Experts Reveal What The Future Of The Self-Employed Is

Wha the self-employed job market tell us about the future of working life

In this post, we take a look at ongoing developments in the jobs market, including among entrepreneurs and freelancers. We also present insights from a range of experts on what these changes can tell us about the future of working life.

From a rise in new business registrations to the so-called ‘Great Resignation’, the employment market is undoubtedly going through major changes - many of which have been triggered or intensified by the COVID-19 pandemic.

The Great Resignation

At a time of significant uncertainty, when many people were being made redundant because of business closures and plummeting revenues brought about by the pandemic, you might expect that those in employment would be doing all they could to stay there. But in fact, the opposite seems to have happened. Despite the fragile nature of the jobs market, people have been resigning from their roles in huge numbers. According to figures from the Office for National Statistics (ONS), job moves hit a record high of 988,000 in the last quarter of 2021. The organisation suggested this was driven by resignations rather than dismissals.

In addition, research carried out by polling company Ipsos earlier this year found that nearly half of British workers had actively thought about leaving their jobs over the previous three months. More than a quarter (26%) had considered quitting, while 29% had gone as far as looking for another job. Over one in 10 (13%) had applied for a new role, while 6% had spoken to their employer about resigning. And it seems to be young people who have the itchiest feet when it comes to employment. Among those aged 16-34, 46% had considered quitting or had looked or applied for a job outside of their companies. This compared with 37% of 35-54-year-olds and 23% of people aged 55-75.

These findings were echoed by a survey of 1,200 UK workers carried out by artificial intelligence specialists Soffos.ai, which revealed that more than two-fifths of respondents planned to change jobs in 2022.

In an article for NBC News, Dr Anthony Klotz, associate professor of management in the Mays Business School at Texas A&M University, suggested there are several factors contributing to the ongoing Great Resignation. One of these is the fact that as the pandemic struck, many of those who were previously thinking about switching to a new job chose to stay put because of the uncertainty. As the pandemic has started to ease, these would-be quitters are now enacting their plans.

Dr Klotz went on to note that COVID-19 has also forced many people to re-evaluate what is important in their lives, and this introspection is resulting in major changes - such as deciding to re-train, spend more time at home with family or retire early. This idea is backed up by polling carried out by LinkedIn. Of 25,000 people surveyed by the professional networking platform, 74% said the pandemic had made them reconsider their job or career choices.

A mixed picture for entrepreneurs and freelancers

Another feature of the pandemic has been an increase in the number of new businesses being set up in the UK. Analysis of Companies House data carried out by small business lender iwoca found that 340,534 businesses were registered between January and June last year, compared to 257,243 during the same period in 2019. This represented a rise of 32%. London saw the biggest increase (59%), followed by the West Midlands (49%) and the North East (28%).

2020 was another strong year for start-ups, with data compiled by digital payment provider Tyl suggesting that 770,000 new businesses were created during the 12-month period. And over this time, when lockdown restrictions resulted in mass closures on the high street, entrepreneurs made the switch to online selling en masse. The growth of mail-order and online retail businesses outpaced all other sectors.

The picture for freelance activity was more mixed. In positive news for those striking out alone, the Association of Independent Professionals and the Self Employed (IPSE) has revealed an upward trend in pay for freelancers. According to the organisation’s Confidence Index, the average day rate charged by self-employed workers stood at £537 in Q3 2021. This was the highest rate recorded since the index was established in 2014.

Another notable trend has been the increase in the number of people working ‘side-hustles’, in other words doing freelancing on the side while also being an employee. Statistics from PeoplePerHour suggest that almost a fifth of freelancers are now self-employed while simultaneously working as an employee.

However, ONS figures reveal that the number of self-employed people in the UK dropped from a high of over five million in 2019 to just under 4.2 million by the end of 2021. According to futurologist Dr Ian Pearson, this may in part be because of a lack of government support received by many freelancers during the pandemic. That said, Dr Pearson also suggests that this trend is likely to be temporary and part of a ‘churn’ of freelancers, with more people likely to quit employment and become freelance as we move out of the pandemic. 

What does the future hold?

We asked experts in a range of fields to offer their analysis of employment trends over the pandemic, and to highlight what this can tell us about the future of work.

Calum Bannerman - Historian

Calum Bannerman

Calum offers historical expertise, drawing connections between similar events from the past and offering insights on what current trends mean for our present and future workforce.  

“With times of uncertainty come opportunities for introspection and re-evaluation of self-worth. This has been true throughout history. When the bubonic plague hit Europe around 1346, it wiped out 40% of the population. The resulting demand for, yet shortage of, labour put survivors in a strong position to demand changes to the workplace, including increased pay (which they got). After the 1918-19 Influenza pandemic, which infected more people worldwide than COVID-19 has to date, there was a similar reassessment of the social and work environment, especially for women, who achieved partial suffrage in the UK in 1918.

Typically, however, pandemics cause drops in resignation rates alongside a rise in unemployment and demands for better work conditions. Whereas only economic boom times (such as during wartime, or the dot-com bubble of the 1990s/early 2000s) tend to see a significant rise in resignation rates (since resignation requires optimism about your job prospects). The COVID-19 pandemic, quite uniquely, saw a mixture of both: massive redundancy, followed immediately by a steep rise in resignation rates - at a level similar to 1945 and 2000 - and demand for improved working conditions.

The reason for this anomaly lies in our higher levels of wealth and health relative to historic pandemics, as well as the timing of this social flux in relation to trends that were already underway. During the 1918 ‘Spanish Flu’, for example, workers could not afford to resign from work and could not work remotely (and thus safely). In contrast, government packages, furlough schemes, greater general wealth, and the ability to work from home gave many people today the safety net with which they could reassess their careers. At the same time, momentum had been building since the 1980s for a global job market transformation, thanks to the advent of computers, electronics and the culture of workplaces like Silicon Valley.

The Great Resignation may signal the end of ‘the job’ era - in which people were expected to work for big businesses for a lifetime. For most of human history, people have, in contrast, been essentially self-employed. Even under feudalism, during which serfs worked the land for landowners, most families maintained separate household jobs to bring in extra income. Only from around 1840-1980 have the majority of humans worked exclusively for others in ‘employed’ positions.

Armed with technologies allowing us to work remotely and join an online community of like-minded individuals, people resigned in droves during COVID-19 to find new work which facilitated a better overall quality of life. In doing so, they were accelerating a trend away from the big business-big labour job market of the industrial era, and toward a self-reliant, flexible and fluid job market akin to that enjoyed throughout most of human history. I think that in the aftermath of the COVID-19 pandemic, Millennials and Gen Z workers (replacing older labourers who have retired early) will be more vigilant of workplace maltreatment, and will continue to push for higher wages and more autonomous, remote, often self-employed careers.”

Carole Ann Rice - Life coach (The Real Coaching Co - realcoachingco.com)

Carole Ann Rice

Carole talks about how the pandemic has influenced many people’s definition of success, encouraging them to reconsider their relationship to work and how they can balance it with other aspects of their lives.

“People have conventionally associated success with more money, or having excess money. However, there has been a change in what that means to people - the growing association of success with working three days a week and having more time for the family or having a career that allows a morning run, workout or time for hobbies. It’s the lifestyle and freedom that is important. With that change in mindset, being your own boss has come to the fore since the pandemic and people can see how hard their lives were before - little family time, stress and no work-life balance. 

I can also observe that people are seeing more opportunities to use their expertise to their own ends. Technology means you can work from anywhere, which is a huge draw. Also, having portfolio businesses - selling products/marketing/photography/coaching - you can wrap up several strands of your expertise under one umbrella and create a hybrid business stating all your talents.

Women, in particular, thrive when they are their own bosses. Having their own autonomy and making their own money is deeply satisfying, but self-employment allows them to craft a creative and afford a flexible way of working that accommodates family, school runs and holidays.

While there are some downsides to self-employment, like feeling isolated, wearing many hats (i.e. being your own accountant and IT department) and overworking because you love what you do, few people regret going freelance and [most] seem happier as they are their own boss.”

Eloise Skinner - Entrepreneur (www.eloiseskinner.com)

Eloise Skinner

Eloise discusses the possibility of an increase in people wanting to be self-employed, allowing more workers to break away from the traditions of having a single career. She sheds light on how she has been able to develop several career paths based on her own personal interests.

“I can see how the pandemic years have encouraged and will continue to encourage a lot of people to seize opportunities as they arise, making the most out of new ways of working. As such, people may be more inclined to leave their jobs to start their own ventures in the future. From personal experience, I developed a lot of interests and passions outside of law! Corporate law can be a very demanding career, and I wanted to take the opportunity to explore my other interests before committing to a single career path. Instead of one career path, I have been able to establish several based on my interests, [including] offering therapy, teaching wellness and fitness classes, writing a book, modelling, running my own podcast and more.

Self-employment offers the freedom to choose where, when and how you work, however, while it sounds great, it can be challenging - it relies on a lot of personal initiative and responsibility, and it takes a lot to stay motivated when you don't have a team around you. The other element is the purpose behind your work - when you’re self-employed, it can feel easier to stay connected to the ultimate purpose or meaning of your work. It can sometimes be harder to do this within a big company structure. If anyone is considering quitting their job and becoming self-employed, it is most important to figure out exactly what you want out of your working life. Ask yourself questions like, ‘Is it a particular lifestyle, or work-life balance, or salary goal that I want?’. Once you know your ultimate purpose, you can steer your career planning in this direction. It sounds obvious, but it’s helpful to revisit those first fundamental questions before you take the leap!”

Dr Ian Pearson - Futurologist (Futurizon)

Dr Ian Pearson

Ian offers his thoughts on the causes of the freelancer churn we’ve witnessed during the pandemic, explaining why we have seen a drop in the number of freelancers in the past two years and why he thinks more people will become self-employed in the future.

“I think we are likely to see a lot of people leaving big companies and wanting to go freelance because they don't want to do the commute. People have got very used to working from home for the last couple of years, and then the company’s asking them to go back to an office again, and they’re facing [a] one hour commute each direction and all the expense and annoyance that goes with that. A lot of those people will be tempted to go it alone if they feel that they can.

On the other hand, set against that an awful lot of people who were freelance before the COVID lockdowns, some people with small companies of their own, didn’t qualify for government support. A lot of those people have opted out of the workforce… That in the short term might reduce the number of freelancers. But on the other hand, it's creating vacancies for those freelance opportunities, [and] some of those people that used to work in offices would probably be quite happy to take over. So what we're seeing really, I think, is a churn of the freelance community, a lot of people leaving because they didn't get the government support and they couldn't afford to carry on with their businesses or their businesses went broke because of lockdown. And they’re being replaced by new people who used to be working in offices and no longer want to for whatever reasons, so that churn will be quite significant, I think.”

Rob Rees – Divisional Director, Markel Direct

Rob Rees

Rob explores how ways of working have changed over the last two years, and what opportunities this presents for freelancers going forward

“The last two years has seen widespread adoption of remote working and video meetings in businesses of all sizes, many of which did not use this technology prior to 2020. This presents a number of opportunities for freelancers now and in the future.

“One key benefit for freelancers is that they have better opportunities to work with clients who they previously couldn’t, due to the geographic distance between them. Technology and video conferencing has reduced the importance of businesses having a workforce who are local, and moved focus to finding the right person for the role – regardless of where they are located. Whilst we don’t see a time when face-to-face meetings with clients become non-existent, this shift in mindset by hiring businesses enables long-distance freelancers to be considered for projects they would not have previously.

“Additionally, freelancers will enjoy even greater flexibility to live and work where they choose. This will apply to those who seek a lifestyle change – for example, living in a more rural part of the country. However, it also applies to those looking for adventure; with international travel opened up, we expect to see growth in the number of ‘digital nomads’ who combine travelling to different locations with working from coffee shops, co-working hubs and hotels.

What do you think current job market trends tell us about the future of work? Join the conversation on #SelfEmploymentGrowth.

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