Contractor training and development, alongside the wide variation in contracting practices across Europe, are two key issues arising from the latest PCG/European Forum of Independent Professionals (EFIP) report.
This is according to the report’s principal author, Patricia Leighton, Professor of European Social Law at the IPAG Business School. She has drawn out these themes in an exclusive interview with ContractorCalculator.
“There are some quite significant political and cultural differences between the nine different states analysed in the report,” highlights Leighton. “The UK emerges, with the Netherlands, as quite distinctive in many ways.
“It is also clear that in many sectors, Europe’s independent professionals (iPros) undergo very little structured training in technical and business skills. Given that knowledge workers such as iPros represent the UK and Europe’s source of competitive advantage in the global economy this is clearly a cause for concern.”
Contractor training and professional development
The report, Future Working: the rise of Europe’s independent professionals (iPros), provided some unexpected insights. Leighton explains: “We were quite surprised by the picture that has emerged,” says Leighton.
There are some quite significant political and cultural differences between the nine different states analysed in the report
Professor Patricia Leighton, IPAG Business School
“The UK’s Department for Business Innovation and Skills (BIS) conducted a major UK-wide skills review six months ago. I asked, ‘Did you look at the skills development of freelancers?’ and the response was mostly negative. What little data there is available suggests that Europe’s self-employed do very little training.”
“One of the many things taken for granted by an employee is that their employer will provide them with some training and development. Some of this will be job related and some personal development. In either case, the employer will pay for it.” This is clearly not the case with contractors.
Training and learning in the context of business change
According to Leighton, an interview conducted with one of the many freelancers for the report revealed one vital insight into the gap in structured iPro learning: “Our research showed that iPro training and development focuses around three areas: technical skills, business skills and structured learning in an industry context.”
“One interviewee, a highly skilled technical writer in the pharmaceutical sector, said he was able to go on refresher courses about technical advances, and much of the business side he handed over to his accountant.
“But it was with the structured learning that the writer struggled. He maintained his technical skills and knowledge but did not get the changes in business context within which his skills were being exercised in the same way as he had when he was employed.”
A big hole in UK and European learning and skills policies
Leighton’s research also showed that holes in national and European skills policies: “Politicians have picked up on the fact that the UK has to stay high on various international league tables for education, training and competitiveness, and rightly invest in skills policies to support this. This investment underpins innovation.
“But policy is silent on the part that iPros have to keep the UK competitive – you have to become employed before you can receive support. Policy needs to acknowledge the need for contractors and freelancers to retain and enhance the position of these groups who do not have someone to pay for them to train or indeed to take fee-earning time out to develop skills.”
Leighton believes that tangible steps, such as providing training and development in a more attractive, relevant, flexible and affordable format is an essential step policymakers must make. And she says it needs to be done quickly, before the UK slips down important global league tables.
Europe’s contracting sector is no level playing field
With 15% of Europe’s workforce self-employed and 4% of the workforce classed as iPros, one would assume that contracting and freelancing are widespread throughout the continent.
Leighton notes that one of the unexpected outcomes of the research was the depth and breadth of significant political and cultural differences over contracting in the nine countries surveyed in the report.
“At one end of the scale,” she says, “we have the UK and the Netherlands, and to a lesser extent Belgium and Finland, which are distinctive by their flexibility and the openness and lack of barriers to entry.
“Germany, on the other hand, makes life very difficult for iPros. And when 90% of the workforce are employed and are all voters, it is understandable why German politicians have not campaigned to deregulate the market for iPros and their services.”
Some professions and associate professions are highly regulated
In some of the countries surveyed, many of the business freedoms taken for granted by knowledge workers in the UK simply don’t exist. Rules requiring professionals to be self-employed, not able to form companies, and unable to offer their services alongside other professionals are some of the less restrictive ones.
“Italy’s professions are very stratified and the liberal professions, such as law, are self-managing monopolies,” continues Leighton. “During our fieldwork, when we asked groups like these to identify any issues or causes for concern, their response was that everything is OK. People in Italy’s regulated professions like law and finance simply have no affinity with professionals in the UK. ”
“In contrast, in both the UK and Finland you don’t have to be a member of the legal profession to offer legal advice. There are moves in the UK to regulate the iPro providers of legal services, who are currently not regulated at all.
“And it seems the deal by some governments is to offer currently unregulated iPros – such as IT contractors, freelance writers and translators – greater recognition in return for becoming more regulated.”
Limited companies and agencies are seemingly a UK phenomenon
Of the iPros sampled during the research, only 10% traded via a limited company. The vast majority are effectively, as the UK would understand it, self-employed sole traders. Leighton says there are several reasons behind the lack of incorporation outside of the UK.
In some states self-employment is forced on iPros by law because of their profession, or iPro’s simply reject the idea, because the costs of incorporation are so high or because there is no financial benefit to incorporation.
“Starting a company in the UK is incredibly quick and cheap compared to most of the rest of Europe. And in several of the countries we researched, until you start earning large sums of money, far greater than typical iPro earnings, there is simply no financial benefit to incorporating.”
The attitude to securing work varies greatly, but it seems only iPros in the UK make extensive use of recruitment agencies: “We were told that informal ways of finding work, such as networks and referrals, were the principal sources of work for most iPros, and that agencies were either not active in their sector or not very good at finding iPros work.”
Leighton concludes: “iPro training and the wide variations of the iPro context across Europe are only two of the key issues that the research has identified. We are planning further work and will also be looking more at what clients look for when commissioning and managing iPros.”