Contracting is no longer seen as the risky option, as insurance sees self-employment jump ahead of financial services average
Insurance has seen a rise in self-employment ahead of other areas of financial services, while employment continues to decline.
There has been a surge in self-employment in financial services, while steady employment is decreasing, according to data from Nixon Williams.
Insurance saw an increase in self-employment of over half (55.8%) between 2011 and 2016.
Excluding figures for brokers and agents, who have traditionally had high levels of self-employment, the figure for those employed in life and non-life insurance increased by over four fifths (84.9%) over the same period.
Numbers of self-employed working in insurance
Life/non-life insurance: 4,805
Activities of insurance agents and brokers: 5,302
Life/non-life insurance: 8,886
Activities of insurance agents and brokers: 6,859
Financial services sees self-employment rise
Source: Nixon Williams
Source: Nixon Williams
This is more than the average rise for self-employment in financial services, which saw the number of professionals working as contractors rise by almost half (46.3%), while employment dipped by over 4% over the same period. This is despite banks looking to bring more contractors in-house.
The number of self-employed workers across all sectors has only increased by less than a fifth (17.5%), from around 4m to 4.7m, meaning that the rate of increase of self-employment in financial services is nearly three times the average for the whole economy. Self-employment numbers in the insurance sector are rising at an even starker rate.
Pay and lifestyle benefits leading the self-employment charge
Nixon Williams chief executive Derek Kelly suggests that the rise in self-employment in financial services is because workers now prefer the “pay and lifestyle benefits” of contracting, while businesses in the sector are looking to cut down employee numbers and seek “greater flexibility” in the workforce.
The boom in start-ups and advisory roles following the financial crash and large-scale redundancies has also likely impacted on the figures, says Kelly.
In addition, contractors’ have skills that allow them to move easily between roles at different employers, while Kelly identifies a “tug of war” between employers that want to control contractor numbers without losing skills.
Contracting no longer the bigger risk
While self-employment may once have seemed like the riskier option, this is changing. The wearing down of employment rights since the financial crisis is changing minds, according to Nixon Williams.
Kelly continues: “Contracting is increasingly both a career and a lifestyle choice. Contractors with in-demand skills are often at no greater risk of being out of work than employees, and the higher take-home pay is usually sufficient to cover any gaps between contracts.”
He concludes, “Contractors in areas such as banking technology, for example, are highly sought-after to work on Brexit-related transition projects. Banks often try to bring these people in-house but our research consistently shows that for 90% of contractors it is a conscious lifestyle choice and not a stop-gap to finding a full-time job.”