New figures show that even during five years of sluggish overall wage growth in the UK, freelancing and contracting professionals saw their hourly rates rise six times faster than those of their conventionally employed counterparts between 2010 and 2015.
The new data, which was provided by the UK’s biggest online freelance marketplace, PeoplePerHour, was analysed for hourly rate comparisons by a team of researchers led by Professor Peter Urwin at the University of Westminster Business School. The resulting findings show a marked difference between the income growth of salaried employees and freelancing/contracting professionals during the 2010-2015 period. During this five-year window:
- Employees saw an average increase in hourly pay of just 4.52 per cent, while freelancers/contractors saw their hourly rates burgeon, rising by 26.83 per cent.
- Freelancing and contracting professionals began the five-year period in 2010 with an average hourly rate of £16.34. By 2015, this had surged to an average hourly rate of £20.73, which was £5.47 (36 per cent) above the average rate for their conventionally employed counterparts.
Researchers used data from the Annual Survey of Hours and Earnings (ASHE) to compare hourly rates between freelancers/contractors and conventional employees.
Commenting on the findings, PeoplePerHour founder and CEO Xenios Thrasyvoulou said: “In 2010, in the midst of the financial crisis, freelancers on PeoplePerHour were already earning more than their employed counterparts, and that gap has significantly widened.
“The fact that freelancers using our platform are significantly out-earning the national average wage is a reflection of two factors: the quality of the work delivered and the growth in demand from businesses wanting to hire skilled professionals on a freelance basis.”
Mr Thrasyvoulou noted that increasing numbers of highly skilled professionals are striving for an improved equilibrium in their work-life balances. As a result, many are choosing to turn to freelancing and contracting to command higher hourly rates and achieve the autonomy that they hunger for.
Simultaneously, with the rise of the gig economy being one manifestation of this trend, Mr Thrasyvoulou noted the growing tendency of employers to capitalise on the many benefits of the freelancing and contracting workforce. Freelancers and contractors, he observed, are free to pick and choose the clients whom they wish to work for and negotiate an hourly rate that they believe themselves and their skills to be worth.
For their part, businesses have shown themselves willing to pay for the expertise, high-end skills and flexibility that this workforce is able to deliver.