UK freelancers hit hard during pandemic

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A new study on the independent economy in the UK has found that two-thirds of workers in the sector have been negatively affected by the pandemic. The Association of Independent Professionals and the Self-Employed study found that nearly a fifth of freelancers now consider a return to working life.

Before the global pandemic, the UK concert economy was never far from the headlines. By 2018, the number of self-employed workers in the country had climbed to 5 million workers – including 2 million self-employed – and that number continued to grow, as individuals discovered that they could dictate their own schedules and the type of work they engaged in, while enjoying better pay and a better work-life balance, outside of a company.

After the best part of two years of Covid-19 anxiety, however, the picture is very different. With the economy shutting down, much of the work of the self-employed dried up during the lockdown. Meanwhile, the persistent threat to public health has exposed a number of weaknesses within the independent economy in particular.

Although neither have a permanent employer, a self-employed person will work for themselves, usually producing goods or providing services directly to a consumer or clientele. This group includes everything from independent bakeries to plumbers or pest control specialists. Freelancers, on the other hand, typically provide pieces of work to other people, who then sell their work. If that sounds like a regular job without the security of a permanent contract, that’s because it often is.

In the post-crash economy, it’s easy to see why cost-conscious employers are increasingly favoring relationships with the now 2 million-strong freelance pool, rather than hiring staff at this time – the. Although individuals can derive a comfortable income from their work, they often depend on a single client, while that client has no legal obligation to grant sick leave, paid time off or contribute to the fund. employee retirement – ultimately paying them less in the long run. perform then – while retaining the right to terminate an agreement with little or no notice.

In the years when the concert economy was apparently booming, these shortcomings were overlooked. Before the pandemic, freelancers were said to have added £ 300bn to the UK economy, while 54% of freelancers told a Kalido poll they made more as freelancers and had improved their quality of life. During the boom days, the idea of ​​needing job security or sick pay didn’t seem particularly relevant – assuming there wouldn’t be an unprecedented global pandemic for disrupt things. Since the start of 2020, however, the benefits that workers lost for a moderate increase in their average income have become painfully apparent.

Which, if any, of the following actions have you taken in the past year?

A survey of the self-employed in the UK found that 67% of these businesses were negatively affected by the Covid-19 pandemic, while 60% said their turnover had declined as a result. According to the Association of Independent Professionals and the Self-Employed (IPSE), as they struggled to land contracts, 15% of freelancers reduced their daily rates or fees in the past 12 months – an increase from conclusions of May 2020, when only 9% had lowered daily rates.

Andy Chamberlain, Director of Policy at IPSE, said: ‘This research shows the true long-term financial impact of the pandemic on the self-employed sector, which has contributed more than £ 300 billion a year to the economy before the pandemic. Not only did two in three freelancers see their turnover drop: two in five experienced a drastic drop of 40% or more. One in ten people have even seen their turnover drop by more than 90%. These are huge setbacks for an independent business: setbacks many of which will not recover for years to come. “

Even as the UK economy pushes for a return to ‘normalcy’, then it highlights the growing longevity of the pandemic’s impact on independent businesses. At the same time, 52% of freelancers said they did not feel supported by the government – including 31% who did not feel supported at all. The researchers suggested that concerns about the government’s fiscal policy – namely IR35 reforms and the impact on contract negotiation and gaps in government support during the pandemic – contributed to the feeling that the government does not support the sector.

Reasons to consider an alternative to self-employment

As it becomes clear that these pressures will continue to plague freelancers after the lockdown, even amid the apparent “recovery”, a growing number are weighing their options in the industry. While the IPSE made a point of pointing the finger at the 56% of self-employed people who can still imagine being independent until their retirement, 17% said they would already consider a return to life in a company, and 8% have stated that they were already actively seeking such a change. Additionally, 14% said they could imagine that while self-employment still worked for them, they could now imagine how that might change in the future. In total, 39% of those polled said they could potentially leave the independent sector in the coming years.

The most common reason was the idea that they could earn more by working. Even without taking into account the potential for collective bargaining as an employee (and 35% also said they wanted to access “labor rights”), it is indeed possible. With a company’s reputation behind them, they would be less likely to have to cut prices to take on work.

Meanwhile, an additional 40% said they longed for a return to job security. As a staff member, even if there is no work, they would either receive a paycheck, or be required to receive severance pay that could secure their finances for several months. In the world of self-employment, however, there are no such guarantees.

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