracts to short-term contracts on a project-by-project basis as and when specific skills are required.

Georgios Nikolaidis, PCG’s Economic Policy Adviser, said: “This latest sharp increase in self-employment is more proof that the way we work is changing. The rise in those choosing to go into business on their own account is now outstripping the growth in traditional employment at a rate of almost three to one. The persistence of self-employment, growing uninterrupted from 2004 onwards, points towards a structural change in the labour market rather than a cyclical reaction to the financial crisis.

The future of working and how businesses should respond to the change was addressed in a 2013 research project undertaken by Professor Leighton at the University of South Wales. The report argued that as freelancing takes off across the EU, the distinctive needs of independent professionals should to be taken into account, and that an innovative approach needs to be taken when recruiting freelancers. Other recommendations include providing practical, online training for freelancers in a flexible manner which relates to the nature of this way of working.

According to Georgios Nikolaidis, the economic signifiers point to this growth becoming a fixture of ONS reports on the labour market over the coming months and years:

“Our research shows that the rise in those choosing to go freelance has been building momentum steadily in recent years despite the changing economic conditions. This can no longer be considered a ‘fad’ or a trend which is dependent on certain economic drivers. It is a sea change in how we approach the concept of work in this country and it is only going to gain momentum.

“More people want to be their own boss and take charge of their own personal ‘brand’. What’s more, businesses large and small are realising that incorporating this flexibility into their business model stimulates growth, mitigates risk and unlocks serious competitive advantages.

“Freelancing is no longer the preserve of distinct professions or specific age groups. Independent professionals are now everywhere and their importance to our economy cannot be underestimated.”

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