Professional Workers in the Gig Economy Largely Invisible, IPPR Research Claims
Official data fragmented and failing to keep pace with transformation in professional work
London, 20 November 2017 Around a third of UK professionals now work independently- in a transformation at the higher end of the UK workforce largely ignored by policymakers, according a report on professionals in the “gig economy” published today by Odgers Connect with research commissioned from the Institute for Public Policy Research (IPPR)
Concern over unregulated work at the low-end of the gig economy, whilst important, has “obscured the positive role that independent work and self-employment plays in a modern, flexible labour market” the IPPR says.
“The voices of self-employed and independent professional people, and the organisations that employ their services, have, up to this point, largely been absent from the debate on the gig economy. As a result, there is a danger that policymakers will not account for the interests of either group when considering whether and how to regulate,” the report adds.
Commissioned by Odgers Connect, a leading provider of independent consultants, the IPPR notes that many professional workers have taken advantage of technology and changes in the nature of work - often incorporating as sole traders, or setting up microbusinesses – and seem largely satisfied, appreciating greater independence, flexibility, and, often, pay.
However, labour market statistics have failed to keep pace with the economic changes since the financial crisis meaning, according to the IPPR, that “a significant portion of those working in the professional gig economy are invisible in publicly available data”.
“A quiet revolution is underway in professional work,” said Chris Preston, Managing Partner of Odgers Connect. “The massive rise in professionals working independently is a direct result of a transformation in how organisations across both the public and private sectors are choosing to buy their services. Good quality, well-paid professional work benefits everyone and should be recognised and encouraged.”
Odgers Connect asked the IPPR to analyse publicly available data to give a picture of the extent of professional independent working and self-employment in the UK. The report found it represents a sizeable portion of the total economy – generating £6.6 billion– and makes up a significant share of the gig economy, defined broadly to include all workers employed flexibly on defined, project-specific contracts. However, the IPPR notes a lack of research into professional employment in the UK, or its impact.
”It seems clear that the professions are being significantly impacted by a shift to more contract-based, flexible “gig” work, but this isn’t immediately apparent due to a number of disconnects in the official statistics,” its report says.
The IPPR says that occupational classifications haven’t kept pace with changes in the economy and that there is a fragmentation in statistics relating to professional people – across data on self-employment, businesses and registered and unregistered companies. It adds that the UK is “missing out on a wealth of data pertaining to the types of businesses owned by self-employed professionals”.
Other findings include that:
- Almost one in three professional people is now self employed (32%), the third-highest proportion of any occupational group.
- The impact on professional employment is perhaps most clearly seen in the overall shift in employment status for ‘managers, directors, and senior officials’, where over 50% of the workforce in this sector is self-employed. This is also one of the fastest growing sectors of self-employment.
- With around 33% of the workforce self-employed, the ‘professional, scientific, and technical’ sector has the fourth highest levels of self-employment by industry, however this classification is misleading and obscures the numbers of professional people working independently.
- 42% of the self-employed workforce, earns over £15,570 per annum. The IPPR notes that “whilst we believe a significant number earn well in excess of this figure, there is little or no official data available above this level”
- Across the UK as a whole,76% of businesses have no employees, 3,323,865 UK businesses are registered as ‘sole proprietors’ and almost half (46%) of the 1,752,915 companies registered in the UK have no employees.
About Odgers Connect
Odgers Connect provides high calibre professional independent consultants to a full range of private and public-sector organisations. Odgers Connect is the most recently-formed division of Odgers Berndtson, a leading international executive search firm operating in over 50 offices across EMEA, North and South America and Asia Pacific.
For more information please visit: https://www.odgersconnect.com/
IPPR, the Institute for Public Policy Research, is the UK’s leading progressive think tank. An independent charitable organisation, its purpose is to conduct and promote research into the economic, social and political sciences, science and technology, the voluntary sector and social enterprise, public services and industry and commerce. IPPR’s main office is in London, with IPPR North and IPPR Scotland its dedicated think tanks in the North of England and in Scotland.
For more information please visit: https://www.ippr.org/