November 18, 2020

Why freelancer numbers have fallen in 2020 (and why you shouldn’t let it put you off)

Written by Martin Baxter

For years, we’ve been celebrating the steady increase in the number of freelancers in the UK. It became an increasingly attractive and popular way to work – the promise of flexible hours, a varied portfolio of jobs, good work-life balance and a high degree of autonomy drew people out of traditional jobs and into freelancing in greater and greater numbers. But 2020 has changed all of that.  

The latest ONS figures and research from the Association of Independent Professionals and the Self-Employed (IPSE) has revealed that freelancer numbers have dropped dramatically due to the ongoing COVID-19 pandemic. The Federation of Small Businesses (FSB) estimates that lockdown has seen a quarter of a million self-employed people become economically inactive. In their messages calling on the government to offer more support to freelancers as England is in a second lockdown, IPSE highlighted an ‘alarming and avoidable slump in the number of self-employed people in the UK’. Luckily, these have been heard, and the government has now matched the support level of the resurrected furlough scheme, with most (but not all) freelancers eligible for grants for up to 80% of earnings over the lockdown period. 

This blog takes a look at the reasons why freelancer numbers have fallen – and, while it does at times paint a grim picture, we’re shining the light of hope as to why we think you still shouldn’t be put off a freelance career. 

Lack of security 

One of the big drawbacks of a freelance career has always been that it offers less security than traditional employment. There’s no long term commitment between you and your clients, and there’s no sick pay, workplace pension, or other safety nets. This can make freelancing a more risky choice, especially if you don’t have savings to fall back on, or if you are the main income-earner in your household. COVID-19 has exposed these risks, with freelancers finding they don’t have anything secure to tide them through if they get ill or if work dries up. 

Why it shouldn’t put you off: Recent shifts in the labour market have made even traditional jobs less stable, such as the rise in zero-hours and fixed-term contracts. Employment is no longer a guarantee of stability. And such contracts come without the flexibility and independence that you get with freelancing. Many people find they can earn more through freelancing, with the day rate that you can command likely to be substantially higher than the salary for an equivalent role. 

Lack of government support 

There have been several moments during the government’s financial response to the pandemic where it seemed as though the self-employed were going to be forgotten. This left freelancers feeling like they had been cut adrift, despite the fact that the self-employed contributed an estimated £305 billion to the UK economy in 2019 (IPSE). Even the finalised support schemes excluded an estimated 2.9 million freelancers, contractors and newly self-employed, according to IPSE. This has meant some freelancers having to access Universal Credit as their business dwindled away. 

Why it shouldn’t put you off: By working together, freelancers and the self-employed, and the bodies that represent them, have been able to make a case for better support. We at Dinghy are determined to keep fighting for the rights of freelancers, with products like our Freelancer Assist giving the self-employed to get invoices paid and provide a counselling service for when you’re struggling. The more of us that band together, the stronger our voices. 

Creative industries impacted 

The creative industries have been one of the hardest hit by the pandemic, with arts, music, theatre, cinema and television production all having to slow down or stop altogether. Artists, musicians, dancers, technicians, photographers and production staff often work on a freelance basis and the pandemic and subsequent lockdowns have meant finding work has been extremely difficult for a lot of arts professionals. Again, this is a huge blow not only to those individuals but to the UK economy more generally, because the creative industries contribute an estimated £13 million every single hour – that’s £306 million a day! 

Why it shouldn’t put you off: As always, people in the creative industries have responded…well, creatively…. to the problem! Freelancers have been innovating to create in new ways – drive-in cinemas, online socially-distanced theatre shows and pay-per-view gigs. And lockdown has shown us just how important the arts are to our society: it’s been the films, the songs, the novels and the comedians that have got us through the darkest days. A career in the creative industries is one of the most rewarding and exciting opportunities, and for many people freelancing is the best way to get involved, or to gain career advancement. Freelancing enables you to work on multiple projects, follow your passions, and develop new ones. That’s why we’re pretty confident that a career as a freelancer in the creative industries – while it might not always be easy – will always lead to you getting the most out of your creative career. 

Clients cutting costs 

The early days of the pandemic saw a raft of freelancers being released from their contracts as clients panicked and sought to cut costs. It was a distressing time for many as the phone calls and emails with offers of new work stopped completely, almost overnight. 

Why it shouldn’t put you off: The first thing to say is that this problem was not unique to freelancing – there have been many redundancies too, proving that traditional employment doesn’t necessarily offer long-term security. We are cautiously optimistic that businesses are better prepared this time, and have found ways of continuing to work despite lockdown. We also think that freelancers are going to be increasingly attractive to businesses as a way to bring in skills and expertise without long-term financial commitment. Couple this with the fact that the switch to working from home has changed employer-employee relationships and opened up many businesses to the idea of remote staffing, we think there’s the potential that we are entering a real boom period for freelancing. 

The benefits outweigh the negatives

There’s no denying 2020 has been tough on freelancers, and it is devastating to hear that so many have been driven away from this way of working because of a lack of support, industry shutdowns and COVID restrictions. As always, we are hopeful that the benefits of freelancing – the independence, the flexibility, the variety – outweigh the negatives, and that new potential clients are starting to see this too and, as freelancers, we have the resilience to see this through.  

We’re used to those ups and downs (even if they’ve never been quite this big before). Don’t forget that with Dinghy insurance you can pause your business cover while things are quiet, and turn it back on when you score that next gig. Just one way that we’re trying to help freelancers through. If you need some inspo on how to keep work coming in, even in tough times, head to the Dinghy knowledge base where you’ll find expert advice, including ‘How to pick up new freelance clients despite COVID’ and ‘What to do when you lose your biggest client’. You’ve got this (and we’ve got your back)! 

About Martin Baxter

Read more blog posts by Martin Baxter


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