UKs self-employed grow by 6.3% since the credit crunch
Overall UK employment only rose by 2% over the same period.
Von Essen’s research reveals that the rate of the UK’s self-employed is growing much faster than the average across Europe’s 15 leading economies* with an average fall of 3.2% in the number of self-employed people in these countries (see table below).
Von Essen says that the significant increase in self-employed consultants in the UK partly reflects the improvement in the country’s economy and an increasing popularity for contracting and consultancy amongst professionals as the country comes out of recession. Last year, the UK’s annualised growth was 1.7% compared to its negative growth during the credit crunch.
Von Essen argues that the flexibility that consultants offer to employers has been an important factor in supporting the UK economic recover as employers can buy in the expert skills they need for a limited period. Consultancy has also grown as a career choice for highly skilled professionals as they can command higher remuneration than permanent employees and have more control over when and where they work.
Lydia Marref, partner at Von Essen, commented, “The increase in the number of consultants in the UK is a resounding success. It is important for the UK to build on this by to encouraging a flexible labour market and to ensure the allocation of skills that allow this. For example, consultants should be encouraged to broaden their skill base so that they have the skills needed by business.”
“Not only does the UK produce and use a lot of contractors – it also very successfully exports this skills base across the world in sectors like IT and oil and gas. We work with hundreds of consultants who cut their teeth in the UK but now enjoy the challenges and experience of working on overseas projects.”
Von Essen points out that across Europe there has been a shift to using consultants in the highest earning economies: the Benelux countries (44.2% increase in self-employed people), France (5.8% up) and Germany (4.2% up).
By contrast, the countries that faced a sovereign debt crisis and high unemployment after the credit crunch (Portugal, Italy, Greece and Spain)have seen a decline in consultants working in their countries, with an average decrease of 12% .
Marref added, “On the whole, northern European countries are typically bigger users of self-employed consultants. They are also the countries that have tended to weather the Eurozone crisis best, and while that’s not just because they have large populations of consultants, it definitely helps.”
“The nature of consultancy work means that consultants will work in different countries. When accepting a role in a foreign country, the consultant will be faced with a series of challenges: obtaining a work permit, understanding the countries tax and legal system. Von Essen was established to address these challenges and assist consultants navigate through them.”
Increase in percentage of consultants in highest earning economies
Increase in the number of consultants since the credit crunch (2009 – 2013)
Portugal, Italy, Greece and Spain
*The EU15 are the number of countries in the EU prior to the ascension of ten candidate countries on 1 May 2004.