New research has identified the nine distinct segments which make up the UK’s broad solo self-employed population.
The report found that the self-employed can be segmented according to variations in earnings, levels of independence and how much security their working situation provides.
Eight of the nine segments of solo self-employed – those who do not employ anyone – are as satisfied, or more satisfied, than employees doing similar jobs
The research found that over half of the solo self-employed workforce exhibit high levels of independence and security. Furthermore, of the total solo self-employed workforce, 15 per cent exhibit little autonomy or control over their work, and more should be done to clarify their employment status.
One in five solo self-employed workers – amounting to over 825,000 people – have been classified as insecure. They are more likely to be found among the UK’s cleaners, drivers, carers and labourers, as well as those in artistic occupations. These people tend to be less qualified and are much less likely to have financial security such as a private pension.
Nigel Meager, Director of the Institute for Employment studies said: “There are almost five million people working for themselves in the UK. Coverage of this group in the media and political debate often focuses on the gig economy, which is in reality only a small part of a dynamic and far broader self-employed workforce.
“The findings show huge differences between segments of the self-employed in many areas including earnings and job security, as well as work/life balance and overall satisfaction. I hope the findings encourage policy-makers to take this diversity into account when developing support for the self-employed as well as any regulations that could affect them.”
Suneeta Johal, Director of the Centre for Research on Self Employment said: “Different segments of the self-employed need bespoke support to improve their position. For example, those who lack independence and are financially insecure need urgent support and incentives to save for their future.
“The groups with little independence in their work would also benefit from a statutory definition of self-employment, which would help to clarify their employment status.
“All segments of self-employment could really benefit from better access to training and skills development opportunities. Not only does skills development improve pay prospects, it also allows the less autonomous self-employed to move into more independent roles or build themselves a broader base of clients.”
Who are the self-employed?
|1. Low pay, dependent, insecure | 348,200, 8.9 per cent of solo self-employed
People in this segment are generally less qualified than other groups. It has the highest proportion of people who became self-employed because they could not find other employment. They report lower than average levels of autonomy and control over their work. The average hourly earnings are below other segments and their employed equivalents.
|Driver and cleaners|
|2. Low pay, independent, insecure | 320,600, 8.2 per cent of solo self-employed
This segment is highly qualified and only seven per cent have no qualifications at all. Self-employment was an overwhelming choice for this group with only three per cent doing so because they could not find other employment. They have lower than average earnings compared with the average across all segments, and around half the amount earned by employees in these jobs.
|Shopkeepers, car mechanics and artistic occupations|
|3. Low pay, independent, secure | 889,900, 22.7 per cent of solo self-employed
A predominantly male segment with a below average proportion of those with a degree. This group exhibits a relatively high degree of autonomy and control over their work. Median hourly earnings of this segment are close to the average across all segments but once qualifications, type of self-employment and other factors are controlled for, their earnings are below average. They are also below the average for employees in comparable jobs.
|Farm workers, tutors, traders and builders|
|4. Mid pay, dependent, insecure | 156,500, 4 per cent of solo self-employed
Only 14 per cent of people in this segment are graduates and there is an above average proportion that became self-employed because they could not find other work. They have below average levels of autonomy, particularly relating to work manner and hours. This group has the low median hourly earnings, but once other factors such as qualifications and type of self-employment are controlled for, the earnings differences are not statistically significant. Only 12 per cent have a private pension. However, they report the highest levels of job satisfaction.
|Childminders and carers, and building labourers|
|5. Mid pay, dependent, secure | 50,900, 1.3 per cent of solo self-employed
Workers in this group have low qualifications. People in this segment report below average autonomy for many aspects of work. They earn above average compared to other segments, but less than their employed counterparts do. Job satisfaction in this segment is close to the all-segments average but higher than among employees in similar roles.
|6. Mid pay, independent, secure | 767,700, 19.5 per cent of solo self-employed
There is a relatively high proportion of graduates in this segment. This group reports the highest levels of autonomy relating to job task, work pace, task order and work hours. Median earnings are similar to the average across all segments, but much lower than employees in similar roles. The people in this segment have higher job satisfaction than both the average across all segments and employed counterparts.
|Trainers and coaches, IT professionals, financial advisers, hair and beauty, skilled makers, gardeners, restaurant and B&B owners and others|
|7. High pay, regulated, secure | 77,800, 2 per cent of solo self-employed
A highly qualified segment with only two per cent becoming self-employed due to a lack of employment opportunities. The highest proportion became self-employed because of the nature of their job. This group is likely to have low levels of control and autonomy due to regulatory processes and practice hours. Median hourly earnings are significantly higher than the average across all segments, but similar to employees. The people in this segment have greater levels of job and life satisfaction than employees in similar roles.
|8. High pay, mid-independence, secure | 198,400, 5.1 per cent of solo self-employed
This group is highly qualified, though a relatively large proportion became self-employed following redundancy. Most professions in this segment have average levels of control and autonomy, although this depends on the regulatory processes of each profession. People in this segment earn above the average of other segments, but less than their employed counterparts. They are more likely to have a private pension and report higher levels of job satisfaction than employees.
|Functional managers, TV/film technical roles, construction and property managers, book-keepers|
|9. High pay, independent, secure | 162,400, 4.1 per cent of solo self-employed
This segment is highly qualified and 24 per cent became self-employed for better working conditions or job satisfaction. This group shows relatively high levels of autonomy and control. It is the highest paid segment, at similar hourly rates to their employed counterparts. This group is more likely to have private pension and they are more satisfied than employees in similar professions.
|Legal and business professionals|