November 7, 2017
New research identifies nine distinct segments of the self employed workforce
Far from being a homogeneous group, nine distinct segments of the solo self-employed workforce have been identified in new research published by the Centre for Research on Self-Employment, in partnership with IES. This segmentation furthers understanding of the solo self-employed population, including the levels of independence and security, and variation in earnings across this broad section of the UK workforce. The solo self-employed are those who do not employ other people and therefore work on their own account, and makes up 84 per cent of the self-employed workforce.
The recent unprecedented growth of self-employment in the UK has provoked debate around whether this represents a surge in business start-up and entrepreneurship, or an open door to more vulnerable, precarious forms of work. The diverse nature of the self-employed workforce portrayed in this research offers valuable insights for policymakers in their development of support for the self-employed and the regulations which affect them. There is a risk that simplistic, one-size-fits-all policy interventions, aimed at supporting the self-employed or regulating different aspects of self-employment, fail to take account of the diversity portrayed in this analysis.
Whilst shedding light on the almost five million people working for themselves in the UK, the analysis identifies, for example, an insecure cohort, making up around one in five (21%) solo self-employed workers (825,000 workers). The low degrees of both independence and security found in two of the three segments that make up this insecure cohort may encourage further policy scrutiny of this cohort. However, the research encourages the view that the ‘gig economy’, and the working conditions that have become to be associated with it, are not applicable across the breadth of the self-employed workforce.
The report includes interesting findings on the degree of job satisfaction felt by those in the solo self-employed workforce, in comparison to employees in similar roles. Eight out of the nine segments of the solo self-employed identified in the research were as satisfied, or more satisfied, than employees doing similar jobs. What’s more, the majority (52%) of solo self-employed workers experience high levels of independence and security in their work.
The research involved a detailed literature review and analysis of three datasets offering insights on the self-employed workforce. These datasets were the Labour Force Survey, the Family Resources Survey and Understanding Society. Key indicators across these three datasets were selected, in order to create a framework for segmenting different types of self-employment. These three indicators were economic wellbeing, whether the work is independent or dependent and the extent to which the work is secure or insecure.