Why did you become self-employed? Money? Flexibility? New research suggests money is not an important motivating factor, and indeed the self-employed may earn less than employees anyway. What seems to the case, according to a new report, is that the self-employed sacrifice earnings for the intangible benefits of working for themselves.
According to a new report by the Royal Society of Arts, the typical fulltime self-employed worker risks social isolation, works longer hours and takes less holiday time than employed workers. On top of that the self-employed earn about £74 pounds a week less than their employed counterparts. As a result, the RSA is now calling for an urgent review of government policy on self-employment.
This new research was undertaken in conjunction with Etsy. The RSA is keen to show the swelling numbers of self-employed can’t simply be attributed to a lack of jobs. On the contrary, the Society argues people go self-employed for the reasons we are all familiar with: flexibility, creativity and self- expression. This view contradicts the TUCs view that increases in self-employment are due to pensioners, odd jobbers and part time workers all making the move to self-employment.
Called, Salvation in A Start-Up, the report’s author believes that at least part of the new self-employed is made up of what could be termed a non-traditional worker. Someone less motivated by money, than the intangible benefits of working for themselves. Anyone who has ever wanted to “escape the rat race” will relate to this.
The report is based on a survey of no less than 1000 microbusinesses. More than 80% of respondents said they were more satisfied with their working lives, yet only 1 in 4 went self-employed during the recession to escape unemployment. More typically, they started a business to exploit an idea or to have more freedom. It seems this type of entrepreneur values being able to live where they want to without the restrictions posed by being employed and accommodate children or older relatives. Other benefits sighted include saving on childcare and commuting.
The Society also says its report is backed up by its own analysis of the UK’s Labour Force Survey. Its analysis claims to shows skilled professional occupations are responsible for 35% of the growth in self-employment since 2008.
Research is always limited by the nature of the sample. Yet this research suggests Government policy has hitherto missed an opportunity to support a new group of self-employed workers.