Tag Archive | "ipse"

162 Million Are Independent Workers, But…

The Association of Independent Professionals and the Self Employed, AKA IPSE, recently looked more closely at independent workers…

What they found is that in the EU and USA there are roughly 162 million people of working age that take part in some form of independent work. That is approximately 20% to 30% of people who are working right now.

However, not all of these 162 million are full time professionals who work for themselves, oh no, the vast majority just like to dabble in the art of self employment.

The IPSE went on to estimate that about 49 million in the EU and USA are what you would consider those who work for themselves and make the majority of their income from that.

They went on to discover that out of these 49 million workers many of them have reported how job satisfaction and feeling of freedom is what motivates them to do what they do.

It’s not all plain sailing though, oh no, because there was a big but that was often found among these self employed workers, many of whom are freelancers and contractors remember.

What is this big but exactly? It’s the fact that many people who work for themselves find they have difficulty switching off and keeping their mind away from the office.

Compare this to your average traditional employee who very often leaves the troubles of the day behind at their place of employment, and you can easily see how it can be a problem.

Take this time of year as an example, the Christmas time, where most employees take a holiday away from work to relax and enjoy themselves. Unfortunately, many self employed in the EU and USA don’t do this at all, and according to the IPSE there are millions who work on Christmas Day.

That’s right, when so many people are tucking into their turkeys and pulling crackers there are millions out there who are still working away on their laptops and holding important conference calls with associates.

Sure, they might sit with the family for an hour or so to open presents and listen to the Queens speech, but…and this is a big but, are they really focused on having a good time and relaxing? My guess would be no.

The research by the IPSE went on to suggest that self employed people who are managers, directors and senior officials often have the most trouble switching off and enjoying Christmas, where they estimate around 800,000 in the UK have these kind of roles, which accounts for roughly 17 percent of all of our nations self employed.

I would also say that at the other end of the spectrum there are other self employed workers who also have a difficult time switching off and enjoying the Christmas festivities. For example, gig workers such as Uber drivers and online freelancers who might feel they have to take all of the work they can get.

If a client contacts them on Christmas Day are they going to turn it down? They could do, however, if they do turn it down then they could potentially lose out on a lot of work in the New Year.

The message here is simple. Yes there are a lot of independent workers out there, 162 million in the EU and USA, but…and this a big but once again, many pay the price for setting their own hours and being their own boss with the fact they have to be always available.

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Contractors Spend 20 Days a Year Chasing Late Payments

According to IPSE, the Association of Independent Professionals and Self Employed, if you work for yourself then you spend 20 days a year trying to get paid.

It’s bizarre if you ask me…when you consider how easy it is now for companies to pay contractors for their services with options like Paypal and bank transfer, I just can’t work out why so many self employed people are having problems getting the money they deserve.

Apparently, it’s mostly big companies that are not paying out, which doesn’t surprise me one bit, because if there is one thing we all know it is that some of these multi national companies can be a real hassle to deal with.

Everyone you speak to just wants to send you to another department, constantly trying to pass the blame. Maybe you can relate to that one if you’ve ever done some contracting work for a big company before? You couldn’t make it up how difficult they are to deal with at times.

The research by IPSE also went to point out that this 20 days a year we all spend chasing up payments equals about £16.5 billion in lost income. This is just plain madness and something really needs to be done about it…pronto.

Well, we might be seeing action taken soon enough, because it appears that people in high places have been taking notice of how big companies are treating the self employed, and if things go to plan then late payment could soon be a thing of the past.

Just imagine how much more cash you could make if you didn’t have to spend 20 days of your year chasing up companies that make billions, but can’t to seem to pay you what they owe? If the small business minister, Margot James is to be believed, then by April of this year all big companies and Limited Partnerships will have to check in twice a year with information about their payment practices.

In other words, if they don’t pay you, then the government are going to be asking why. One of the numbers that is going to be looked more closely at is the average amount of time it takes to pay invoices, and if it is too long then they can expect a fine.

I’m sure this is going to mean that contractors finally start to get paid quicker for their work, it is just a shame that it had to come to this…don’t you agree? What a sad state of affairs when the government needs to step in and say “pay people for the work they have done.” It’s almost as if these big companies expect people to work for free. Some times I think they do.

Nearly 5 million people are currently self employed in the UK, and with virtually nothing being done right now to ensure they get paid, this new move by the government is much needed.

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Vast Majority of Umbrella Contractors are “Very Satisfied”

The Office for National Statistics have just released their latest report, and it has emerged that most self employed people are happy with their status.

Out of the thousands of people surveyed, a staggering 86% commented they were “very satisfied” in self employment, and with a large percentage of these people being umbrella contractors it’s easy to see why the sector is going from strength to strength.

Lorence Nye, policy advisor for the IPSE (The Association of Independent Professionals and the Self-Employed) said in response to the report that “self-employment has soared in popularity since the turn of the century.”

She is indeed correct in her statement, with my calculation being, that as of May 2016 we now have 4.7 million people in the UK who are considered to be self employed, while in the year 2000 that figure was somewhere around 3.2 million. This means in just over 15 years we have seen around 1.5 million more people become their own boss and enjoy all the benefits that comes from that.

Of course, it’s not always easy, and when times get tough many contractors are the first to be cut from the payroll, but overall there is a real sense of achievement from controlling your own destiny and being in charge of who you work for and for how much.

With all of this in mind it’s easy to see why millions of people are very satisfied in self employment, especially since the internet has really taken off and now many umbrella contractors can do most of their business from home. Never before has this been possible for so many UK residents, and it really gives them a chance to achieve a work-life balance that has obviously contributed to the general feeling of happiness.

The report went on to include that only 2% of those surveyed would like to go back and work as an employee. To be honest, I’m surprised that anybody would have that desire after spending a few months or years working for themselves.

However, I guess there are some people out there who enjoy the security of a regular pay packet, although just how secure that really is the subject of another news story completely.

What I do know is this: with so many umbrella contractors completely happy with their situation, it’s only a matter of time before the word starts to get out about the benefits of self employment, which means in another 15 years we should see another 1 or 2 million added to the already large figure of 4.7 million.

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Freelance confidence at record high, but can it last?

The quarterly Freelance Confidence Index is a fair measure of the UK self-employed’s perception of the state of the economy. Moreover, their place within it.

IPSE has just updated that index with Q2 2015 survey results. The mood is good, but there are negatives.

Despite the budget turning the screw on self-employment in general, business confidence is the highest recorded in the Index to date. Confidence in the economy is also moving in the right direction.

However, we must note that IPSE changed the way it reports on the sector this quarter. This is the third update in a row that’s taken on board the views beyond the membership.

Since Q4 2014, the report has included feedback from digital freelance agencies, too. The ‘positive note’ for this update is that the survey pool increased to 710 independent professionals, more than double the amount in some previous updates.

We also have to bear in mind the timing of the poll, between the 15th-30th June. Chancellor Osborne was a week away from delivering his body blow combo in the Emergency Budget, a point noted in IPSE’s summary.

Points of Note from Q2 Survey

In Q1 this year, freelancers’ business confidence was a positive 8.9. That increased to 11.8 in Q2. Confidence in the economy also rose, jumping to 16.1 this quarter from 12.1 last.

On the down side – and perhaps the beginning of a slippery slope – is the freelancers’ perception of business costs. Almost half (46%) forecast the cost of running their business to increase over the next twelve months. That was before Chancellor Osborne announced the tax-free cap of dividends at £5,000 a year in the budget.

If those polled are operating through their own limited (personal service) company, expect to see many more join the 46% forecasting a rise in the next update.

Another interesting factor is the 2.5% drop off of freelancers working on contracts at the time of the poll. In Q1, 82% of respondees had assignments on the go. In Q2, that dropped to 80%.

This drop-off is in line with recent self-employed figures, which show 131,000 self-employed people disappear from the labour market.

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Reaction to the 2015 emergency budget (not good)

As expected, the discussion document for umbrella workers claiming travel and subsistence was officially launched at this week’s budget. The PSC, Umbrella and Independent Professional’s sector has reacted in a negative manner…also as expected.

But is it just a case of sour grapes? Or will the discussion’s impact have a detrimental affect on freelancing and contracting in general?

Well, let’s just qualify one thing before we go any further. It’s only intermediaries supplying contractors who’ll be under SDC who the scrapping of relief will impact. For staff they supply who are deigned not under such close guidance, the reliefs will remain.

But that doesn’t appease IPSE. Chris Bryce, the association’s chief executive, was quick to point to the advantage that large businesses will now have against smaller, one-man band independent professionals.

Is the economy losing its flexible friend?

Often, contractors will travel the length and breadth of the country to provide their service. Even scouting a job can be a costly experience if the client needs to meet the contractor in person before making the hire.

Yes, this is an out of pocket expense for the individual, as is putting a roof over their head to carry out the assignment. But as they can, for now, claim both expenses as tax relief, the only detriment is that it’s an up-front expense.

The inability to claim that money back once the reforms come into play is what’s getting Bryce’s goat. I’m sure more than a few companies and contractors are none too chuffed, either.

In his example, Bryce quotes the likes of KPMG going up against a one-man band for the same assignment. The former could swallow the expense of getting their specialist to the client without discomfort. For the independent, those travel expenses could be the difference between making the job worthwhile them taking or not.

There’s also the danger of larger businesses monopolising the supply of temporary staff. This alone would be awful for the industry. But it’s the impact on the whole of the economy that has Bryce so concerned.

The flexibility other small businesses are getting used to, employing ad hoc staff for specific projects, could also be at risk. They may now face the choice of missing the chance to progress as a business or hire someone full time for what is in fact a temporary position. It’s not ideal.

Let’s hope that the rules are implemented with the care the IPSE chief believes is necessary to dampen these foreseeable negative affects.

There is a silver lining (but nothing to do with the budget)

PPH, the online digital freelance agency, has projected that as much as half the UK workforce could be self-employed by as soon as 2020.

This has been the prediction of the US for the last two years (at least on Google+ – keep up; where have you been?). The question was always going to be whether the UK would follow suit. Based on PPH’s figures and research, the answer is quite possibly in the affirmative.

According to their research, self-employment is growing faster than any other single type of employment at the rate of 3.5% per annum. REC‘s job reports for the last one-and-a-half to two years support that research.

The rate of people turning to self-employment has slowed down in recent months. Even so, 80% of respondents are on record as employing temps to overcome short-term issues or strategic implementations.

Do the two, more freelance vs less umbrella contracting, add up?

I’ve seen the story from both sides. IMHO, online freelance work will, in no way even close, take-up the slack of the hole left by umbrella contractors limited to working locally.

Freelancing from home is a great way to fill time between assignments. But you expend so much time bidding on projects that you have to increase your hourly rate to compensate.

You cannot issue standard job responses, either. Companies who use online freelance agencies are, in the main, more savvy than you think. They can spot a generic job application before the digital ink is dry on the proposal.

The problem then, for the freelancer, is that your increased rate (which is only a reflection of what you should be earning) excludes you from doing business with companies on a tight budget.

Son, you’re on your own

And the proposal problem’s before you even start to consider:

  • the lack of support sites like PPH give the freelancer, siding with the client always (yes, read the comments from ‘sellers’ on their blog);
  • the overall value of a digital project and a client’s perception of the work involved compared with the exponentially greater value of turning up on site to complete your assignment;
  • you are on your own, offering proposals for a job with only your [digital freelance agency] profile as a reference;
  • self-employed rights – the freelancer has none. Moreover, they’re exposed to the ability of the neurotic client or agency’s tendency to say, “I’m the paymaster; you do as I say or pay the forfeit”.

In contrast, brick and mortar recruitment agencies tend to know which contractors are the best fit for their clients’ work. They know the laws that govern them, including mediation without bias, which don’t quite make it to online sites.

Also, PPH, Upwork, etc. – they can become a Dutch auction in a cattle market in no time at all. No one from the sites get involved in setting the price. Nor do they ensure that the price for the job is a liveable one. Nor that the freelancer is not, in fact, undercharging for their services.

So, yes. 50% of the UK’s labour market may be self-employed by the time 2020 gets here. But the way the Treasury is headed, those with the real skills companies need will have returned to full time employment. That’s because the benefits of running a limited company has also taken a massive hit in this budget.

Those left freelancing? They’ll not be the cream of the crop, by any stretch.

That’s neither good for the temp industry nor the economy. It’s such a shame as the prospects for both appeared rosy until the manure hit the fan. Best duck, quick.

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IPSE, ITC and CBI all want a slice of the transport budget

All eyes are on the upcoming budget. The Courts Service is shedding 400 jobs as it strives to find an extra £249M savings this year.

Beyond the budget, the Comprehensive Spending Review will have a further impact. It will help decide how Westminster and local councils divvy up their allowances to enable infrastructure improvements.

It’s the UK’s infrastructure that’s caught IPSE‘s eye, too.

The Independent Transport Commission’s recommendations for greater domestic air travel, to which IPSE was responding, has led to the Airports Commission lobbying government to implement ITC’s findings.

With the Treasury’s purse strings far from loosening, what do all these bodies want to see mapped out? And is there enough to go around?

London holds the key to the country’s infrastructure

Despite signs of economic recovery, it’s fair to assume that not everyone is going to get what they want. The government is caught in a Catch 22.

It knows investment in Britain’s rail, roads and airports is essential. But how far do they splash the cash before threatening other key public sectors, such as health and the environment?

Like it or loathe it, London is key to the discussion. When HS2 materialises, we may well see the capital’s wealth follow the M6 from the south-east up to the north west. But that project might as well be on the moon, given other projects that need more immediate attention.

Transport for London threw its hat into the ring at the CBI’s recent council meeting. It too has an eye on the CSR. It warned of the impact of doing nothing as forecasts point to London’s population reaching 10M by 2030.

Ripples will begin to spread from the capital soon

With a 5-6 year business plan, TfL is conscious of the homes needed in the city. But it also acknowledges that, to keep pace with the change in demographic, 60,000 jobs will be created outside the capital. Included in their plan is Crossrail 2, which they’d hope to see developed by 2020.

The CBI is now considering TfL’s business plan, along with opinions and requests from other stakeholders. It will then compose its own CSR submission based on the myriad options and opinions contained therein.

Contractor’s lifestyle is far departure from generations gone by

And “options” is the name of the game for the ITC’s report, which IPSE was so keen to voice its opinion about. They involve London’s airways, and these are the options the report says make most sense:

  • Gatwick:
    • build a second runway;
  • Heathrow:
    • build a third runway;
    • extend the northern runway.

Each will have opposition; each have their own unique advantages and disadvantages. But after investigating the options, even in the worst case scenario every choice will help sustain the UK’s economic growth, if not enhance it.

The problem independent professionals face is growing demand for their services on site.

The Skills Shortage is Opening Doors; Now we Need the Corridor

In days gone by, a web designer in Manchester would be satisfied with the North-West catchment area. Now, with the growing skills shortage, not being able to get where the big money is could be a real barrier to earnings.

According to IPSE, one in ten freelance assignments awarded in the UK is serviced on the continent. If we can’t get there, the only documentation we’ll be picking up is a UB40. (Yeah, you got to be at least 40 to make that connection…).

Moreover, we must consider the client’s perspective. Development in technology is racing far ahead of the layman’s learning capacity (let alone the development of the UK’s infrastructure).

Businesses want to harness ‘big data’. But they haven’t the foggiest where to put the reins on that particular horse. In the mane [sic], few people have.

It’s therefore conceivable to think that, on occasion, a contractor could be the only qualified technician for a specific assignment on the continent. With all the best engineers in Mountain View, that’s a very real possibility, especially for A.I. projects.

In order to make the most of the top contracts in Europe, contractors must have access to scheduled, efficient road, rail and air travel. That’s why IPSE is behind the ITC report and Airport Commission. It’s in everyone’s interest to see these recommendations begin to take shape in the first 100 days of the new government’s term.

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Are you this year’s best UK independent professional?

Ah, the office competition; remember it well. Who made the most sales this month? Which team member generated the most profit or new business? No doubt about it, a little competition is good for the soul.

But when you’re a freelancer, when do you ever get the chance to put yourselves up against your peers? Whose goals can you measure your own targets and performance by? The goldfish?

For many contractors, the challenge is not comparing your performance to permies (although your client might). It’s to turn up to all of your assignments, check your timesheet in and double-check that what you’ve ‘picked up’ is healthy and compliant.

The only real judge of your ability happens towards the end of your contract. Will the client offer an extension? Or will the agency put you forward for an assignment with more responsibility and remuneration?

If you can remember how and where you’ve hidden it, it’s time to get your competitive head out of storage.

IPSE looking for the best freelancers of 2015

IPSE is staging its Freelancer Awards 2015. Are you an exceptional freelancer or contractor? Does your service soar head and shoulders above all else in your field?

If you answer yes (or even ‘maybe’ – as I say, it’s difficult to judge your own performance), why not enter?

It’s not in the nature of many freelancers to put their public foot forward. If it was more reflective, recruitment and recluse wouldn’t sit so close to each other in the English language.

But to incentivise the 68,000 independent professionals IPSE represents, there are big bucks on offer.

For those at the top of their game, there’s up to £5,000 in prizes per person. Okay, IT Contractors may not think it’s worth sacrificing a day’s pay for such an amount. 🙂

But outside the confines of the wealthiest freelancers, we wouldn’t sniff at £5,000, would we?

No time like the present to exhibit your pro prowess

No doubt there’ll be more awards of this nature as the self-employed sector continues to grow in the UK. IPSE puts the current figure at 4.5M who are going it alone.

A quick bit of maths, that means the association formerly known as PCG represents only 1.5% (-ish) of the entire self-employed populace.

If there’s ever a time you’re going to win this thing, it’s now. 68,000 may seem like a lot of competition, but that’s nothing compared to IPSE’s potential membership.

Seriously, if you’re an ace freelancer or contractor, just do it. The branding itself is priceless. For IR35? Let the taxman try to prove you’re not self-employed if you’ve got this award under your belt.

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