How freelancers respond to an uncertain economy: A longitudinal report on seven years of Confidence Index data

Andrew Chamberlain,
Director of Policy at IPSE

The economic health of the freelance workforce is important, not just to freelancers themselves, but because it tells us a story about the health of the economy overall. Those who work for themselves, without the protective shield of employment, are at the coalface of British industry. Their exposure to the uncertainty of the market tells us about both the state of the economy at present and where it is headed.

That is why, in 2014, after a discussion with the Bank of England we decided to track key features of the freelancer experience such as earnings, day rates, time in work, business costs and, crucially, confidence. How confident do freelancers feel about the prospects for their business and the wider economy? And how is that confidence affected by economic shocks and major policy decisions?

Since that initial discussion with the Bank, IPSE’s quarterly Confidence Index has closely tracked the fortunes of the UK’s 2 million highly skilled freelancers. It is the result of a sustained effort from dedicated IPSE staff, our partners PeoplePerHour, and also thousands of freelancers themselves, including many IPSE members, who have taken the time to complete the surveys – without them, there would be no Confidence Index.

This longitudinal report is the culmination of seven years’ worth of research and analysis. For the first time, we are able to look back and examine the trends. We can see the effect that political decisions and macro-economic variables have had on freelancers’ confidence and understand the impact of these factors by setting them in the wider context over a longer period of time.

What this report reveals is that freelancers’ confidence has been badly shaken by the events of the past seven years. Brexit has been an almost constant concern since the referendum in 2016. The government’s pursuit of changes to the way IR35 works in both the public and private sectors has been a hugely negative pull on confidence overall, and the coronavirus pandemic has brought about a dramatic fall in earnings and demand for work.

This vital report discusses these challenges in detail and highlights the essential contribution freelancers make to the UK economy. We must do all we can to ensure they have the confidence to grow and thrive in an economic and political environment that supports them. With the right conditions, freelancers can fuel the economic recovery, stave off unemployment and provide UK businesses with the flexible expertise they need to prosper.

 

Executive summary

IPSE’s Confidence Index Longitudinal Report uses the quarterly Confidence Index to examine the day rates, earnings, capacity utilisation and confidence of the freelance sector since 2014. It shows that freelancers’ fortunes closely track economic and political fluctuations in these years.

Freelancers have been acutely affected by economic fluctuations because, as providers of flexible expertise – often working on innovation and development projects for larger businesses – they are both more exposed to economic changes and have more information about them. This also means that freelancers are adept at predicting economic changes and have regularly been proven right about upcoming economic turbulence and increases in business costs.

There have been three major ongoing political and economic events that have affected freelancers’ confidence and earnings in the last seven years: the UK’s departure from the European Union, the changes to IR35 self-employed tax legislation and the coronavirus pandemic.

Freelancers’ confidence in the UK economy has closely tracked these events. After remaining broadly positive between 2014 and 2015, freelancers’ confidence in the UK economy over the next three months fell from 7.3 in the last quarter of 2015 to -37.8 in the second quarter of 2016 – just before the vote to leave the European Union. It also dipped sharply in the second quarter of 2017, after changes to self-employed IR35 tax regulations were introduced in the public sector (a fall from -16.1 in Q1 to -34.0 in Q2). These drops in confidence, however, were eclipsed by the coronavirus pandemic. This saw a drop from -36.8 in Q4 2019 (already low because of Brexit concerns) to -86.6 in Q1 2020.

While confidence in the economy generally has been extremely sensitive to political developments, however, freelancers’ earnings and confidence in their own businesses have remained more resilient – until the coronavirus pandemic. In fact, in times of uncertainty caused by Brexit, it has actually been more common for freelancers to see an increase in earnings as employers move away from permanent employees to flexible expertise. In the second quarter of 2016, when confidence in the economy dropped to the then-lowest level on record, freelancers saw their average quarterly earnings increase from £23,243 to £29,601.

Freelancers’ confidence in their businesses has also fluctuated much less than confidence in the economy. Immediately after the EU referendum, while 3-month confidence in the economy fell from 7.3 in the last quarter of 2015 to -37.8 in Q2 2016, freelancers’ confidence in their businesses dropped much less: from 10.5 in Q4 2015 to -11.5 in Q2 2016.

This relative stability in earnings and business confidence was reversed in 2020 with the coronavirus pandemic. In the first quarter of the year, freelancers’ average earnings fell from £22,742 to £20,821. As the full impact of lockdown hit, freelancers’ earnings then plummeted to £15,709 in the second quarter of 2020. This drop was because, although freelancers’ average day rates remained relatively stable, the average number of weeks they were not working per quarter rose from 3.3 to 5.5 out of 13.

Freelancers’ confidence in their businesses dropped in a slightly different pattern. Their three-month confidence in their businesses dropped in the first quarter of the year from -14.7 to -62.6. It then recovered somewhat in the second quarter to -20.4 – potentially because of the support packages and economic stimulus announced.

Overall, IPSE’s Confidence Index Longitudinal Report shows a sector that has been more attuned and exposed than others to political and economic fluctuations. Despite this exposure, the self-employed sector has generally remained more resilient and agile compared to other sectors, largely retaining business confidence and earnings levels – even benefiting from surges in demand in some periods of instability. The report also, however, shows how these trends have been reversed by the extreme and extraordinary circumstances of the pandemic, leaving the freelance sector more financially fragile and in need of external support than at any other period on record.

Introduction

At the end of 2019, self-employment passed the 5 million mark for the first time ever. Much of this growth can be attributed to rapid increases in the number of freelancers working in the most highly skilled occupational categories.

Freelancers, who are the focus of this report, are a subset of the solo self-employed population who are working in the three highest skilled occupational categories (SOC1 to SOC3). This includes managers and directors, professionals and associate/technical professionals.1

Freelancing brings value to the individuals who have chosen this way of working, with people moving into freelancing for overwhelmingly positive reasons such as more flexibility (88%), freedom to choose where to work (83%), when they work (84%) and for improved work-life balance (73%).2

However, the rapid rise of self-employment has also created considerable uncertainty not only for policymakers but also for industry and freelancers themselves.

Matthew Taylor’s review of Modern Working Practices published in 2017 discusses some of the key policy issues that arose from the rise in self-employment, such as the need for a legal framework that clarifies self-employment status, as well as better training and learning opportunities to enable skill expansion and job creation within the sector.3

Freelancers themselves, while satisfied with this way of work, also face some challenges especially when it comes to the irregularity of income they experience (60%), as well as saving for later life (56%) and dealing with late payment (46%) .4

To better understand the nature of the issues that affect freelancers, as well as how the sector is influenced by the wider political and economic circumstances in the UK, IPSE have been gathering data on freelancers’ business and economic outlook via the quarterly Confidence Index survey for the last seven years.

IPSE’s Confidence Index was first launched in Q1 2014 and has operated on a quarterly basis ever since. This report summarises this longitudinal set of data on the business and economic outlook of freelancers in the UK, as well as information on their pay rates, demand for the work they do, expected changes in their business costs and other areas of interest.

It covers a period of sheer upheaval and uncertainty in British politics, marked by four distinct periods: the period prior to the EU referendum, a post-Brexit fallout period, a real crunch point in the Brexit negotiations, and finally – the outbreak of the coronavirus crisis.

The report reveals significant changes over time. It indicates that freelancers’ confidence is responsive to changes in the policy and business environment in the UK. Freelancers have further proved to be astute forecasters; both of their own business and the wider UK economy.

The accuracy of trend forecasts from freelancers suggests that they are not basing their predictions just on extrapolations from recent history. Rather, they also seem to be using additional information related to technological change, new projects, business growth and their clients’ plans – or lack of plans – for future innovation. Therefore, freelancers’ predictions about the economy most likely reflect the intentions of the corporations and SMEs they work with.

The analysis and reporting of the results are enabled through the use of the headline index score – a statistical measurement that allows changes in confidence among freelancers to be tracked over time, varying from -100 to 100. The overall trend points that the headline business confidence index score used in the survey has been in negative territory since the outcome of the EU referendum was announced, excluding Q4 2016 and Q2 2018.

Notwithstanding freelancers’ declining confidence, this research has shown that freelancers are resilient in the face of adversity, considering that they continue to work at high capacity and generate premium earnings above that of employees.

Furthermore, the information provided by the survey helps to inform strategies for improving the self-employment landscape by understanding what troubles they face and where to focus lobbying, further research and campaigns.

Economist perspective

Economist perspective

The last seven years have been a period of political upheaval, but the underlying theme is of a national and global economy attempting to readjust after the 2008 financial crisis. Much like the similarly turbulent decades of the 1930’s and 1970’s, the 2010’s saw a collision of identities, political surprises and the beginnings of a shift in economic consensus. In the UK this began with the Scottish and EU referendums followed by several general elections.
This period however has seen a continuing growth in self-employment and the success of this model of working, characterised by several key themes which have particularly impacted freelancers.

The growth in self-employment

The Bank of England, looking specifically into the growth of self-employment in 2015, said:5

“While the recession may have pushed some workers into self-employment where they otherwise might have been unemployed, there is little evidence to suggest this was a major factor in the rise of self-employment: across different sectors, job losses have not been not well correlated with subsequent increases in self-employment. Moreover, most self-employed workers are not looking for a job.”

Although they suggested the growth in this area could be due to long-term trends from before the 2008 financial crisis, such as an ageing workforce or hidden underemployment, they concluded that self-employment wasn’t growing because of excess slack in the economy. More women than ever have entered the workplace including into self-employment. In fact, IPSE’s research highlights that the number of female freelancers increased by 69 per cent between 2008 and 2019.6

There has also been a growth over a similar period in the number of disabled people becoming self-employed.7 According to IPSE research most disabled freelancers value the flexibility and control offered by this working pattern, similarly to the general self-employed population.8 Both trends are drivers in the growth of self-employment to over 5 million in the UK in 2019.9

Cultural trend of wanting more flexibility

The need for flexibility in the workplace has become more prescient as technology and new working practices have taken hold. Freelancers value their flexibility, with IPSE research showing that people are moving into freelancing for overwhelmingly positive reasons: more flexibility (88%), the freedom to choose where they work (83%), when they work (84%) and for improved work-life balance (73%).10

Productivity and slow wage growth

Productivity growth is traditionally linked to wage growth and is one of the great puzzles of the UK economy. In January 2020 we saw the highest level of employment on record.11 In turn annual growth in UK productivity has only averaged 0.3 per cent over the last decade,12 and wages have been similarly supressed. The UK is not on its own in this problem. Most OECD13 countries have seen little productivity growth since the crash in 2008.

We have seen both record employment and self-employment in this time whilst wages have stagnated. Similar to employees, freelancers’ day rates haven’t changed markedly over the last seven years. However, they continue to earn more money than employees in similar roles, which could be one of the reasons why more and more people are becoming self-employed.

The Resolution Foundation think tank expressed in its July 2019 earnings outlook that, contrary to their estimations, self-employed earnings have moved roughly in line with the minimum wage, and are not a response to it.14

The slow marching threat of IR35

IR35 encompasses measures set out by the government aimed at stopping “off-payroll” employment or false self-employment. Changes to how the liability for a determination of whether one is considered inside or outside IR35 are due to be implemented in the private sector. The rollout of these changes, meaning that the decision falls with the end-client rather than the contractor, came into force in the public sector in 2017. This led to increased uncertainty for freelancers, many of whom had to move to umbrella companies or increase their day rates to adjust for their financial loses.15

Brexit-related uncertainty

Trade, economic confidence and business investment have all been affected by the delays and uncertainty caused by the political deadlock in agreeing a way of leaving the EU. This was also reflected in freelancers’ responses in IPSE’s Confidence Index.

Brexit  is also a driver behind the weak pound which in turn affects other trends, such as the low levels of capital investment.16 In fact, the end of 2018 saw the first four consecutive quarters of falling capital investment since the 2008 financial crisis. This inevitably has an impact on the business opportunities for freelancers and slows down business activity.

Coronavirus

The onset of coronavirus and the subsequent government rules around social distancing, the shutting down of events and a huge move for the majority of people who could, to work from home, has fundamentally changed the economy in a short space of time. Unemployment is now predicted to reach levels unseen since the 1980’s by the end of 202017 and several industries with a high number of self-employed people have been particularly affected, such as the creative industries. The long-term effect of the virus on the UK’s freelancers is yet unknown, but our data, as we explore later in this report, has shown a huge immediate impact on freelancers' working hours and earnings.

Economic confidence

Freelancers’ confidence in the UK economy

Research has indicated that the freelancing sector is highly responsive to changes in policy, business, and economic environments. Freelancers have proved to be astute forecasters of trends in the UK economy, many of them working on projects involving high levels of innovation and technology for both SMEs and big corporations. As a result, they often have more access to knowledge and information about changes in the wider economic and investment environment compared to many larger businesses. Looking specifically at IPSE’s Confidence index, the data shows that freelancers tend to be much less confident about developments in the economy in comparison to their own businesses. There also have been several milestone events that caused freelancers’ confidence to sink in deep negative territory, which will be explored in the sections below.

The sections exploring freelancers’ confidence in this report, have been analysed in conjunction with the data looking at the factors freelancers think are negatively affecting their businesses. These include the UK economy, tax and regulation policy, Brexit and most recently coronavirus.

EU referendum results

Freelancers’ economic confidence for both the next three and 12 months has regularly registered negative values since the index began.18

Nevertheless, the referendum marked one of the greatest drops in short-term economic confidence, with index levels reaching -37.8, and remaining locked between -15 and -35 for most quarters since.

Freelancers’ 12-month economic confidence also dropped sharply in Q2 2016 when the results of the EU referendum were announced but remained locked in much deeper negative territory between -25 and -35 for most quarters since.

Therefore, Brexit has been one of the single most influential factors impacting freelancers’ confidence in the economy, illustrating their negative sentiment about Britain leaving the EU, and the expected implications for business activities, and public finances.

Brexit crisis points and periods of political uncertainty

Economic confidence has also been much more sensitive to Brexit crisis points occurring post-EU referendum, than business confidence, which will be explored later in this report.

The short-term economy confidence index saw major drops in quarters when either the Brexit negotiations were dominating the news or a Brexit deadline was approaching such as in Q4 2018 or in Q3 2019 when it reached its lowest level on record pre-COVID-19 (-45.0). Tellingly, the state of the UK economy also jumped to become the biggest negative factor influencing freelancers’ businesses in the final quarter of 2019. This was just as polling day in the general election happened and Christmas was just round the corner.

The high level of uncertainty surrounding Brexit in 2019 led to stalled investment by businesses as they were unsure of the external economic environment in which they would be operating in the foreseeable future. It was therefore expected that as soon as this uncertainty was removed a significant backlog of business investment would be released and confidence in the economy would improve.

For instance, the Q4 2019 survey was conducted during a period when this level of uncertainty was somewhat reduced but not removed completely. The currency markets had already responded positively to the reduction of uncertainty as the likelihood of a hung parliament dissipated and the prospect of an overall Conservative majority became more likely.19 Along with these changes, short-term economic confidence improved slightly from the record lows reached in Q3 2019.

Similar to freelancers’ short-term economic confidence, 12-month figures record drops around periods of political uncertainty and snap general elections (Q2 2017), as well as Brexit crisis points (Q4 2018, Q3 2019).

The difference here is that the 12-month confidence index seems to be between 5 and 15 points lower than the short-term one for these particular quarters, meaning that freelancers predict for the abovementioned major economic and political events to have more prolonged effect on the UK economy in the medium to long-term.
The short-term economic index is also much more volatile, recording sharper drops and spikes quarter to quarter around major events, compared to the 12-month values which while more deeply negative are also much more stable. This may mean that freelancers express their more immediate reactions and concerns towards current affairs in the 3-month index, around periods of high uncertainty.

Coronavirus health and economic crisis

While the ratification of the Brexit withdrawal agreement on 31 January 2020 was expected to lead to improved economic confidence in the first quarter of the year, the coronavirus health and economic crisis hit the sector in Q1 2020 just before this could occur.

Prior to the coronavirus pandemic freelancers’ confidence in the UK economy was already low mainly because of concerns about the impending economic impact of Brexit. However, in Q1 2020 freelancers’ short-term confidence in the economy plummeted even further, reaching the lowest level on record.

While in other quarters, SOC1 managerial freelancers seemed to be less negative about prospects for the UK economy in comparison with SOC2 professional and SOC3 technical freelancers, in Q1 2020 the collapse in confidence occurred across all three freelancer occupational groups (SOC1-3).

Therefore, for the first time, there was a lack of variation between the three groups in terms of their short-term confidence index scores, which were in the narrow range of -89.0 to -84.9.

These results most likely reflect a common view across freelancers about the extreme economic costs of lockdown and the subsequent social distancing measures introduced by the government to combat the spread of the COVID-19 virus.

As with the short-term confidence, freelancers’ 12-month economic confidence experienced a large fall from -39.3 to -77.8 in Q1 2020 as a result of the coronavirus outbreak.

The coronavirus worldwide pandemic is a near-unprecedented global health crisis. These results, showing the lowest 12-month economic confidence on record in the freelance sector, reflect a corresponding economic crisis.

The Office for Budget Responsibility (OBR) believes the cost of the crisis could be an increase of over £200bn in borrowing (as the state has had to absorb the cost of replacing millions of incomes with people joining the Job Retention Scheme and the Self-Employment Income Support Scheme as well as unemployment rising, while tax revenue inevitably drops off), as well as a 35 per cent drop in GDP month on month, or around eight per cent year on year.20

This is a bigger drop than during the 2008 financial crisis and the largest in a century, perhaps even the biggest recession for 300 years.21 Given the sheer scale of the fall, it is also probably the sharpest decline in history. The effect of such a huge drop in supply and demand may take time to filter through the economy.

However, in comparison to their predictions for the second quarter of the year, freelancers express a little more confidence in the outlook for the UK economy for Q3 2020. However, they still expect UK economic performance to deteriorate in the long term.

In Q2 2020 the short-term freelancer economy confidence index recovered from the record lows recorded in Q1 2020 (-86.6), although it remained in strong negative territory at -37.5.

Beyond Q3 2020 freelancers expect the UK economy to deteriorate even further, with a 12-month UK economy index score of -53.4. While this marks an improvement since Q1 2020 (-77.8), it illustrates freelancers’ belief that some of the most negative consequences of the COVID-19-related economic crisis will be felt in the long-term, over the next year (2020-2021).

 

Freelancer confidence index for the UK economy over the next three months

*Freelancers were asked to rate their confidence for the future in one of five categories: more confident, slightly more confident, as confident, slightly less confident, and a lot less confident. The confidence index was created by scoring each of the five answers with 100, 50, 0, -50 and -100 respectively, and then taking the weighted average score for the sample. The weighted average is based on the relative number of freelancers in the labour market in 2019.

Freelancer confidence index for the UK economy over the next 12 months

*Freelancers were asked to rate their confidence in the future of the UK economy in one of five categories: more confident, slightly more confident, as confident, slightly less confident, and a lot less confident. The confidence index was created by scoring each of the five answers with 100, 50, 0, -50 and -100 respectively, then taking the weighted average score for the sample. The weighted average is based on the relative number of freelancers in the labour market in 2019.

Business confidence

Freelancers’ confidence in their businesses

Freelancers’ confidence in their businesses has ebbed and flowed with political events since the inception of the index. In most cases it has ebbed more than flowed. Brexit and the recent coronavirus crisis have been the most decisive factors looking at the long-term trends. However, changes to taxation policy such as IR35 and the wider economy also played out in the figures.

Top factors lowering business performance in the last seven years
Coronavirus pandemic
Outcome of the EU referendum
State of the UK economy
Government tax policy related to freelancing
Government regulation related to freelancing

*Freelancers were asked to rate the importance of 15 different factors affecting the performance of their business in categories ranging from significantly positive and slightly positive, to no impact, slightly negative and significantly negative. The list of factors was updated in Q2 2020.

EU referendum results

Freelancers’ short-term business confidence was predominantly in positive territory throughout 2014 and 2015 until the outcome of the EU referendum was announced in Q2 2016 when it first dipped to negative levels (-11.5).

Since then freelancers have remained mostly positive about the prospects for their businesses in the short-term, excluding quarters when major political and economic events caused significant disruptions to the operation of their freelance businesses.

Freelancers’ 12-month confidence index was also in strong positive territory throughout 2014 and 2015 until the results of the EU referendum were announced in Q2 2016 when it dipped to -24.2.

Unlike freelancers’ short-term confidence, however, the 12-month confidence index never fully recovered and mostly remained entrenched between -3 and -10, dropping even further in periods of increased political and economic uncertainty.

We have surveyed freelancers’ sentiment time and again throughout the Brexit process. When asked about their preferred deal, freelancers indicated a preference for remaining closely aligned with the EU. In fact, 81 per cent of the freelancers surveyed were against a ‘no deal’.22

This could perhaps explain why Brexit held its place in the top three negative factors impacting freelancers’ businesses throughout most of the period following the referendum and also led to drops in confidence in the years after, as will be explored in the section below.

Periods of political and economic uncertainty

Freelancers’ short-term confidence dropped in negative territory in quarters when snap general elections took place such as in Q2 2017 (-12.2) and Q4 2019 (-14.7). Therefore, political uncertainty in the country seems to be transferring into freelancers’ business outlook for the upcoming months.

The data also shows that freelancers’ short-term business confidence is sensitive to changes in legislation such as the roll-out of IR35 in the public sector in Q2 2017, and the roll-out of IR35 in the private sector which freelancers were concerned about in Q4 2019, but was later postponed due to coronavirus outbreak.

The pattern for the 12-month freelancer business confidence index is similar except that the index scores are more emphatically negative looking at the long-term trends.

Key dips in the 12-month business confidence index occurred around Brexit crisis points such as in Q3 2019 when the long-term index dropped to -20.8, as well as when general elections were taking place in Q2 2017 (-25.3) and Q4 2019 (-23.2).

The explanation for these is fairly simple - when an election takes place there is added uncertainty for everyone as the new government will likely bring about changes in the economy and business environment.

The same is true for the added Brexit uncertainty which led to reduced investment levels in the UK between 2017 and 2019, and also transferred into a reduced business confidence for freelancers, many of whom either take contracts in the EU or work in sectors in the UK affected by the negotiations.

For instance, IPSE data shows that in 2018 more than one in three (39%) freelancers had at least one project/contract based in the EU (excluding the UK) for that year, while just over one in four (28%) completed at least one trip to the EU as part of their self-employed work for the same period of time.23

Coronavirus health and economic crisis

Most importantly, the coronavirus health emergency and economic crisis in Q1 2020 caused the business confidence indices to fall to unprecedented low levels: -62.6 for the short-term confidence and -57.3 for the long-term business confidence.

Even though business confidence recovered slightly in Q2 2020, it remained in strong negative territory for both the long and short term.

In Q2 2020, the coronavirus pandemic was also introduced as a factor influencing business performance in IPSE’s Confidence Index survey. It was not only the top negative influence on freelancers’ businesses that quarter (selected by 81.1% of freelancers), but it was also selected as a top factor by all three freelancer occupational groups.

This is hardly surprising given that the IPSE Coronavirus Report published in April 2020 indicated that the coronavirus crisis has caused major concern about business prospects in the sector.24

As the country took necessary measures to shut down everyday activity in order to protect public health and the NHS, there was an immediate financial impact on freelancers, 45 per cent of whom said that they might end up with no money to cover basic living expenses as a result of the crisis.25

Throughout March and April 2020, IPSE and other organisations that advocate for the self-employed also heard countless stories from those who had seen their future work and income being delayed, cancelled, or disappearing altogether.

These record low levels don’t necessarily mean that the sector won’t survive the crisis. In the past freelancers managed to prove their resilience by securing rates double those of employees working in equivalent roles, even when their business confidence was stable in the negative territory.

It does, however, indicate that the government should provide more support for this vital sector, especially the groups that were not able to access the support measures such as the Self-Employment Income Support Scheme (SEISS), namely the newly self-employed who started their business post April 2019, those with average profits above £50,000 and anyone operating via a Limited Company.

Differences between occupational groups and the impact of IR35

Finally, looking at differences between the three occupational groups overtime, the data shows that generally SOC3 technical freelancers report higher business confidence index values in comparison with SOC1 managerial and SOC2 professional freelancers.

In some quarters, this might be related to the fact that SOC3 are the only freelancer group that wouldn’t be heavily affected by the proposed changes to IR35 in the private sector, as these only apply to limited company directors while most SOC3 freelancers operate as sole traders.

According to IPSE research, the changes to IR35 in the public sector led to clients losing skilled contractors, project delays and increases in project costs. Many freelancers also had to move to umbrella companies or increase their day rates to adjust for their financial loses.26 Changes were due to come into force in the private sector in April 2020 however have now been delayed until April 2021.

Business confidence also doesn’t seem to be related to the objective performance of the three freelancer groups. For example, SOC3 freelancers, while most positive, earn substantially less per quarter in comparison to the other two segments and find it more difficult to find work due to higher competition within their sectors.

Interestingly, however, the large fall in confidence which occurred in Q1 2020 because of the coronavirus outbreak was across the whole highly skilled freelancer sector, diminishing most previous differences. This shows the extent to which the crisis affected all freelancers regardless of their skill and income levels.

The UK economy

Brexit uncertainty and the coronavirus pandemic can explain a lot of the negativity around the economy, with both factors contributing to a perception of substantial downside risk in the future.

However, there is an argument that something broader was going on. Germany,27 Italy28 and several other countries experienced quarters of negative growth in 2019. The UK in fact experienced nearly zero growth in the autumn of the same year.29

The changes in the strength of the pound were also noticed by freelancers. For instance, SOC3 technical freelancers ranked this quite highly as a problem for their businesses, possibly reflecting that they may have more exposure to imports and exports from Europe in comparison to the other two freelancer occupational groups.

 

Freelancer confidence index for their businesses over the next three months

*Freelancers were asked to identify their confidence levels for the future, relative to current performance in one of five categories: more confident, slightly more confident, as confident, slightly less confident, and a lot less confident. The confidence index was created by scoring each of the five answers with 100, 50, 0, -50 and -100 respectively, and then taking the weighted average score for the sample. The weighted average is based on the relative proportion of freelancers in the labour market in 2019.

Freelancer confidence index for their businesses over the next 12 months

*Freelancers were asked to identify their confidence levels for future relative to current performance in one of five categories comprising: more confident, slightly more confident, as confident, slightly less confident, and a lot less confident. The confidence index is created by scoring each of five answers with 100, 50, 0, -50 and -100 respectively and then taking the weighted average score for the sample. The weighted average is based on the relative number of freelancers in the labour market in 2019.

Business performance

Factors enhancing freelancers’ business performance

Top factors enhancing freelancers' business performance in the last seven years

Brand value and reputation in the market

Innovation in the services offered to clients

Collaboration with other freelancers/ businesses to secure more work

Growth in the sector in which they work

Adoption of flexible working practices by organisations

*Freelancers were asked to rate the importance of 15 different factors affecting the performance of their business in categories ranging from significantly positive and slightly positive, to no impact, slightly negative and significantly negative. The list of factors was updated in Q2 2020.

Despite being able to choose from an extensive range of public policy, economic and business-related factors impacting their business performance, freelancers have been steadfast in their belief that the top factors that continue to positively affect their businesses are all internal and self-determined by freelancers themselves.

This reveals that freelancers believe that their own effort, talent and strategic choice are currently driving their business successes as opposed to any external factors, related to the business environment.

Building their brand and reputation has continuously been identified as the most effective strategy to enhance freelancers’ business performance over the years. Other commonly reported factors were innovation in terms of services offered to clients and collaboration with other freelancers/businesses to secure more work.

This is hardly surprising considering that a well-established brand is a key competitive advantage for freelancers and can in fact determine the success of their business. Recent research commissioned by IPSE showed that despite the rise of social media and freelancing platforms, word of mouth remains the top method for the self-employed to find work or market their businesses being selected by over half (52%) of all respondents.30

Service innovation is another factor that seems to be particularly important to hiring businesses as illustrated by previous research. Business interviews with clients from both large and small companies who engage freelancers reveal that managers perceive freelancers as an essential segment of the labour force because their expertise and business inputs enable an innovation driven and entrepreneurial economy.31

Overall, there is a common pattern of freelancers being successful in using business strategies relating to innovation, marketing and entrepreneurship to drive business performance in an adverse external business environment, which they believe has been created mainly by government policies.

There are very few differences in the top positive factors selected by the three freelancer occupational groups. For instance, SOC3 freelancers working in associate professional and technical occupations are the only segment that often outline targeting new markets as a key method to enhance the performance of their businesses.

This could be associated with the fact that SOC3 freelancers are working in occupations such as design and media and are more likely to seek clients abroad, especially in the EU and work remotely. Therefore, targeting new markets allows them to diversify their client base and enhance their business performance.

The only top positive factor mentioned by freelancers that is external to their business strategies is the growth of the sector in which they work. This suggests that there has been an increasing demand for freelancers’ skills and expertise across businesses over the last five years.32

This is also in line with recent ONS figures showing that the number of self-employed people passed the 5 million mark for the first time ever at the end of 2019, this rise being driven by an increase in the number of freelancers working in the three most highly skilled occupational categories.33

As mentioned earlier in the report, it may be expected that the demand for freelancers’ work in the economy will increase in the long term due to improved business perceptiveness towards remote working during and after the coronavirus lockdown.

There was some evidence for this trend in Q2 2020, when ‘adoption of flexible working practices by organisations’ was for the first time cited as one of the top positive factors and selected by almost half (49.2%) of freelancers.

Therefore, while the outlook for 2020 is tough for freelancers, it is also likely that those of them that can last the pace will benefit from a very positive growth in demand for work in the period beyond the coronavirus health crisis.

Capacity utilisation

Capacity utilisation

Freelancers report high capacity utilisation – meaning the amount of time they are on assignment/project in a 13-week quarter. Between Q4 2014 and Q1 2020, on average freelancers were working 80 per cent of the time, which is a comparatively high figure considering that it does not account for holiday periods.34

 

It’s important to note that this could vary for freelancers with some working on multiple projects while others working on a non-project basis.

Interestingly, there appears to be little seasonality in the amount of time freelancers are working. For all quarters, capacity appears to be around 80-81 per cent. The only exception is quarter three (Q3 – July to September) when capacity drops to an average of 79 per cent which could be associated with freelancers taking more time off during the summer season.

Demand for freelancers’ work, however, changed over the years.

For all three years between 2015-2017, capacity utilisation was close to 82 per cent. It dropped to 79 per cent in 2018, and further to 78 per cent in 2019. It can only be expected for this annual average to drop even further in 2020 due to the coronavirus outbreak and the impact it had on businesses and the economy.

Overall, this decreasing capacity can be explained by the impact of certain political and economic events on the demand for freelancers’ work.

For instance, freelancers’ spare capacity was affected by the EU referendum and the following period of economic uncertainty. The number of weeks not working per quarter rapidly dropped from 1.7 (13% spare capacity) in Q2 2016 to 3.4 (26%) in Q3 2016 when the outcome of the referendum was announced. Furthermore, the levels of spare capacity remained high (2.6 weeks) in Q4 of the same year.

On the other hand, freelancers’ volumes of work increased substantially in the two quarters preceding a Brexit deadline, with spare capacity falling from 2.9 to 2.7 weeks in Q4 2018, and from 3.3 to 2.5 weeks in Q3 2019.

This could partially be explained by the “talent gap” in the labour market, created by Brexit uncertainty, with many employers preferring freelancers’ “pay as you go” workforce model that allows businesses to fill in a temporary skills gap without the financial burden or risk of hiring a permanent employee.

Freelancers’ spare capacity also increased rapidly during the coronavirus outbreak – from 2.6 weeks in Q4 2019 to 3.3 weeks in Q1 2020 when the crisis began to the record 5.5 weeks in Q2 2020. This is hardly surprising with recent IPSE research finding that over two in three (69%) freelancers said that the demand for the work they do had decreased as a result of the coronavirus crisis, and over half (53%) said it had decreased substantially.35

However, while the freelancing sector has been strongly hit by the coronavirus crisis, what the future holds for freelancers is not necessarily all bad.

Because of the increased trend in remote working caused by the coronavirus lockdown, it can be expected that a significant proportion of organisations may discover the business performance benefits of remote working and will continue to use it in the future.

Therefore, in the long term, we may experience an increased receptiveness to outsourcing work to freelancers who are the ‘core remote workforce’ and may see an increase in their capacity after the crisis comes to an end.

Finally, looking at the different freelancer groups, SOC1 managers, directors and senior officials (80%) and SOC2 professional freelancers (82%) tend to work more than SOC3 associate professional and technical freelancers (78%).

This could be related to the fact that SOC3 is the largest of the three groups, comprising 814,000 freelancers (in comparison with 767,000 in SOC2 and 544,000 in SOC1),36 and therefore the group most likely to face competition.

In fact, SOC3 is the only group selecting competition from other freelancers as a key negative impact on their business performance, which also suggests that within their sector it might be more difficult to find projects and work.

Interestingly, SOC1 managerial freelancers have been more strongly affected by the coronavirus crisis with their spare capacity reaching almost 50 per cent (49%) in Q2 2020, compared to 41 per cent for SOC3 and 39 per cent for SOC2 and an average of 42 per cent.

Freelancers’ spare capacity: Number of weeks not working per quarter

*The weighted average is based on the relative number of freelancers in the labour market in 2019.

Rates & earnings

Day rates and quarterly earnings

Day rates

Freelancers charge £438 on average per day, with rates varying substantially based on their skill level.37

SOC1 managers, directors and senior officials charge on average £587 per day, followed by SOC2 professional freelancers who charge £495. SOC3 freelancers working in associate professional and technical occupations charge almost half this figure - £292 per day.

These differences between the SOC groups illustrate the importance of training for the development of new skills, and for keeping abreast of advances in technology and innovation to secure more clients and higher day rates in self-employment.

How much the different freelancer occupational groups are charging

 

Freelancers’ day rates are often linked to changes in the political and economic landscape of the country. For instance, freelancers in all three groups experienced a big spike in earnings in the final quarter of 2018. We know from data produced by the REC that this period saw a real tightening of the jobs market, and that with the Brexit deadline a few months away, government preparations for “no deal” began in earnest.

It is quite possible that firms turned to freelancers to fill the gap left by a tight employment market. The flexibility of their working patterns made it easier to hire them quickly for a short period if necessary.

Another key finding is that expected changes in day rates are generally associated with changes in freelancers’ overall confidence. For instance, in Q3 2016 and Q2 2017 when freelancers’ confidence dropped significantly, a large proportion (42% and 40% respectively) of freelancers indicated that they expected their day rates to decrease in the next 12 months.

Similar to this, in Q1 2020 when freelancers’ confidence in both their businesses and the economy hit record lows, freelancers predicted a 20 per cent drop in their day rates over the next year.

Freelancers also tend to experience seasonal earnings, with Q1 (January-March) and Q3 (July-September) typically showing a fall in day rates, and Q2 (April-June) typically showing an increase in rates.

Overall, however, day rates haven’t changed much over the years and despite fluctuations, the difference in average day rates from 2015 to 2019 is only £13 – a drop from £436 to £423. They also remained on a similar level (£430) during the coronavirus outbreak in Q1 2020 and experienced a small drop to £416 in Q2 2020 during the lockdown.

In fact, day rates remained close to £430 in most years, with the only exception being 2017 when they reached a peak of £481, illustrating the resilience of the sector.

Freelancers’ day rates and quarterly earnings

*The weighted average is based on the relative number of freelancers in the labour market in 2019.

Quarterly earnings

On average, freelancers earn £23,021 a quarter which is between two and two and a half times more than employees in equivalent roles (£10,169 on average for 2019).38

As with their day rates, quarterly earnings seem to be dependent on freelancers’ skill level with SOC1 and SOC2 freelancers earning almost twice as much each quarter as SOC3 freelancers - £30,443 and £26,457 respectively in comparison with £15,140 for SOC 3.

In terms of seasonality, on average, freelancers tend to earn more in the first (£22,752 for Q1) and second quarters (£24,703 for Q2) of the year, with their earnings declining in summer (£22,330 for Q3) and remaining lower for the winter months (£22,463 for Q4).

This is hardly surprising as the research already showed that freelancers seem to be working less in summer (Q3) and their quarterly earnings are calculated on the basis of their day rates, as well as the amount of time they spend working each quarter (capacity utilisation).

Freelancer’ quarterly earnings have remained almost unchanged over the last five years, marking a small increase of less than one per cent (0.35%) from Q4 2014 to Q4 2019.

This small increase seems to be concerning as it does not account for inflation and can be compared to the eight per cent increase in average salaries received by employees in similar roles over the same period.

However, it is important to note that freelancers still secured premium earnings compared to employees. For instance, in 2019, freelancers earned on average £21,959 per quarter, compared to equivalent employees whose earnings were £10,169 per quarter that year according to ONS estimates.39

Freelancers’ earnings have however fluctuated throughout the last five years, increasing from 2015 to 2017, and then declining for the following two years until they reached close to the levels seen in 2015 at the end of 2019.

As with their day rates, these variations seem to be attributed to major changes in the economic and political landscape of the country.

For instance, following a very good quarter in Q2 2016, quarterly earnings sharply dropped by over £10,000 (34% decrease) to their lowest level on record in Q3 2016 after the result of the EU referendum was announced.

Another sharp drop was observed in Q4 2017 when quarterly earnings decreased by almost 17 per cent. This could be associated with the fact that Brexit negotiations were first initiated in that quarter which also led to reduced investment in new projects by many major corporations.

Most recently, freelancers’ earnings dropped by over eight per cent in Q1 2020 when the coronavirus crisis began. The drop deepened with further 25 per cent decrease in Q2 2020 due to the great decline in capacity utilisation, leading the sector into recession.

This is in line with a wide majority of freelancers (81%) predicting that their income would decrease in Q2 2020 as a result of the coronavirus outbreak.40

Business costs

Business costs

Since Q4 2017, IPSE’s Confidence Index has been tracking how freelancers feel about their business costs in terms of sentiment, charting if they expect them to increase, decrease or stay the same over the following 12 months. Freelancers have consistently expected their costs to increase.

 

Looking at the period from 2017 onwards, we can see that all three freelancer occupational groups have consistently expected higher than inflation increases in business costs. For instance, the average rate of inflation for 2019 was 1.5 per cent, compared to freelancers predicting a 11-14 per cent rise in their business costs over the next year in 2018.

This could be related to the fact that freelancers’ businesses are exposed to specific costs such as: travel, technical equipment, and work-related training. Looking at transport in specific, this can go up at a faster rate than consumer prices. However, the major driver behind freelancers’ sensitivity to increases in their business costs could be related to working solo, which requires being responsible for all business-related expenditure, rather than having an employer to take on some of the financial pressure and cover part of your work-related costs.

EU referendum

When asked in 2018, SOC1 freelancers, working in senior and managerial occupations, consistently predicted higher increases in business costs over the following 12 months compared to the other two groups. SOC1 freelancers tend to be both from higher earning professions and from those overseeing major business decisions.

This might have encouraged them to believe that costs were likely to increase, with Brexit dominating the headlines, but the details of a potential agreement far from complete. However, the strong Conservative majority obtained in Q4 2019 seemed to have reduced some of the Brexit uncertainty, as SOC1 freelancers predicted only a seven per cent increase in business costs that quarter, compared to an average of 16 per cent predicted increase across 2018.

Interestingly, SOC3 technical freelancers predicted the highest rise in business costs throughout 2019 (in the range 10-14%), with their predictions especially high in quarters marking a Brexit deadline. This could be associated with the fact mentioned above that SOC3 freelancers are working in occupations such as design and media and are more likely to seek clients abroad, especially in the EU. Therefore, they are more likely to be sensitive to developments to the Brexit negotiations.

Coronavirus pandemic

At the onset of the coronavirus pandemic in Q1 2020, freelancers predicted that their business costs would decrease for the first time on record. Even though the expected decrease was minor (-0.1%), it could be related to a general negativity about the economy and decreasing amounts of work: less business can mean less costs in the short to medium term. Alternatively, however, with a range of freelancers working from home after the introduction of a nation-wide lockdown, their predictions could simply reflect an anticipated fall in costs such as travel and commuting.

The second quarter of the year saw a return of business costs expectations to more traditional levels (6% increase) but still exceeding that of inflation. Similarly to the increase in business and economic confidence over the same period, this could reflect the easing of the lockdown measures creating a boost to the economy, as well as freelancers’ having a better picture of where the economy is going three months further down the line.

 
Expected change in business costs

Note: The average for the whole period includes all quarters between Q4 2017 and Q2 2020. The average for 2020, includes only Q1 and Q2 2020.

Conclusion

Conclusion

IPSE’s Confidence Index is a story of this volatility, which we can split into four distinct periods looking at both business and economic confidence. The first is easy to mark, it covers the first confidence index right up to the referendum where our results plunged. The second period runs from this point until mid-2018 and can be deemed as the post-Brexit fallout period. Economic confidence in this section is locked into negative territory, but business confidence is more volatile. It covers the 2017 snap election, but crucially also the rollout of IR35 in the public sector. Looking at economic confidence and business confidence for Q2 2017, which covers both events, there is a particular dip.

The end of this period is characterised by a change in the discourse around Brexit as negotiations began to enter a crucial phase and the implications of several narrow results in political debates (Scotland, Brexit, snap election) began to take their toll on the political fabric of the country. This third period saw our lowest result on record pre-coronavirus building up to the two major Brexit deal deadlines in March and October. It also saw a continuing business confidence slide, decoupled from economic confidence, which is likely to do with negativity around the introduction of changes to IR35 in the private sector as explained in the sections above. The fourth period is marked by the outbreak of the coronavirus health and economic crisis in Q1 2020.

Shifts in earnings and capacity

These peaks and troughs also apply for earnings data and show different trends when you compare each group of freelancers relating to political and tax changes. For instance, freelancers in all three groups experienced a big spike in earnings in the final quarter of 2018. We know from data produced by the REC41 that this period saw a real tightening of the jobs market, and that with the first Brexit deadline a few months away government preparations for “no deal” began in earnest. It is quite possible that firms turned to freelancers to fill the gap left by a tight employment market.

However, going back to the three distinct periods, there is a trend of falling capacity utilisation. Prior to coronavirus, freelancers were working four per cent less than in 2015, and when this crisis hit, their spare capacity reached a record high of 5.5 weeks out of 13, pushing earnings down by an unprecedented 25 per cent.

However, on the whole, the shifts in earnings and capacity have been small, highlighting that although freelancers are sensitive to changes in the economy, they remain resilient. Brexit, IR35 and political changes have made their environment much less stable, but they have carried on diligently. Earnings have been fairly stable whilst more and more people have flocked to self-employment from a diverse mix of demographics.

Coronavirus and the future

Looking at the UK’s labour market today, we can see that some people might have turned to self-employment because of the stagnant growth in wages since the financial crash in 2008, If you seek more autonomy and direction in your work and have the skills and confidence to go it alone, self-employment offers you the chance to gain. If not directly from increased income, but from the subsequent gain in quality of life and empowerment.

Although Brexit has been the main defining force in the last years, when we look back over recent data it will be with hindsight moulded by coronavirus, and its related recession.

Industries reliant on freelancers, from the arts to hospitality, have been affected by social distancing and were amongst the first to shutdown. They are also more likely to be limited companies, which excludes them from government support packages. Nonetheless, we are only seeing the beginning of what is likely to be a drawn-out process, and we will continue to monitor IPSE’s Confidence Index data in the future to see how the events will unfold.

The last recession triggered an increase in self-employment driven by freelancing. There is a good chance that the trend towards increased flexibility and increase in home working in traditional employment could encourage more people to seek the control freelancing can provide. However, the gaps in government coronavirus support may mean that the future perceptions of self-employment are hard to assess today.

The delay of IR35 until spring 2021 is welcome for freelancers, but the changes will compound the problems faced by them during the coronavirus pandemic The government have begun to rollout a range of measures to stimulate the economy, focussed on green jobs, infrastructure investment and training. The skills, knowledge and ability to move between projects mean that freelancers will have to be a key part of efforts to stimulate the economy. Whether it means retrofitting homes with heat pumps or building hydroelectric power plants, projects on this scale, will have to rely in part on our smallest businesses to implement. As they always have.

 

Recommendations

Recommendations

In putting together our analysis of historical Confidence Index data, it is clear that the UK’s freelancers are particularly sensitive to changes in the economy and political environment. This can be seen recently with the effects of coronavirus, and before that with both Brexit and IR35.

Below we have set out three proposals for how to mitigate the uncertainty and damage caused by these along with a fourth recommendation aimed at improving the productivity and earnings of freelancers through training.

Make Brexit work for freelancers

Brexit has been a key driver in the uncertainties plaguing the economy since 2016, with freelancers’ confidence stuck in negative figures since the referendum. Freelance businesses need a stable economic environment from which to operate and innovate, and this means knowing what Brexit means for them. 

Government should provide sound and accessible advice and support for the self-employed on the implications of Brexit, particularly in the absence of a trade agreement. Any deal should provide access to the Single Market across key sectors with high numbers of freelancers, such as manufacturing and financial services, and the easy movement of skilled professionals should be prioritised in negotiations.

Ensure support through the coronavirus crisis

The COVID-19 pandemic and subsequent lockdown have placed a huge burden on the self-employed. The government’s Self-Employment Income Support Scheme (SEISS) has provided a vital lifeline of financial support for over 2.7 million people but many self-employed people have been left out of government support. The SEISS also ended in August, two months before its counterpart furlough scheme for employees. 

As we enter the next phase of the pandemic and look to keep the economy going, we need a tailored solution for supporting the self-employed. Government should introduce a fair, flexible and focused support package which can support those who are ill or self-isolating, individuals such as the newly self-employed and company directors who did not benefit from the first round of support, and self-employed workers operating in sectors experiencing sustained economic distress such as the creative industries.

Repeal IR35 and review the tax system

The update to IR35 rules in the public sector had a damaging effect on freelancers’ confidence in 2017. Though postponed due to coronavirus, the anticipated private sector changes are likely to cause similar disruption to freelancers and clients alike. These rules hold back innovative freelancers trying to make their way in the economy and are the symptom of an antiquated tax and employment system, which is also open to abuse by employers seeking to restrict the rights of workers through false self-employment.

The government should reverse its decision to introduce the IR35 legislation or, failing this, delay the roll out to the private sector until a full review of its implementation in the public sector has taken place, and the impacts of coronavirus are better understood. In the meantime, the government should commission a fundamental review of the UK’s outdated tax system and how it affects small businesses and the self-employed.

Improve access to training so that freelancers can develop themselves, and the economy

Skills development is often the silver bullet for improving business’ productivity and earning power. If freelancers had access to training, they could take on new skills and projects, making their businesses much better prepared for changes in the economy.

New skills and qualifications are a gateway to higher earnings and career progression for the freelancers, but finding the time and money to undertake training is difficult. The government’s skills and apprenticeships system has traditionally been overly focused on traditional employees and does not account for the training needs of the self-employed. Only 12 per cent of the UK’s solo self-employed have received job-related training in the last three months, compared to 26 per cent of employees.

IPSE has previously called for reform in several ways – we believe the most effective would be to make training for new skills tax-deductible for the self-employed. This would enable freelancers, particularly in sectors where demand has slowed or disappeared, to gain new skills and adapt their business offer to new markets.

 

Appendix

Mission statement

IPSE’s Confidence Index is a quarterly report that tracks the business performance and economic outlook of freelancers across the UK. It is the only established index of its kind, using rigorously tested methodology and a representative sample of the freelance sector.

The index was created both to inform policy on freelancers and to ensure that their vital contribution is understood and recognised. The aim is for the Confidence Index to be the authoritative indicator used by policymakers at the heart of industry and government.

Defining freelance status

Freelancers are a sub-section of the wider self-employed workforce. For the purposes of this report, the category ‘freelancer’ includes the groups with the highest skill levels in accordance with the Standard Occupational Classification (SOC) Major Groups 1 - 3:

  • SOC1 - Managers, directors and senior officials: Individuals who have a significant amount of knowledge and experience of the production processes and service requirements associated with the efficient functioning of organisations and businesses (e.g. managers and proprietors in agriculture related services; transport and logistics; and health and care services).
  • SOC2 - Professional occupations: Individuals who have a degree or equivalent qualification, with some occupations requiring postgraduate qualifications and/or a formal period of experience-related training (e.g. professionals in science, research, engineering and technology; health; teaching and education; business, media and public service).
  • SOC3 - Associate professional and technical occupations: Individuals who have a high-level vocational qualification, often involving a substantial period of full-time training or further study. Some additional task-related training is usually provided through a formal period of induction (e.g. health and social care associate professionals; protective service occupations; culture, media and sports occupations).

Authors and acknowledgements

This report was written by Inna Yordanova, Senior Researcher at IPSE and Ryan Barnett, Economic Policy Advisor at IPSE. The authors would like to thank Chloé Jepps, Head of Research at IPSE, for her research support, Alasdair Hutchison, Policy Development Manager at IPSE, for his support with the recommendations and Tristan Grove, Head of Press at IPSE for his editorial contributions.

References

  1. Please refer to 'Defining freelance status' in the Appendix for more detail on the three freelancer occupational groups.
  2. IPSE, What Makes a Freelancer? Understanding the Rise of Self-Employment, 2020.
  3. Matthew Taylor, Good Work: The Taylor Review of Modern Working Practices, 2017.
  4. See reference 2.
  5. Bank of England, Quarterly Bulletin 2015 Q1, 2015.
  6. IPSE, The Self-Employed Landscape, 2019.
  7. IPSE, Making self-employment work for disabled people, 2018.
  8. See reference 7
  9. ONS, Labour Force Survey, 2019.
  10. See reference 2.
  11. Department for Work and Pensions, Thriving UK Jobs Market Hits Record High Employment Rate, 2020. 
  12. Resolution Foundation, The Economic History of 2010s, 2020.
  13. OECD, Real GDP Forecast, 2020.
  14. Resolution Foundation, Earnings Outlook Q1 2019, 2019.
  15. IPSE, Research into the impact of IR35 in the public sector, 2018, Unpublished.
  16. ONS, GDP and Investment, 2018.
  17. Bank of England, Monetary Policy Report, August 2019.
  18. In this report short-term confidence refers to the next 3 months after each quarterly survey was taken, while long-term confidence refers to the next year/12 months after each survey was taken.
  19. FT, UK Election: the outcome for markets, 2019.
  20. Office for Budget Responsibility (OBS), Coronavirus analysis, 2020.
  21. Bank of England, Monetary Policy Report August 2020, 2020.
  22. IPSE, No Deal Brexit Scenario Fact Sheet, 2019.
  23. IPSE, A Brexit Deal for the Self-Employed, 2019, Unpublished.
  24. IPSE, Coronavirus report, April 2020.
  25. See reference 24.
  26. See reference 15.
  27. BBC News, German Economy Slips Back Into Negative Growth, 2019.
  28. BBC News, Italy in Recession amid Sluggish Eurozone, 2019.
  29. ONS, GDP First Quarterly Estimate, UK, 2019.
  30. ComRes, Survey of the Self-Employed, 2019, Unpublished.
  31. Andrew Burke, The Freelance Project and Gig Economies of the 21st Century, June 2019.
  32. The data on factors impacting business performance wasn’t weighted before 2015 and that is why the report only looks at the last five years of data.
  33. ONS, EMP01 SA: Full-time, part-time and temporary workers, 21 January 2020.
  34. The calculations in this section do not include the data for Q2 2020 as due to the coronavirus crisis the values recorded then were outliers to the overall trends for the last 7 years.
  35. See reference 24.
  36. See reference 6.
  37. The calculations in this section do not include the data for Q2 2020 as due to the coronavirus crisis the values recorded then were outliers to the overall trends for the last 7 years.
  38. The calculations in this section do not include the data for Q2 2020 as due to the coronavirus crisis the values recorded then were outliers to the overall trends for the last 7 years.
  39. ONS, EARN06: Earnings by Occupation, 2020.
  40. See reference 24.
  41. REC, Jobs Outlook February 2019, 2019.

 

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