What’s the allure of earning less and working fewer hours?

The growth of solo self-employment

The trend for remote working was well established before the pandemic accelerated it. But what other employment trends have been accelerated by Covid?

Take a look at this one. The number of self-employed has been increasing, with a sharp spike seen in the wake of the 2008 economic crash. According to the Institute for Fiscal Studies, in 1975, 8% of workers were self-employed; by 2019, this had increased to more than 14%.

For many, the gig economy is often characterised as an underbelly, where low paid workers are exploited in jobs such as driving, delivery and warehouse, where there is little security or commitment from employers. During the pandemic, many who were let go by employers took low level gig economy jobs.

However, the underbelly view ignores the flipside, the legions of freelancers, contractors and consultants in ‘solo self-employment’. Operating as sole traders or company owner-managers without employees, these workers are able to negotiate better and perhaps even lucrative rates for services.

Some employees, who have used redundancy or lay off resulting from the pandemic to take a forced career break, are likely to see self-employment as the way forward when the time comes to return to work.

Opportunities for recruiters

Increases in solo self-employment are often attributed to situations where good opportunities in traditional employment dry up. The pandemic is a case in point. However, recent self-employment increases in highly paid occupations in management and IT roles reflect a shift in the contractual nature of work across a wide range of occupations.

Figures for 2018-19 showed solo self-employed workers earned 30% less than company employees. And many are underemployed, with those wanting to work longer hours peaking at over 15% during the 2008 recession, with 12% expressing this desire in 2019.

Despite earning less and working fewer hours, there is an unwritten ‘covenant’ here. The solo self-employed had higher levels of job satisfaction, were more likely to report being happy and to consider their lives worthwhile, and reported lower levels of anxiety than employees.

However, the pandemic and similar economically disruptive events have a tendency to expose the risks and insecurities of earning a living through solo self-employment.

The growing interest in self-employment is a very interesting trend and it is one that is throwing up opportunities for recruiters. One is highlighted in our blog, ‘Opportunity for new agency business model created by skills shortages’.

Navigate the RecTech Future of Recruitment with ETZ

As we head towards 2025, we can expect technology to empower freelance and contract workers through the rise of communities, gaining greater control of their data and the increased ease of locating project and contract opportunities.

This is just one of the aspects of the recruitment industry that we explore in our new white paper, The Future of Recruitment. Technology is redefining so many aspects of our lives and work. Gaining a better understanding of the likely evolution of RecTech towards 2025 is essential for the owners and agency principals of recruitment businesses.

Whatever the twists and turns of technology, recruitment businesses are assured of excellent guidance and service with ETZ. As well as the fundamental requirement to process timesheets and invoice clients, ETZ integrates your other favourite applications for accounting. To find out more about how we simplify the complexity of RecTech for agencies like yours book a demo.