The self-employment delusion

Who really wants to be self-employed once they find the grass is not as green as it looked?

As those who work with Jaluch will already know, this year I am judging the Venus Awards Employer of the Year (London Region). That role has led to me having conversations with many business owners in recent weeks. I have come across some truly fantastic businesses, but one conversation stands out from all others. On receiving a nomination for the award, one business owner said to me ‘I don’t want to participate. I don’t employ people. The 100 or more I work with are all self-employed. Why would any modern professional business owner choose to employ people?’

Her comment got me thinking…so she employs no one…is that a good thing? Should Jaluch go the same route if, as she says, all sensible business owners are avoiding the hassle and perils of employment.

But there is just something irking me about this process and what concerns me is that the world of self-employment doesn’t work that well for many people. Working remotely doesn’t work well for many people. Having no job security doesn’t work well for many people and crucially, having no legal rights in respect of pension, holiday, sick pay, equal treatment etc will surely negatively impact on many of those who are self-employed? It would be interesting to know in the UK what the size of the pool of workers is who are confident and willing to be self-employed…10% of all workers? 5%? 20%? What’s your best guess? But if every employer is moving more and more towards shunning traditional employment models and using self-employed contractors or associates instead, what’s going to happen when the self-employed talent pool is all used up? What then?

Some might say that everyone at the moment is saying that they want the freedoms of being self-employed. But I’ve got a lot of years of experience and I know that many simply aren’t suited to that way of life, particularly the home working and frequent disconnect from a ‘team’ of people.

I recall a friend asking me for help to sue her employer for constructive dismissal a few years ago. I didn’t get involved as I didn’t think she was in the right. We’d discussed a few years earlier how she could request part time and home working after having her first child. She said it was what she wanted. I pointed out that her personality was such that she might lose energy and motivation if cut off from her team. She said she wouldn’t and home working would work well for her family. A year later after another child she reduced her working hours yet again. Then she asks me to help her sue her employer two years later as she is demotivated, missing out on opportunities, feeling left out of the loop and so wants to claim constructive dismissal with her last straw moment being not being advised a manager role in her department was being advertised. The problem is, I don’t think you should be able to sue your employer when you brought the whole sorry situation about yourself. What suited and benefited her for a couple of years had slowly become the noose around her neck.

It’s funny how what sometimes feels like utopia can turn out to be our undoing. The reality of course is that we change, life moves on and what works one day won’t necessarily work the next.

I don’t think there are many people at all who are genuinely suited to ongoing self-employment. A few weeks ago, we saw the Supreme Court rule against Pimlico Plumbers requiring them to recognise their ‘self-employed’ plumbers as Workers thus giving them rights such as to sick pay, minimum wage and holiday pay. Deliveroo and Uber have been fighting similar battles as you will be aware. In response to losing the legal battle, Charlie Mullins, infamous owner of Pimlico Plumbers said “The law is the law, but it needs to change to keep up with modern working practices. That is something everyone but the unions seems to get. I agree that people getting exploited need to be protected, but plumbers making more than £150,000 a year are not being exploited.”

I might question exactly how many of his 400 ‘staff’ are earning £150K a year, but details aside, what laws does he think are needed when his use of the ‘self-employed’ is done primarily to side step employment laws – and associated costs and responsibilities?

Or perhaps what he is saying is that he doesn’t believe that well paid people should have employment rights? I note though that he failed to say how many hours and days a week his self-employed plumbers were actually working. I suspect it’s not the usual 35 hours per week!

There’s plenty of self-employed people though who work damn hard and earn a pittance for it. By 2020 it is anticipated that we will all be receiving about 4 parcels a week delivered to our homes. How many of the delivery drivers who come to your home are currently self-employed? How many are receiving anything close to £150K a year? More like £20K a year – if they are lucky and extremely hard working. I can’t be the only one to have read a few months ago about the delivery drivers forced to pee in bottles in their vans because they are not allowed to take breaks. Utopia indeed!

I cannot deny that it is a good business model to ‘employ’ the self-employed i.e. not to ‘employ’ at all.  A clear and easy route to profitability especially given the cost of pensions, sick pay, holiday pay, minimum wage, redundancy pay, rest breaks, the apprenticeship levy and of course NI. But are there any benefits for businesses who choose to continue to directly employ their staff?

  • If I’m right in my judgement that about 90% of our workforce likes stability, financial security and/or the social aspect of working in a team etc that can be found in employment, then, when push comes to shove, those companies that continue to employ staff will be able to tap into the best (biggest) talent pool giving them competitive edge. Would anyone work for one of our infamous zero hour contract abusers if they really had a choice?
  • They also have a better chance of retaining staff which can add value in respect of business continuity, reduced recruitment costs, quality, customer continuity and satisfaction.
  • In a world where the lower skilled are fast being replaced by drones and automation, the race for talent will be in relation to the highly skilled and surely if you find someone who is highly skilled you will want to know that they will dedicate their time to you rather than give you only what time they have left over after servicing others?
  • There are opportunities too around innovation. Often it is our employed staff who are invested in helping us innovate and keep our businesses current. They come up with ideas, they help us develop those ideas and they help us drive those innovations forward to keep us competitive. A whole pool of talent and ideas without the consultancy fees!

So, my thoughts are that the benefits are around the recruitment of great staff, retention of valued staff, quality, continuity, customer satisfaction, competitive edge and constant innovation.

Showing my age, I know, but I recall the Moscow streets around the year 1980 – full of soldiers and street sweepers. Often 5 or more sweeping a street at the time, all in the name of full employment. What do we want for the UK of the future, when AI has all but decimated the manual and lower skilled jobs? Will we provide meaningless jobs for them such as the Moscow street sweepers, will we simply walk past the sullen out of work on our pavements or will any responsible employers step forward and invest in reskilling them and reintegrating them back into business? Those who pick up and drop at will; the self-employed, seldom, in my experience, have any desire to invest in training and development.

Employing people is surely part and parcel of giving back to the community, looking after our community? It will be a very sorry world indeed, as far as I can see, when no one is able to enjoy that social interaction that comes from being part of a team, when no one can be sure where their next pay cheque is coming from, when no one really knows where, or if, they belong.

 

This is a personal blog written by Helen Jamieson. The views and opinions expressed in this blog are solely those of the author and do not necessarily reflect the opinions of Jaluch Ltd. The views and opinions posted in response to this blog are solely those of the contributor and do not necessarily represent those of Helen Jamieson or Jaluch Ltd. Jaluch Ltd is not responsible for the accuracy of the information within this blog.

 

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