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Freelancers are back in demand after two difficult years

1 February 2022

The number of UK freelancers fell significantly during the pandemic but new research has found that businesses are now willing to "pay whatever it takes" to get top freelance talent amid staff shortages.

A new study by PeoplePerHour has found that 84% of business owners believe that freelancers can make a positive difference to their business, with nearly half (45%) more focused on quality than cost when hiring. A fifth (20%) said they would "pay whatever rate it takes" to get the best person for the job.

Xenios Thrasyvoulou, founder of PeoplePerHour, said attitudes to freelancers are shifting. "Where once they were considered a last-minute stopgap that garnered the bare minimum of investment, we've seen an increasing acceptance of the value freelancers bring. Due to a combination of changing perceptions on different forms of working and pandemic-driven resignations, we're seeing more buyers focusing on the quality of the work they can get, rather than treating it as a way to cut costs."

The findings suggest that freelancers are most in demand in marketing and communications. Areas such as growth hacking (2050%), influencer marketing (1618%), content marketing (985%) and Instagram marketing (1109%) have seen a huge rise in the number of projects posted on the PeoplePerHour platform in 2021 compared to 2020. Retail businesses are most bullish about hiring freelancers, with 25% increasing their freelancer budget since COVID started, compared with 18% of all businesses overall.

However, the potential boom in demand for freelancers comes after two very difficult years for self-employed workers. The Self-Employed 2021 Landscape report, published this week by the Association of Independent Professionals and the Self-Employed (IPSE), has revealed that the number of solo self-employed workers in the UK actually fell by 5% from 4.3 million in 2020 to 4.1 million in 2021. This was the second consecutive year that the solo self-employment sector has decreased since the 40% growth in self-employed workers between 2008 and 2019.

Behind the headline figures, however, the findings show different regions experiencing different levels of decline. While Northern Ireland (-31%) and Scotland (-15%) reported the largest falls, Wales (30%), the East of England (8%) and the Northeast (4%) reported significant increases.

Derek Cribb, IPSE ceo, said: "While certain regions, demographic groups and occupations have thankfully defied expectations, the fact remains that these bright spots don't make up for the mass exodus of self-employed workers during the pandemic. The sad truth is that the sector has started 2022 in a highly fragile state and if it is going to recover its pre-pandemic growth after Omicron, then the government needs to intervene and ensure that damaging and confusing legislation like IR35 is properly reviewed and that the conditions are right for recovery."

In fact, new research conducted by Yonder for Mushroombiz has found that 32% of Brits aged 18-24 (gen Z) and 27% of those aged 25-34 (millennials) want to start their own businesses in the future. The poll of 4,000 British adults found that millennials are most likely to set up business within the next year.

Ed Surman, managing director of Mushroombiz, said: "While the pandemic has proved challenging, young people remain undeterred, having both the drive to launch their own business and the confidence in their own skills to make it a success. As the nation looks to bounce back from the pandemic, we should be inspiring these young entrepreneurs to make their ideas a reality."

One issue that is making life hard for freelancers, however, is late payment. Research by WondaPay, a payment platform for freelancers, has highlighted the extent of the late payment crisis:

  • One in five freelancers say that they are used to waiting at least two months for payment;
  • Only 16% never have to chase late payments;
  • 24% of those polled said the situation is worsening.

In fact, a quarter of all freelancers say they may look for a permanent role because of late payment. JJ Rathour, founder and ceo at WondayPay, said: "Throughout the last decade, freelancers have become an increasingly important part of the UK's workforce … but without reliable payment, the position of many freelancers simply isn't sustainable. No-one should have to wait months to be paid for the work that they have done."

Any small firm or freelancer that is experiencing difficulties because of late payments can contact the Small Business Commissioner for advice and support.

Written by Rachel Miller.

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