Over-50s leading labour market sea-change

Monday 14 April 2014

The UK labour market is experiencing something of a sea-change, thanks to professionals over 50-years-old.

Figures from the Office of National Statistics (ONS) showed that the age-group is leading the trend for self-employment, which has taken root in Britain. Indeed, more and more people are changing the way they work and choosing to enter the contractor market.

Of those that became self-employed between the first quarter of 2008 and the last quarter of 2013, more than 70 per cent were aged 50 and over.

Perhaps unsurprisingly, self-employment gradually increases through the age groups, with the experienced most likely to choose this form of employment.

The 18 to 24 age bracket makes up just five per cent of total self employment, compared to around 38 per cent of those 65 and older.

Of course, the latest figures come as no surprise, with ONS claiming: "Younger workers are by nature less experienced and often lack the capital of older workers. [So younger workers ] are much less likely to be self-employed than older workers."

Nevertheless, the way Britons approach work is evolving and ONS had previously reported that the ranks of freelancers, sole traders and contractors are growing.

In February, it was revealed the number of self employed people in the UK hit 4.37 million, rising by 172,000 to reach an all-time high for self-employment in the country.

It is believed that around 14.5 per cent of the total British workforce is now self-employed.

Speaking at the time, Georgios Nikolaidis, economic policy adviser at the PCG, claimed the increase was "more proof that the way we work is changing".

"The rise in those choosing to go into business on their own account is now outstripping the growth in traditional employment at a rate of almost three to one," he explained. "The persistence of self-employment, growing uninterrupted from 2004 onwards, points towards a structural change in the labour market rather than a cyclical reaction to the financial crisis."

Freelancer growth has also been gradually rising, increasing by 63 per cent over the last decade.

The PCG claims that this trend needs to be met with changes in the labour market to alter the way people view and approach work.

While businesses are realising the benefits contractors can offer, policymakers have yet to catch up.

Mr Nikolaidis explained that companies of all sizes have started to incorporate the flexibility self-employed workers offer into their business model, as a key way of combatting risk and unlocking "serious competitive advantages".

However, to encourage more businesses to take on contractors, the PCG has previously called for a best practice example to be created.

This will prove integral as new legislation targeting off-payroll workers takes effect, in order for businesses to understand how to engage contractors and freelancers.

Chris Bryce, chief executive officer at the PCG, claimed examples of malpractice are unhelpful and what is needed instead is clear examples of how to use self-employed individuals in the right way.

By Victoria McDonnell

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