Record Numbers Become Self-employed

In the three months February to April 2012, almost 4.2 million people were registered as self-employed; that’s the highest figure since records began back in 1992, according to the Office for National Statistics (ONS).

This comes on top of figures of falling unemployment as the rate falls to 2.61 million, down by 51,000 vs the previous quarter.

Private sector employment also saw an increase as 205,000 more people found work in the private sector, whilst 39,000 more lost their jobs in the public sector – The South West of England suffered the biggest loss of public sector posts.

Gerwyn Davies, labour market policy adviser at the Chartered Institute of Personnel and Development (CIPD), welcomed the fall in unemployment and the rise in private sector taking on staff, but was cautious about the seemingly positive news from the self-employed.

“Closer analysis of the figures finds a sharp rise in self-employment more than accounting for the small fall in unemployment.  A rise in self-employment may, in itself, be a good thing, however previous analysis from the CIPD found that the recent rise was less a sign of a resurgent enterprise culture, and more evidence of a growing army of part-time ‘odd jobbers’ desperate to avoid unemployment.”

One economist even stated that the record level of self-employed people in the UK was an indication that Brits were "not confident" about about finding work and that they found "setting up for themselves" to be the best option.

Another reason for the rise in the self-employed may be that a number of companies have been taking more self-employed staff on as contract workers rather than commit to taking on full-time workers, thereby keeping their workforce more flexible. Some employees feel that, given this shift in focus, they may appear more attractive to employers if they maintain a self-employed status and be more readily available to perform ad-hoc work.

Employment Minister, Chris Grayling, however, also welcomed the fall in unemployed and the fact that the Government had recently launched its New Enterprise Allowance to help jobseekers to set up their own business. Grayling remained cautious about the future but added:

“These figures show that with the right support in place it is possible for the private sector to create jobs while the public sector employment is falling.”

For the full details see the ONS bulletin Labour Market Statistics, June 2012.

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