Today, about one in seven of those in employment are self-employed. Self-employment increased rapidly during the 1980s and again over the last 15 years. So why is this and what are the implications for employers?
While the self-employed have seen the gap in earnings with employees widen to their disadvantage, they nevertheless, have the very highest levels of job satisfaction: they derive greater value from the nature of their work and say they have more control over it, appearing to find it easier to manage a good work-life balance.
In the past it tended to be older males who were self-employed, but this is now changing with a rise in female and part-time self-employed, and by growth in a broader range of industries and occupations providing personal services and professional advice.
Despite recent recessions only a small proportion of the increase can be attributed to the inability to find dependent employment, although in some cases job loss was the event that originally led some people to switch to self-employment.
So what are the implications?
Employers probably need to pay the self-employed more attention. It is clear that business owners and HR departments must manage a more diverse workforce that may consist of self-employed workers.
Having clear HR policies can help bring clarity to the employment relationship and expectations about behaviour. It is also important that employers are clear who are its employees and who are contracted to provide services through businesses or as ‘freelancers’.
If you have any questions about the employment status of your people or would simply like reassurance about your current employment practice, please get in touch. We’d be happy to advise.