While it is undoubtedly true that the financial crisis of 2008 unleashed a cascade of economic destruction and unemployment in its wake, the number of people freelancing and contracting through umbrella companies or limited companies has been steadily rising, according to new research from the PCG.
The PCG’s Exploring the UK Freelance Workforce 2011 report reveals an impressive 12% growth in the contracting and freelancing market since 2008, which translates into 1.56 million people now working as contractors and contributing a walloping £100 billion to the economy in the process.
Despite (or possibly because of) bleak economic conditions, 170,000 extra people have opted for contracting and freelancing since the PCG’s original report from 2008 (Defining and Estimating the Size of the UK Freelance Workforce). The same methodology was used in both studies, so the latest findings are verifiably significant.
The rise in contractor numbers, however, runs parallel with another less welcome surge – unemployment caused by the drying up of PAYE/salaried jobs has soared by an eye-watering 49% over the same period. Some of these casualties have taken the intrepid step of taking the contracting option: freelancers and contractors now account for between 5% and 6% of the UK’s total workforce. This has not yet reached the proportions seen in countries like Australia and the USA, but it is a sizeable constituency even so, which policymakers will find it increasingly difficult to ignore.
Employers polled in the study said that economic uncertainty was increasing their use of contractors and freelancers, with a third hiring them on a weekly basis and 41% planning to hire contractors over the next twelve months.