The Freelancer Club

A curiosity I’ve had since I first thought about becoming a freelancer was how many others were doing it and just how big the freelance community is. Before making the leap myself I was aware of some friends with their own businesses, either with actual companies or as sole-traders, but I wasn’t sure how representative my friend/family group were. Now I’ve made the change, I’ve gotten to know a whole load more freelancers now it comes up in conversation more naturally. Interestingly, I also now know a load of other people keen to make a similar move. So how big is the self-employed community and what are they up to?

Definitions matter

Okay, so first up is a little note to clarify who I’m talking about. I generally refer to myself as a freelancer as I just plain like the term, but it also actually is the best fit for the type of work I’m doing. Realistically, freelancers are a subset of a much wider group of self-employed people, but it can get a little complicated to unpick as not everyone agrees on definitions. As Nimblefins explain, “all freelancers are self-employed, but not every self-employed person is a freelancer”

So here’s broadly how it works:

• Freelancers (legally the same as self-employed) typically work for multiple organisations, either in short-term projects or longer-term arrangements
• Self-employed (legally the same as freelancers), also known as a sole trader, typically are business founders, running a small start-up

Millo, a support community for freelancers, goes into more detail in that while both set their hours and rates, self-employed have customers and freelancers have clients. They also explain that freelancers may sell their time/skills for different projects potentially through a different contract each time, whereas self-employed are unlikely to contract each time – instead selling more consistently such as set products or services. Growth also features here, with those self-employed often harbouring ambitions of growth to larger teams, with freelancers generally being more content with a solo-venture.

So, hang on, how many?!

The big headline is that The Association of Independent Professionals and the Self-Employed (IPSE) reports there are 2.2 million freelancers across the UK, making a contribution of whopping £147 billion to the UK economy. Since the ONS estimate there were 33 million people in employment in Oct 2020, it means that just under 7% of those working were freelancers (either as their primary work or alongside other work). To ground it a little more in reality – that’s equivalent to 1 in every 15 people you know. So maybe not surprisingly that so many more of my contacts are revealing that they work for themselves, when it’s now something else we have in common.

NB: when you look back at those definitions, this is only a sub-section of the much wider solo-self employment, which IPSE reports as high as 4 million people, contributing an eye-watering £303 billion into the UK economy.

Who are they?

IPSE’s analysis goes further into some of the core characteristics of these freelancers, finding that:

• More men are freelancers but its close, with a 54% male and 46% female split currently
• Art, literacy and media are the largest occupational group, making up 17% of freelancers, followed by teaching professionals
• 50-59 years olds are most common, making up the largest percentage at 26%
• Most are in it for the long term with 39% in it for 10 years+
• More commonly done in the south-east, with 23% of freelancers, closely followed by London

Perhaps not an unexpected set of headline stats. It’s interesting to see the (near) gender balance and reassuring that so many have found a long-term future in it. I wonder whether the age group is representative of people working through employment while they have higher financial burdens (mortgage, dependent children, student loans etc) before braving the move when they have more freedom, or whether it’s the cumulation of the experience they’ve gained that’s encouraged the jump. Perhaps it’s even facing retirement and that freelancing offers the opportunity for a continuation of work but in a more flexible way than employment. An interesting one to debate.

IPSE also specifically looked at benefit claimants and working mothers and there was a significant reduction in both in the freelance world in the last year, although these are hard to analyse as stand-alone statistics. However, those living with a disability are becoming more and more present in self-employment,

While again hard to assess in its own right, I can’t help but hope this is a positive pull-out to self-employment rather than a push out of employment.

The pandemic exodus

Those who were self-employed were hit particularly hard by the pandemic. ONS highlights that after twenty years of growth, 2019 to 2022 saw significant numbers move from self-employed back to employment. Some, including FreelanceUK, argue this is because government measures to support businesses, such as the Self Employed Income Support Scheme (SEISS), during the pandemic did not provide adequate support. Gaps included if your self-employed trading profits went over £50,000, penalising those had been operating very successfully, and limiting eligibility to those who had submitted their 2018/19 self assessment tax return by April 2020, penalising those who had more recently started being self-employment.

The sobering news about the numbers leaving self-employment has been used to bolster campaigns for more protections for this valuable, but potentially vulnerable, group. A really interesting article by FreelanceUK highlights the progress New York has made in cementing much greater legal protections for self-employed people and how the UK’s system has room for improvement.

The pandemic push

Contrary to the data on people leaving self-employment because of the pandemic, anecdotally I’ve heard a lot of people considering self-employment precisely because of the pandemic. I’ve heard organisations talk about the “the mass resignation”, reflecting the increased numbers of resignations they’re seeing following the pandemic. That a global pandemic has encouraged (or forced) many to review their lives and consider where their happiness really lies. Many I know are recognising that long hours and high-stress top-level jobs (with resulting meaty pay packets) aren’t always delivering good “value-for-life.”

To be more realistic, even more people I know are considering moving from more everyday pay jobs for more work/life balance and to follow passions. It’s squarely where I’d put myself. Lucky to be able to command a very decent wage in employment, but even with flexible working policies well embedded, balancing two small children and a whole load of life admin is hard, hard work. While the idea of increasing my income is appealing (let’s be honest, who doesn’t like that idea?!), my primary drive is for a better work-life balance, and maybe secondary as being my own boss and generating more job satisfaction by driving my own development and growth.

My own experience is reflected in Deloitte’s report Women at Work 2022 which highlights the toll of the pandemic on women and how it prompted change in many lives:

They note that over 63% of women want to leave their job in the next 5 years and according to their report, 40% of women looking for a new role cited burnout as the primary factor.

Final thoughts

The freelance, and wider self-employed community, is bigger than I’d ever appreciated. It’s further proof that it’s possible to do this successfully (provided you’re live to the challenges, particularly those exacerbated through the pandemic) and that there is a phenomenally diverse community of people out there to connect with. While the pandemic has had a devastating impact on scores of freelancers and self-employed, I feel there’s the seed of hope in the numbers of people who are now considering a move into it. How the numbers change over the next 2-3 years post-pandemic will be really interesting to watch, and I’m keen to keep an eye on what IPSE’s analysis shows. And even if those who have itchy feet about their job stay in employment, provided they make a move for better wellbeing, that’s a still a win.