Contractors are set to be amongst the beneficiaries of new research into the contracting sector, carried out by the Centre for Research on Self-Employment (CRSE), a newly created thinktank commissioned by the Association of Independent Professionals and the Self Employed (IPSE).
“Given that there was an absence of authoritative research on contracting, IPSE and a group of academics decided to set up this centre for research into self-employment,” explains Professor Andrew Burke, CRSE chairman and Dean of Trinity Business School at Trinity College, Dublin.
The CRSE consists of a network of academics in the UK and abroad, who were drawn together by shared research interests. Following numerous workshops on areas such as self-employment and changes in the workplace, the network has since grown, resulting in a greater amount of research and further perspective on the world of contracting.
The research carried out by the CRSE is intended to drive awareness of the value that contingent staff create, whilst helping to inform and influence policymakers. However, as Burke explains, the potential benefits of the thinktank expand far beyond this.
Contractor benefits are far-reaching
Contractors are set to benefit from the research compiled by the thinktank in various ways. Beyond filling the large void in terms of research carried out into self-employment, Burke emphasises the need for the findings to inform and provide guidance to aspiring contractors, as well as policymakers.
“At the very minimum, we want to provide contractors with the resources to benchmark their own performances with others. But I think over time, we would like to be able to provide some form of training and education for aspiring contractors.”
Businesses and policymakers will also benefit
The thinktank also aims to better serve the businesses who utilise contractors by highlighting the value that the contingent workforce bring to industry. Burke notes the increasing trend of businesses engaging with contractors on short-term specialist projects, to provide innovation and change: “I think there’s a big opportunity for businesses to engage in that model of business.”
Helping to influence public policy is also high on the agenda. Burke acknowledges the complexities of the public policy arena, and identifies HMRC’s ongoing war on ‘disguised employment’ as an issue which places burdens on contractors, not only in terms of policy and tax, but also in that it deters some businesses from engaging with contractors.
“We want to change the perception of contractors, and we believe we can do this by segmenting the contractor labour market, providing better definitions for different types of contractor. Hopefully then we can help HMRC identify those who should be treated as genuinely self-employed and those who should be re-categorised as employees.”
Existing research doesn’t reflect modern working arrangements
Burke acknowledges that existing research into the contingent workforce isn’t representative of modern working arrangements, too often portraying contractors as ‘vulnerable agency workers’, when in fact most contractors are anything but vulnerable.
The typical contractor profile has changed quite dramatically over the past 15 years, moving towards a situation where Burke considers there to be a more symbiotic relationship between employees and contractors.
“Contractors will typically plug skills gaps and enhance the overall team performance, but ultimately, they’re drivers of innovation and change in businesses. Very often they’re the forerunners to the pioneers in the innovation process which helps to create the jobs that employees ultimately take up.”
Burke cites findings from the Freelancer Confidence Index which shows that – within the three main occupational groups: managers, professionals and technical workers – contractors are earning roughly two-and-a-half times as much as equivalent employees.
“That’s not to say that all contractors are performing at this level, but it certainly tells us that there’s something quite different going on. Something which we want to gain a much better understanding of.”
CRSE book provides a reference point for contractors and policymakers
The launch of the thinktank has been supplemented with the release of a new book, compiling all of the CRSE’s research to date. According to Burke, the book will provide a comprehensive reference point not only for contractors and policymakers, but also for other researchers.
‘The Handbook of Research on Freelancing and Self-Employment’ tackles topics such as the growth in terms of contractors in the labour market and the evolving recent profile of contractors. Analysis also delves into the varying work carried out by contractors, as well as the wellbeing of contingent staff within these different lines of work.
“I think one of the interesting features is that, for contractors, the research generally finds very high levels of job satisfaction, and a greater sense of fulfilment than employees,” Burke highlights.
Other areas of research within the book concern the definition of a freelancer, gender comparisons, and how contractors deal with issues relating to social security.
UK policy needs to adapt to flexible working arrangements
Whilst the contingent workforce has emerged as an increasing subject of political party interest, Burke believes UK policy is still underdeveloped in terms of recognition of contractors, in comparison with other countries studied by the CRSE.
“I don’t think it will ever be the case that you’ll end up with a set of definitions of contracting that neatly categorise contractors into legitimate and false self-employment, and then within legitimate, precarious and high performance,” notes Burke.
“But I think the likelihood is that we can help make the problem of misclassification smaller. One area in which I believe the UK is behind is that it hasn’t really started that journey. Australia, for instance, has started to create definitions for different sub-types of contractors.”
The need for increased consideration of contracting arrangements is none more pronounced than in terms of taxation, an area in which Burke suggests most Western European countries are lagging behind.
Focus on international taxation and enterprise largely zones in on investment in new ventures and corporation tax, but Burke believes income tax differentials will need to be addressed as contractors continue to offer their services across national boundaries.
The future is bright for contractors
Despite conceding that UK policy towards contractors is less advanced than certain international markets, Burke sees indications that the UK contractor market is set to make major progress within the near future.
“Whilst public policy interest into the contractor workforce hasn’t yet transpired into policies just yet, I’m optimistic that the UK will not only come out with policies, but will catch up and become one of the leading nations in the field, especially with organisations such as IPSE promoting these issues,” Burke comments.
Perceived improving conditions for contractors will be further augmented by the increasingly entrepreneurial and innovation-driven approach adopted by businesses. With rising demand for industry to continually innovate, update and be flexible, Burke believes that contractors can continue to play a pivotal role.
“If anything, the global market is becoming more dynamic, which strengthens the advantages of contractors. As a result, I think we can expect the proportion of contractors who are performing particularly well to increase,” Burke concludes.