Contractor numbers in the UK and European Union (EU) have undergone a marked and prolonged period of growth since 2008. The rise, which has occurred in spite of a largely stagnant labour market, acts as proof that attitudes are changing towards work and more people are recognising the benefits of flexible working.
This is according to new research commissioned by the Association of Independent Professionals and the Self Employed (IPSE). ‘Understanding Independent Professionals in the EU, 2015’, shows that the number of contractors and freelancers in the EU rose by almost a quarter from 7.7m to 9.6m between 2008 and 2015 and by 99% since the start of the millennium.
“Right across the EU, huge numbers of people are seeing the benefits of being their own boss and they’re finding the confidence to launch new business. An increase of almost a quarter in just seven years is making these professionals a force to be reckoned with,” comments IPSE CEO Chris Bryce.
Contractor growth in the EU – an overview
When comparing these statistics with the fact that the EU workforce as a whole reduced in size from 223m to 218m in the same timeframe, the value of the contracting sector to the economy becomes self-evident.
Western Europe has contributed most to the growth, with trailblazing countries France, the Netherlands and the UK accounting for 1.2m new contractors and freelancers. The UK, which already accounted for the largest share of contractors of any member state, has enjoyed 49% growth during this time. As a result, the UK, along with Italy and Germany, now makes up more than half of the entire EU contingent workforce.
“The emergence of contingent working in the UK was long attributed by some to economic instability caused by the 2008/09 financial crisis and the subsequent lack of permanent jobs,” notes ContractorCalculator CEO Dave Chaplin.
“However, the continued growth of the contracting sector since then - not only in the UK but in multiple other successful EU economies - goes to show that this is an increasingly popular way of working which offers exponential benefits to both worker and client.”
Contractors continue to benefit the economy
It is little coincidence that the more successful EU economies account for so much of the overall contractor workforce. Previous IPSE research, ‘Exploring the UK Freelance Workforce in 2015’, estimates that the UK’s contingent workforce contributes roughly £109bn to the economy each year.
“Independent professionals are usually highly educated and in highly-skilled positions, and they’re vital to a booming economy,” Bryce continues. “The biggest countries have the most established services sectors, so they’re naturally seeing the most new independent professionals. But the newer EU entrants are catching up fast. The trend towards working this way looks set to continue well into the future.”
However, as Bryce highlights, innovation is far from limited to the largest member states. The amount of contractors and freelancers in Latvia has almost tripled in seven years whilst Romania and Slovenia have both more than doubled their headcounts.
Demographic swings as more women enter the market
Core contracting disciplines make up a significant portion of the overall contingent market, with three in ten contingent staff operating in professional, scientific and technical activities. Meanwhile 8% work in information and communication whilst 5% work in the finance sector. Other service activities account for 13% of this workforce.
There has also been a marked rise in the number of women entering the contractor market with a 29% increase since 2008. This has contributed towards a substantial narrowing of the gender divide, with women now making up 47% of contractors and freelancers.
When compared sector-by-sector, women still don’t have a great deal of representation in traditionally male-dominated industries such as information and communication where eight in ten staff are men. However, they do now account for 38% of contingent staff operating in professional, scientific and technical activities.
“It’s great to see greater gender balance in the contracting sector,” adds Chaplin. “Whilst divides still clearly exist in sectors such as construction and IT, women are evidently making up the ground in other areas.”
Contractors more likely to work into their elder years
Notably, 60% of contractors across the EU fall within the 25-49 age bracket. Almost a third are between the ages of 50 and 64 whilst a significant portion work way into their elder years – 7% being 65 or over.
Only 3% are aged 24 or younger, suggesting that a substantial portion of this workforce have taken years to harness their skills before choosing to go it alone. This is supported by the finding that 57% of this workforce are considered to be ‘highly skilled’, meaning they hold a degree at graduate, post-graduate or doctorate level.
The rise in contractor and freelancer numbers in the EU correlates with a steady rise in highly skilled individuals in the workforce as a whole. Since 2004, the EU has seen 19.5m more highly skilled workers enter the market, averaging a 3% increase each year. This suggests that a growing portion of the workforce are recognising their own expertise and their ability to command more lucrative fees in exchange for their skills.
With these trends significantly more pronounced in the contracting and freelance sectors than within the EU workforce as a whole, the report concludes that they are likely to continue unabated:
“It would be reasonable to conclude that because the growth of independent professionals is driven by demography, the trend is set to continue as the EU-28 workforce can only be expected to get older, have more female participation and become more highly skilled.”