Scotland sees rise in self-employment

Friday 30 September 2016

Self-employment is the main driving force behind the improvements seen in Scotland's employment, according to new research.

Since the recession of 2008-09, Scotland has seen close to 300,000 people choose to become self-employed. The majority of these individuals are women, according to Royal Bank of Scotland (RBS) economists.

A pattern was found throughout Scotland that shows many firms don't expand their recruitment. Instead, they look to freelance workers to meet their needs, providing ample opportunities for self-employed individuals throughout the country. 

This is positive news for self-employed professionals who obviously have in-demand, bankable skills that are seen as high value for larger companies. On the downside, it could mean a greater level of uncertainty for traditional employees, with working hours becoming more uncertain and a risk that they are easier to shed.

RBS' figures - which are part of its Regional Economic Tracker - also shows that there is a growth in older workers, with many people aged over 65 choosing to work for themselves. These findings suggest that self-employment might be serving as a transitional option for those looking to move into full retirement within a few years.

In total, the last eight years have seen an 11 per cent increase in the number of professionals choosing self-employment. This is compared to a rise of just 0.2 per cent in Scotland's direct employment.

Figures have changed over the last year, however, with a faster rise in traditional employment figures and a slight drop in the number of people opting to be self-employed. This might suggest that older self-employed professionals have fully retired, although this is not clear. 

However, the fact that there are 31,000 self-employed individuals in Scotland means that one in nine jobs in the country are now through self-employment, which is incredibly positive. 

Of Scotland's 32 council areas, Orkney had the highest rate of self-employed professionals, with them accounting for around 20 per cent of jobs. Of the mainland areas, many self-employed workers were found in rural places, with the Dumfries, Borders, Argyll and Bute, and Galloway having the highest figures.

Many of the jobs being taken by self-employed professionals were in the IT sector, which is currently experiencing a skills gap in the traditionally employed market. 

Sebastian Burnside, senior economist at RBS, said of the findings: "This is positive news that Scottish employment figures are returning to, and in fact, exceeding, pre-2008 recession levels.

"It is also positive to see the role entrepreneurship is playing within that. This appetite, especially in Scotland, is a driving force within this upturn in results.

"But we have to temper some of the enthusiasm for these results in places. For example, we have noticed an increasing trend in the volume of self-employed workers in construction but a big source of that growth has come at the expense of employee jobs."

By Victoria McDonnell

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