Study predicts the freelance workforce will continue to grow
A shift in thinking, the financial toll of caring amongst NHS cuts and gradually increasing transportation costs are expected to encourage more of the UK population to go freelance next year, a study has claimed.
The insight, produced by Dinghy Freelancer Insurance, analysed patterns impacting the freelancing landscape – including rapidly approaching IR35 reform – to predict what the future of the self-employed workforce – which currently accounts for 4.97m of the UK population – might look like as we approach 2020.
IR35 reform should not be feared
Speaking exclusively to CW, Dinghy’s CEO, Dorian Zanker, said he understood the concerns limited company contractors have about further IR35 changes, but doesn’t believe the reform will stop the freelance workforce from growing.
He said: “The inherently malleable nature of the modern freelancer, comfortable working across several entirely separate briefs or different durations and doing so on their own terms and under their own contrrol” will “shield them from incoming changes and leave them squarely outside HMRC’s grasp.”
Travel costs and stagnant wages have their say
The cost of travel continues to outstrip wages growth, which will result in a rise in the number of people choosing to quit permanent employment, ditch the commute and go solo, says Dinghy. Train fares, for example, have risen by a staggering 46% since 2009 and are set to increase beyond the rate of inflation again in January. Meanwhile wages have grown by just 23% over the same period.
According to Dinghy, this widening gap could result in workers who travel into cities consider making the switch to avoid the costly commute. Contributing strongly to the growing freelance population could be the north of England. Increasing remote working opportunities could result in many northerners opting to go freelance, as they look to take advantage of southern wages.
Rise in Baby Boomers and Xennials
While many consider today’s workforce to be made up mostly by Millennials, Dinghy believes the freelance workforce – in particular – will be mostly led by Baby Boomers and Xennials by 2020. The insurance firm said Xennials (people born between 1977 and 1983) fit the freelance mould perfectly, given their ability to “strike the right balance between a strong work ethic and a laid-back attitude.” Meanwhile, Dinghy said Baby Boomers (those born between 1946 and 1964) could look to freelance part-time in order to supplement the rising cost of retirement.
Will NHS cuts contribute to freelance growth?
Dinghy said according to recent reports, an estimated 8.8 million adults in the UK are now carers. With millions of people needing to look after loved ones – whether through choice or because of cuts to NHS funding – these people will join the growing gig economy, but not necessarily as Uber drivers and Deliveroo riders, as Ben Wilks, the firm’s co-founder explained,
“As the digitisation of our lives deepens and new generations enter the workforce, there can be no doubt that the UK’s freelance and platform worker surge is underway, but it’s not solely accelerated by Uber and Deliveroo drivers.”
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