It is a scary time to be self-employed. At the beginning of lockdown, many self-employed people saw their income evaporate overnight. To make matters worse, the Government’s support for those in this situation was criticised for not being comprehensive enough, with several groups of people falling through the gaps.
Last week, new data from the Office for National Statistics (ONS) showed that the number of self-employed people had fallen by 154,000, suggesting that the challenges of the pandemic had forced them to find more traditional employment.
And yet there is also evidence that companies now, more than ever, are looking for freelance talent. With the uncertainty of the next few months discouraging businesses from making permanent hiring decisions, they need short-term solutions.
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Freelancer platform YunoJuno found in a survey of 250,000 freelancers that rates for some sectors have even increased. Those with in-demand digital skills are the top winners, with social media managers now averaging a fee of £422 per day, up 27 per cent since the start of the crisis. App and web developers have also seen a 16 per cent increase, as many businesses scrambled to get their services online.
In the aftermath of the last recession, self-employment boomed. The numbers of people working for themselves rose 10 per cent between 2008 and 2012. So are we on course for a similar effect this time round?
What’s driving the change?
The experience of working from home is likely to have got more people thinking about going freelance, as they look to maintain those flexible aspects of their working life. Or it might be getting furloughed or laid off due to Covid-19 that has jumpstarted that ambition to go it alone.
Research carried out by AllBright, an all-female members’ club in London, found that 61 per cent of respondents are planning a career change thanks to the pandemic, with one in four determined to set up their own businesses.
For Rachel Fowler, an AllBright member and interior designer, coronavirus was no deterrent to quitting her job at a major design agency and setting up her own company in April.
“I haven’t looked at the pandemic as a negative thing – I’ve just thought: life goes on. I want to come out of this and I want to make it, my business will grow.”
It is not the first time she has made a major career change, having previously worked as an intensive care nurse. That experience has taught her how to recognise the right time to move on. “If you feel deep down inside that you actually want to switch career, then I would advise someone to do it,” she says.
She advises anyone thinking of working for themselves to use the internet to find communities of other entrepreneurs and freelancers, saying that having a network is crucial.
Top tips for going self-employed
IPSE’s Andy Chamberlain outlines the key areas to think about.
- Decide on your structure: “The sole trader route is probably simpler, but setting up a limited company could give you more control over how you get paid.”
- Get insurance: compare life assurance and injury policies to make sure you are covered if you areunable to work
- Look at pension options: “When you’re considering different pension products, you should look for something flexible. Bear in mind that you can also get fairly generous tax relief on your pension.”
- Claim expenses: Make sure to claim what you can to secure tax relief.
Is it a good time to go it alone?
“The pandemic has disrupted the world of freelancing and self-employment,” says Andy Chamberlain, director of policy at the Association of Independent Professionals and the Self Employed (IPSE).
“Many self-employed people have seen their incomes undermined and lots of people were excluded from support.
“But although it’s a gloomy picture for some, we’ve also heard from other people who’ve used lockdown and the turbulent job market as an opportunity to take the leap.”
There is never any guarantee of success from self-employment. However, technology developments mean it is easier to find work and do it remotely. This has only been made more possible by the mass switch to home-working. “Now is a great time to go freelance,” says Liron Smadja, the director of global expansion marketing at freelance marketplace Fiverr. “The market for freelancers is growing incredibly fast.
“It wasn’t so long ago that going freelance was a huge gamble that was only really available to people who had a contact book full of potential clients. But that’s changed. You can now go online and find clients for any niche skill set in a really short space of time. And best of all, they don’t even have to be in the same country as you – can find clients all over the world.”
But is this all just a short-term boost as companies scramble to meet the needs of the pandemic? Shib Mathew, founder of YunoJuno, thinks it will be a more lasting trend.
“I think this will continue. This idea of tactically deploying talent that is perfect for a project based on previous roles and expertise is vital in today’s rapidly changing economy.”
The seasoned freelancer
Hannah King, web developer, from Bristol
“I’m a freelance web developer. I’ve been doing this job for 19 years – 15 years of those freelance so quite a long time.
“When I first became freelance there weren’t as many freelancers, so I was mainly working with in-house teams. Things have definitely evolved over the years.
“I’ve been mainly remote-based for quite a few years now. In recent years I haven’t been going into that many offices at all. Quite a few agencies tend to be in London and the US, so they don’t really need me to be on site and I’ve worked with them for a few years.
“Since the start of lockdown, there’s definitely been a big increase in demand. I get a huge number of enquiries, more than I was last year. It’s not just because of the move to remote, a big part of it was the delay in reforms to IR35 [the Government’s off-payroll working rules]. That made a huge difference.
“I would definitely recommend joining a network or a platform, because they can help you navigate IR35, all the paperwork and red tape. I’ve been on YunoJuno for a few years and am getting most of my work through there.”