The numbers of contractors and other independent professionals – or iPros – across Europe have seen recession-busting growth, underlining fundamental changes to the way work is performed, representing a shift from ‘having a job’ to ‘working for clients’.
These are the key conclusions of a major new study commissioned by PCG and the European Forum of Independent Professionals (EFIP), which shows that iPro numbers in the UK have grown by 63% since 2004.
“This report proves conclusively that freelancing is the fastest growing sector of the European labour market,” notes PCG director of policy and public affairs Simon McVicker. “More importantly, it contains important recommendations for policymakers, businesses and freelancers themselves as we enter this brave new world of working.”
Recommendations for iPro stakeholders
The report, titled, Future Working: the rise of Europe’s independent professionals (iPros), surveyed the contracting sector across nine European Union (EU) member states. It calls on stakeholders in Europe’s contracting sector to take action to nurture and grow the contribution iPros make to Europe’s businesses and economies. Highlights include:
- Policymakers should conduct further research, include iPros in policy planning, recognise contracting as a legitimate form of work and allow iPros a voice
- Professional bodies should take into account iPros’ needs, as well as those of employed members, and ensure training is “practical and attractive…through increased use of online and other flexible forms of training”
- iPros should develop their own voice, alongside developing and gaining support for their own innovative support structures. Contractors are also urged to “take responsibility for career development in a more active and coherent way”
- Clients of iPros should “recognise that the growth in iPro working presents challenges to traditional management practices”, review contractual issues that inhibit iPro working and “recognise the implications of late payment and other practical concerns that iPros often encounter”.
“The importance of recognising this powerful and expanding group and the huge contributions they make to economies across Europe cannot be overstated,” continues McVicker. “Considering how vital this sector is becoming, it is crucial for decision-makers to take on board the recommendations from this report.”
iPro numbers have risen by 45% since 2004
Between 2004 and 2013, across the European Union’s 27 member states, iPro numbers have grown to 9m from 6.2m, which represents an increase of 45%. However, the headline figure masks considerable variation in each of the nine countries surveyed in detail.
At the top end, iPro numbers are thought to have increased by 95% in the Netherlands, 88% in Poland and by 85% in France over the same period. Italy showed the lowest growth during that time, yet still saw a 12% increase in iPro numbers. The UK ranked fourth out of the nine countries surveyed, with 63% growth.
The number of iPros as a percentage of the total employed population also showed wide variation. In the UK 2.1% of those in work are iPros. This rises to 2.9% in the Netherlands, but falls to 0.8% in Italy and Germany.
Linked by their “independence and professionalism”
With labels such as contractor, freelancer, consultant, interim, locum, iPro and others to choose from across multiple sectors and industries, defining independent professionals is a challenge. The report’s authors chose to use the definition of iPros used in a previous PCG report as:
- Independent – working for themselves with no employees
- Professional – engages in service activities not in the farming, craft or retail sectors and are generally highly skilled and well qualified.
The report highlights that, despite their disparate backgrounds and sectors, iPros are linked by their independence and professionalism.
This report proves conclusively that freelancing is the fastest growing sector of the European labour market
Simon McVicker, PCG
It adds that “their independence allows their specialist skills to be available more flexibly and adaptively across the economy”. Clients benefit because they can access a level of skill and experience they would otherwise not be able to for cost or availability reasons.
The report also highlights how iPros are distinct from other groups of self-employed workers, as they “are defined by their work in high-value, high-knowledge professional sectors”.
Are iPros part of the labour market or are they businesses?
As the report explains, being classed by some policymakers as ‘disguised employees’ or ‘sham self-employed’ is not a phenomenon restricted to UK-based contractors and their treatment by HMRC.
Because they do not fit into accepted definitions of small businesses, entrepreneurs or self-employment, iPros face suspicions in most member states that their status is not ‘genuine’ and is a ‘sham’ designed to minimise fiscal and other liabilities.
The research also found that there is debate over whether iPros are a specialist aspect of labour markets or are essentially commercially orientated and part of the business community.
Useful advice on contracting across Europe
For contractors considering going contracting in one of the nine countries surveyed, the report’s appendices contain insightful summaries of legal frameworks for businesses, the social security set up and any state support for start-ups.
PCG’s McVicker concludes: “The way we work is changing and unless policy, legislation and business practices change with it, we risk clipping the wings of the very sector of our workforce best placed to create growth and prosperity for our collective economy.”
Commissioned and funded by EFIP and PCG, the study was conducted by Patricia Leighton, Professor of European Social Law at the IPAG Business School, with contract researcher Duncan Brown. It represents detailed research started in June 2012 into the independent professionals sector in nine European Union member states.