Analysis: Self employment spike mirrors shift to agency & “zero hours” working

Figures from Office for National Statistics closely mirror drop in number of full-time employees since 2008 credit crunch. Trade union reps across private and public sector report "significant" rise in agency, casual and fixed-time workers in 2012.
by - 7th February 2013, 8.05 BST

velodrome construction workersOfficial statistics have confirmed that the number of self-employed workers in the UK has risen steadily throughout the economic downturn, now making up 16.8% of the entire workforce.

(Pictured: ONS says taxi drivers and construction trades make up close to 8% of all self-employed workers)

The most common jobs for self employed workers were either as taxi drivers or in construction trades, where unions say there has been a marked spike in “bogus self employment” and agency working in recent years.

The number of workers who are self-employed in their main job rose 367,000 between 2008 and 2012, with the largest rise (60%) since 2011.

Analysts say the increase amounts to around 85% of the decline in the number of employees in work – suggesting that large numbers of workers are becoming self employed after losing full-time jobs and failing to find another job.

TUC general secretary Frances O’Grady said: “Self-employment is normally a very small part of the workforce so the fact that it’s been outstripping employee job growth shows that the UK labour market is far weaker than headlines suggest.

“The recent rise in job levels is being driven by self-employed, part-time and temporary jobs, rather than the full-time, permanent work that many people want and need.

“There may be perfectly good reasons for being self-employed but it would be naive to think that all these workers are really budding entrepreneurs.

“These figures instead suggest that many employee roles are being replaced by self-employed positions.

“Bogus self-employment is bad news for staff as they miss out on vital rights at work, such as paid holidays and employer pension contributions, without having the advantage of being their own boss.”

A survey published last month by the Labour Research Department confirmed increasing use of part-timers and shorter than normal-hours contracts.

Almost two-thirds of trade union reps (65%) reported “significant” use of agency, casual or fixed-term workers in 2012.

36% said their employer made significant use of arrangements like these in 2012 and more than a third of those (38%) think they will be used more in 2013.

LRD found that 23% of union reps expect their employer to use “zero hours” contracts (who have no guaranteed hours); 9% foresee the use of short shifts; and 8% the use of other short-hours contracts.

Agency workers are used most widely, followed by fixed-term contract workers and – less frequently- casual workers.

The LRD researchers found that “uncertainty” and re-structuring are two of the reasons given for these insecure forms of employment, alongside more ‘traditional’ peaks in demand or ‘supply’ teaching.

ONS says the increase in self-employment took place across the UK, apart from Northern Ireland, where the number of self-employed workers decreased.

Self-employed people tend to work longer hours than employees – on average 38 hours a week compared with 36 for employees.

Self-employed workers tend to be older than employees and are more likely to be male.

In 2012 the average age of the 4.2m self-employed was 47, and 70% of them were men, while the average age of the 25m employees was 40 and only 51% of them were men.

The proportion of workers who were self-employed was highest in London (18%), followed by the South West (16%), while the lowest proportion was in the North East (11%), followed by Scotland and Yorkshire and the Humber (both 12%).