Satisfaction levels amongst contractors are significantly higher than those of permanent employees, as more workers around the globe choose to make the leap into flexible working.
The findings in ‘Independent work: choice, necessity and the gig economy’ – a study by McKinsey Global Institute (MGI) – show that 97% contractors are much happier than their permanent counterparts, recording greater satisfaction levels in almost every aspect of their work.
The report also shows that:
- Up to 162m individuals in the US and EU now engage in independent work
- Overall, three in ten independent workers are contractors and four in ten are ‘casual earners’
- In the EU, 68% of independent workers are so out of choice
- In the UK, 57% of all independent workers are women
- Contractors consider autonomy and flexibility to be the biggest benefits of flexible working
The findings show that workers are increasingly realising that becoming your own boss more than pays off. If you’d like to learn more about contracting and potentially make your first steps into the sector, take a look at our extensive selection of trusted contractor guides and tax calculators today.
Self-employment in the UK reaches 14m
MGI estimates that the UK has 14m independent workers - roughly a quarter of the UK’s working-age population. Of these workers, 56% use self-employment to supplement other income, emphasising the recent shift away from the traditional employment model.
Helping quash misconceptions about why people enter the contingent labour market, the report also notes that almost three quarters of independent workers in the UK do so out of choice, not necessity.
How many workers are choosing to be their own boss?
Self-employment has evolved rapidly over recent years, and studies on employment have struggled to keep pace. MGI acknowledges that knowledge gaps have resulted, opting to split its survey demographic into four groups to gain a better understanding of flexible working:
The UK findings, which were largely consistent with US and EU figures as a whole, show that ‘free agents’ – or contractors – make up 32% of the total, whilst ‘casual earners’ account for 42%. This makes a total of 74% of the UK’s independent workforce who choose to operate this way, a figure which easily exceeds the EU average of 68%.
Meanwhile, only 12% and 14% of respondents fall in the ‘reluctants’ and ‘financially strapped’ categories, counteracting the dated misconception that self-employment is simply a fall-back option for many.
What are contractors so happy about?
It’s the very same workers who choose to work independently who report the greatest job satisfaction, and the workers who use self-employment as a primary source of income in particular.
As well as a substantially higher sense of gratification overall, ‘free agents’ – or contractors - reported superior satisfaction levels to permanent employees in twelve individual aspects of work that they were asked about, including:
- Opportunities for development
- Assignments undertaken
- Recognition received
- Ability to express creativity
- Level of income
In fact, the only areas where contractors didn’t report notably higher levels of work satisfaction than permanent staff were security over income and work-related benefits. With workers increasingly valuing self-governance as a critical aspect of work, there has never been a better time to go contracting, as MGI highlights:
‘These findings echo a large body of academic work pointing to the importance of choice, autonomy, and self-agency as key drivers of worker satisfaction. Free agents [contractors] cite higher satisfaction than traditional workers across issues ranging from the creativity they can express to opportunities for learning and recognition.’
How strong is the UK freelance sector?
It’s not only the high proportion of skilled contractors in the UK – MGI estimates 4m – but also the relatively low proportion of low income households in the UK’s independent workforce that is particularly impressive.
Only 15% of the UK’s self-employed fall into this bracket. This is the lowest figure across all countries surveyed – France, Germany, Spain, Sweden, UK and USA – and when compared with the 39% recorded in Spain, indicates that the UK has a particularly highly skilled contingent workforce.
“We may be experiencing skills shortages in certain sectors but this study goes to show that there are very few countries that are better equipped than the UK when it comes to talent,” comments ContractorCalculator CEO Dave Chaplin.
“The fact that more people are recognising they can make more for their skills and are choosing to make the leap into contracting points towards a prosperous future for the sector.
“This is backed up by MGI’s findings that one in six workers in traditional employment would like to work independently. With more businesses acknowledging the mutual benefits of hiring contingent staff, the climate is perfect for a new wave of workers to dip their toes in the contract market.”
Do we need an employment practices review?
The report comes shortly after PM Theresa May announced a Government review into employment practices to explore ways in which flexible workers can be better supported by policy.
However, as Chaplin points out, these findings prove that the majority of the contingent workforce are more than happy in their current arrangement:
“Many people are guilty of assuming contractors make up a vulnerable and victimised portion of the labour workforce, and that they’re in need of added protections.
“The employment practices review seems to have been influenced by this misconception, but these findings go to show that the pros clearly outweigh the cons for the vast majority of our self-sufficient flexible workers.”
Not only that, but a recent survey by ContractorCalculator confirmed that 80% of self employed contractors do not want any rights at all and are happy with their current mode of working.
What are the contracting challenges ahead?
Though MGI acknowledges that the contingent workforce is starting to show up on the radar of policymakers, academics and companies, it claims there are still many challenges to overcome.
Recognising that engaging with contractors can allow companies to become more agile, efficient and productive, MGI encourages organisations to seek to achieve a healthy balance of internal and external talent, and to ensure contractors are treated fairly and ethically.
Intermediaries and innovators are encouraged to recognise this growing sector by creating new solutions and services tailored to independent workers. MGI proposes financial solutions developed to help self-employed maintain steady income between assignments.
The onus is also on contractors themselves, who are urged to continue developing differentiated, specialist skillsets, with MGI adding: ‘Each independent worker has to operate like a self-contained small business.’
Now is a great time to go contracting!
As the report highlights, contracting is a route that a growing number of professionals are choosing to go down - and they’re a lot happier for it. Now is as good a time as ever to join them. If you’re thinking about making the move to achieve greater job satisfaction, you can start by checking out our catalogue of expert guides covering every element of the contracting journey.