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Number of self-employed IT professionals up over 50% in past six years, data shows

The number of IT professionals working as contractors has increased at nearly twice the rate as the growth in the number of IT sector employees over the last six years, according to data obtained by SJD Accountancy.

The data shows that the number of IT contractors jumped from 76,972 in 2010 to 119,617 in 2016, a rise of 55.4%. At the same time, the number of employees in the IT sector increased by 29.5%, from 509,000 to 659,000.

The number of self-employed people in the IT sector has increased at more than twice the rate of the whole economy. The number of self-employed workers in all sectors increased by 20.7% since 2010, from 3,869,708 to 4,672,472.

According to SJD Accountancy, the growth in self-employment in the IT sector has been driven disproportionately by women. 13.9% of IT contractors are now women (16,658) compared to 9.3% in 2010 (7,158).

According to National Statistics, which supplied the data, a person is self-employed if they: Run their business for themselves and take responsibility for its success or failure. Self-employment can be in the form of a sole trader, a partnership (two or more people who run a business) and an owner of a limited liability company (also responsible running the business). 

Derek Kelly, chief executive officer of SJD Accountancy, commented, “The increase in the proportion of the IT workforce operating as contractors has been driven by demand from both IT professionals and organisations utilising IT skills.

“Contracting was traditionally seen as the riskier option but the erosion of employment rights since the financial crisis have changed that perception. Freelancing is increasingly both a career and a lifestyle choice. In high demand areas such as IT, contractors are often at no greater risk of being out of work than employees, and the higher take-home pay is usually sufficient to cover any gaps between contracts.

“Hiring permanent staff involves a higher level of commitment and is something organisations are more likely to do when there is more certainty over future demand. Economic uncertainty, which has been compounded by Brexit, has persuaded many organisations to defer hiring and look to contractors to plug skills gaps.”

SJD Accountancy says that contracting is particularly suited to women who may have childcare responsibilities. Contractors can choose not to work during the school holidays, and usually have greater flexibility than permanent employees about the hours they work and from which location.

Kelly added, “There are more women in IT in both permanent and temporary roles, but the increasing proportion of contractors who are women is particularly significant as contractors tend to earn more than their permanent counterparts, which suggests that the pay gap between men and women in the IT sector is likely to be narrowing.”

According to a recent survey of IT contractors by SJD Accountancy, the proportion of IT contractors earning £500 per day or more has risen from 39.1% to 42.1% during the past 12 months as competition for skills drives up pay. Demand for IT contractors with cyber security skills is particularly strong, with growing numbers of organisations struggling to recruit and retain cyber security professionals with the right blend of technical and management skills.

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