Number of self-employed falls again

New analysis shows the number of self employed people continues to fall in the wake of Covid.

The number of self-employed workers in the UK fall again, for the second consecutive year in 2021, according to figures from the Association of Independent Professionals and the Self Employed (IPSE).

They show the number fell by 5%, from 4.3m in 2020 to 4.1m last year. The falls recorded in 2020 and 2021 follow a 40% increase in the number of self-employed workers seen between 2008 and 2019. IPSE’s Self-Employed Landscape report also found that the self-employed sector contributes an estimated £303bn to the UK economy per year.

IPSE chief executive Derek Cribb said: “It is worrying to see that the number of self-employed workers has fallen for a second year running, especially given the significant contribution the self-employed are known to make in periods of economic recovery.”

He added that the pandemic, Brexit and changes to IR35 tax rules that govern freelancers have “seriously impacted the sector and have sown seeds of doubt and uncertainty throughout the freelancing industry over the past two years”.

Meanwhile, a survey of 450 businesses by freelancer website PeoplePerHour shows increasing demand for quality freelancers. It found 84% of employers believe freelancers can make a positive difference to their business, with nearly half (45%) more focused on quality than cost when hiring. A fifth (20%) said they would pay whatever rate it takes to get the best person for the job.

Demand is reported to be highest in marketing and communications while areas such as Growth Hacking (2050%), Influencer Marketing (1618%), Content Marketing (985%), and Instagram Marketing (1109%) have seen a huge rise in the number of projects posted on the platform in 2021 compared to 2020.

PeoplePerHour say retail businesses, where there are many staffing shortages, were most interested in hiring freelancers, with 25% increasing their freelancer budget since Covid started, compared with 18% of all businesses overall. Retailers also expect freelancers to become more important, with 83% looking for temporary help in the future, compared with 80% overall.