Being paid peanuts is driving you nuts

Being paid peanuts is driving you nuts

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Despite poor payment culture, work satisfaction among the self-employed remains high, new report reveals

Nearly half of self-employed people have completed projects, in some cases worth up to £60,000, but have never been paid for their work, a new study has found.

The report, Working well for yourself: What makes for good self-employment?, by IPSE and the Involvement and Participation Association (IPA), found that poor payment culture was one of the main things dragging down wellbeing for the self-employed.

Researchers at IPSE and the IPA surveyed 800 people and held a number of focus groups with self-employed people from across the UK and asked them about what ‘good work’ means to them.

While the majority said they were happy with their working lives, of the 43 per cent who were never paid at all, almost two thirds (58%) were 18 to 34-year-olds.

And 63 per cent of all respondents said they had been paid late for at least one project. The study also heard how it was ‘relatively common’ to be asked to work for free.

Since Matthew Taylor published his report last year into modern working practices, there has been a focus on ‘good work’. But what is good work?

The report by IPSE and IPA set out to identify what exactly constitutes good self-employment.

Aside from the payment culture, which the report suggests needs to be something the government tackles by enshrining the prompt payment code in law, other factors that were highlighted in the study shed a more positive light. These include client relationships, worklife balance and skills, progression and a sense of purpose.

According to the survey, work satisfaction levels are incredibly high among independent professionals (7.3/10). This echoes the findings from the CIPD Employee Outlook Survey 2015, which found that general work satisfaction is higher among the self-employed at 81 per cent, compared with 61 per cent among full-time employees.

Nine out of ten also said they have a high level of control over their daily tasks and how they are performed. The reported suggests that this could be an important factor behind the high work satisfaction among the self-employed.

One participant said: “The good thing about being able to work when you want is I can get up late in the day and do nothing, and then if I need to work at three in the morning because I feel the need to, then I can.”

Autonomy goes hand in hand with worklife balance. Being in control gives self-employed people the flexibility to manage their working lives around other commitments such as family.

The flipside to this is that some individuals sometimes feel that they cannot turn down work, and therefore may work longer hours. But that is not the case for everyone and the report clearly states how one participant is more than happy to work a 60-hour week for themselves over a 35-hour week for an employer.

Director of the IPA, Nita Clarke, said: “It is hugely encouraging that so many of the self-employed enjoy meaningful and satisfying work.

“But it is also vital that we take a close look at those areas where work quality is less positive, such as around poor payment culture, access to government support and misunderstanding among some client organisations about how the self-employed should be treated.”

Much of the media and political narrative around self-employment is fixated on entrepreneurs, and the idea that growing a business is what primarily motivates those working independently. But the Working well for yourself report debunks this assumption.

The survey asked respondents how they measured career progression. A significantly large proportion, 64 per cent, answered with increasing their skills and knowledge as a measure of progression and 50 per cent said increasing their annual turnover.

Very few respondents – only 16 per cent – wanted to be able to hire other people.

One IT consultant in Manchester summed up the self-employed spirit saying: “I don’t need a grandiose role; what I want to do is make a difference. For me, it is the ability to work on projects that are interesting and will also leave a legacy.” 

Others talked about not wanting to climb the corporate ladder and instead staying focused on what they were good at. Another participant said: “In the company I was in, progression meant being a manager, but I wanted to stay on the technical side.” 

This, according to the report, suggested that rather than striving to be empire-building entrepreneurs, the majority of self-employed people simply want to continue working for themselves and become “experts in their fields”.

Up until now, the government has been funnelling funds into helping businesses grow, which is not only a problem for the self-employed, but also for the UK economy.

The report therefore recommends that in a bid to help this sector develop and tackle this country’s productivity crisis, the government should offer more training incentives for upskilling. It suggests offering adult education vouchers and ensuring the self-employed benefit from the Apprenticeship Levy and the Flexible Learning Fund.

Another interesting theme that emerged from this study was how firms who engage with the self-employed do not always fully understand how they work and this can sometimes lead to conflicts, particularly around unclear contracts.

Commenting on this, Ms Clarke added: “Companies need to train their HR and procurement managers in the right way to engage with self-employed contractors.”

Simon McVicker, director of policy at IPSE, said: “This is a hugely significant and timely report. With ‘good work’ the issue of the hour after the Taylor Review, it is vital that we understand what makes for good working conditions not just for employees, but also for the self-employed.

“The findings are remarkable. Firstly, although it is good to see that the self-employed are generally very happy with their work, it is truly shocking to discover how far poor payment culture still goes.

“While the government has taken steps to improve it, and it clearly has a serious impact on the quality of some self-employed people’s working lives, this is not universal. For most, skills development is much more important.

“With self-employment on the rise across the UK and beyond, it has never been more important to support this way of working and make sure it remains a positive choice for all.”

By Jordan Marshall

Research