Despite a bad quarter for the freelancing sector and increasing uncertainty about work prospects and the economy post-Brexit, freelancers are feeling positive about the future.
Conflict in Confidence Index
The latest Confidence Index from the IPSE (the Association of Independent Professionals and the Self-Employed) and PPH (People Per Hour), shows that although freelancers are under increasing economic pressure and have concerns about Brexit, their confidence is back in the black for the first time in two years.
In Q2 of 2018, freelancers’ confidence in their business performance was at 5.3 – up significantly from Q1’s negative score of -3.9, and the highest business confidence score since Q4 2015.
Commenting on the research, Professor Andrew Burke, Dean of Trinity Business School, Dublin, warned that a ‘keep calm and carry on’ approach isn’t adequate in the current climate.
“This time next year freelancers could find themselves in any number of scenarios including being shut off from customers and suppliers in the European Union.”
He recommends that freelancers should preparing a “portfolio of strategies” to sustain their businesses through the range of scenarios that could arise, including a no-deal scenario.
This rise in confidence does seem odd at a time when things are so tough for freelancers, with their confidence in the overall economy ay an extremely low -33.1 (mainly due to Brexit fears). They’ve also seen a fall in their average day rates, from £525 to £394 in the last year and a 12.2% drop just in the last quarter.
Those in associate professional and technical occupations have been particularly hard hit, seeing their average day rate fall from £452 to just £232 in the last year (a drop from £299 this quarter). On top of this, three quarters of freelancers expect their business costs to increase by an average of 13.7% in the next 12 months.
So with pay rates down, costs up and so much uncertainty about work prospects in the future, why has there been a rise in freelancer confidence?
Why freelancers freelance
A recent IPSE report based on a study of 800 self-employed workers found that for many, making lots of money isn’t their only – or even primary – concern. When asked how they measured their career progression, 64% said they did so in terms of their increasing skills and knowledge, while only 50% said they judged it on increasing annual turnover. Work-life balance and client relationships were also important to respondents.
Suneeta Johal, IPSE Head of Research, said that freelancers’ rising confidence in their businesses is “extremely heartening.”
“Against all odds, they now have the highest confidence outlook for their business level since before the EU referendum. Their well-known resilience and determination is doubtless a key factor behind this.”
However, she warned that this confidence among the self-employed “is not unshakeable” and called on the Government to reassure and support the self-employed at a time when there are so many negative forces ranged against them.
She stressed the importance of a Brexit deal that works for the self-employed and moves to restore confidence in the Government’s policies, including stepping back from plans to extend the “disastrous changes” to IR35 in the private sector.
Xenios Thrasyvoulou, founder and CEO of PeoplePerHour, called the threat posed to freelancers by “poorly planned Brexit strategies” and IR35 extensions “deeply concerning.”
“Fifteen per cent of the UK workforce now freelance in some capacity, full or part-time.”
“Freelancers’ business confidence for the next twelve months has risen in the last quarter. It is now incumbent on the Government to make sure that it does not return to post 2015-levels. “
Has the prospect of Brexit already had an impact on your business? Have you seen a decline in your pay? Share your experiences with us.