Research has shown exactly who has chosen to go it alone – the UK’s self-employed. The research was commissioned by the Institute for Employment Studies (IES) in conjunction with Employment (CRSE) and aims to show how the self-employed community is formed in the UK.
Nine segments
There are nine distinct segments of the self-employed community (who employ no one else), identified in the report. Based on levels of independence, the security of their work and how much they make, eight of the nine reported as feeling satisfied, or more satisfied, than salaried employees performing the same roles.
In short, while there are some disparities, the report shows that entrepreneurs and self-employed people seem broadly happier than people who work for someone else.
High levels of independence
More than half of the solo self-employed (i.e. they don’t employ anyone else) reported high levels of security and independence. Only 15% of solo workers said that they have little autonomy over their work. Their main suggestions involved clarification of their employment status.
However, one in five self-employed people (that’s more than 825,000) classify themselves as ‘insecure’. The study found that they were more likely to be found among the drivers, carers and labourers in the UK, and that they tended to be less qualified and less likely to have financial security.
The categories
From the five million people who are self-employed in the UK, the research showed the following broad segments of workers.
- Dependent, insecure, low pay – These people were more likely to have become self-employed because they struggled to find employment. They have lower than average levels of control over their work and include professions such as cleaners and drivers. This group equates to 8.9% of the solo self-employed (348,200).
- Independent, insecure, low pay – Around 7% of those in this segment have no qualifications at all, making self-employment an overwhelming decision. They have lower than average earnings and include car mechanics, those in artistic professions and shopkeepers. This represents 8.2% of the solo self-employed (320,600).
- Independent, secure, low pay – This segment is mostly male (at 87%), and have a relatively high degree of control over their work. Their wages are below average, and they include traders, builders and farm workers. They represent 22.7% of the solo self-employed (889,900).
- Dependent, insecure, mid pay – This group reports the highest level of job satisfaction, but have less autonomy when it comes to working hours. Only 12% have a private pension and it includes building labourers, carers and childminders, equating to 4% of the solo self-employed (156,500).
- Dependent, secure, mid pay – This segment has workers with low qualifications (just 16% with A-levels or above), and they report below average autonomy for much of their work. They earn more than the average but less than their employed peers. They equate to 1.3% of the solo self-employed (50,900).
- Independent, secure, mid pay – They report the highest autonomy levels when relating to the pace of work and work hours. Median earnings are about average but lower than employees in a comparable role. It includes IT professionals, financial advisers, gardeners, skilled makers and restaurant owners and represents 19.5% of the solo self-employed (767,700).
- Regulated, secure, high pay – This is a very qualified segment (87% have degrees) and they are more likely to have a private pension. They’re also more satisfied with their jobs than employees. Most are in the medical field and represent 2% of the solo self-employed (77,800).
- Mid-independence, secure, high pay – Very qualified and most have average levels of control. Jobs include TV/film tech roles, book-keepers, property managers and construction, equating to 5.1% of solo self-employed (198,400).
- Independent, secure, high pay – The highest paid group, they tend to be in the legal and business sector and represent 4.1% of the solo self-employed (162,400).
