Ever since June 2016, when the UK Brexit Referendum set in motion a divorce between the UK and the EU, it has been unclear how – or indeed if – the two sides would eventually come to an agreement on the specifics of the split. The uncertainty has had a pronounced effect on the British economy in the intervening years, hampering things like import and export activity and depressing property markets nationwide. At the same time, the pending separation has also caused the number of EU citizens who come to live and work in the UK to plummet, and Brexit is having a significant impact on the UK job market.
The labour shortage created by the drop-off in foreign workers is having an impact on almost every industry in the UK, which is fuelling the largest rise in wages in a decade. It also means that for the first time in what seems like forever, employers no longer hold all of the cards and workers are gaining an increased amount of flexibility in their careers. In fact, rising labour demand and dwindling supply mean that it’s a better time than ever before for UK-based workers to strike out on their own and embrace freelance work opportunities. Here are 5 ways Brexit is impacting the British labour market, and the reasons why Brexit is turning the UK into a freelancer’s world.
1: Uncertainty equals higher pay rates
One of the biggest reasons that the looming Brexit is boosting the number of freelance workers in the UK is the fact that businesses crave flexibility in the face of uncertain market conditions. That means freelancers can find more opportunities and can command far higher pay rates than ever before because businesses are now willing to pay a premium to build a workforce that can scale up or down as economic conditions require. Best of all, the freelance positions that are becoming available now aren’t likely to disappear post-Brexit because they’re a reflection of current staffing needs, not future projections.
2: The labour shortage is in high-skill industries
As previously mentioned, the number of EU citizens coming to the UK to work has slowed dramatically in the wake of the Brexit referendum, and that’s creating an imbalance in the labour market. The fact that it’s been happening at a time when nationwide unemployment is at a low not seen since 1975 is preventing the market from rebalancing itself and is driving up wages in multiple sectors. What’s important with respect to the rise of freelance workers is what types of jobs are facing the worst labour shortages. A recent survey indicates that nine in ten employers are having difficulty recruiting candidates in high-skill positions, meaning that the bulk of companies turning to freelancers to fill their staffing needs are doing so in response to a dearth of skilled labour in their field. Once again, that means more work and higher pay for freelancers in the labour pool.
3: A boom in recruitment and HR needs
The Brexit labour crunch is also creating a fertile environment for freelance workers in some unexpected places, as well. As skills shortages worsen, growing pressure on businesses to secure needed talent is sparking a corresponding boom in the HR sector, creating even more opportunities for freelance workers. The need for businesses to scale up their recruiting and retention practices is causing an upswing in corporate investment in human resources courses, and forcing many to bolster their existing staff. It’s an example of a feedback loop that’s beneficial for freelancers since they can seek positions as speciality skills recruiters in their field of expertise since they’ll be able to more adept at spotting skilled candidates in this competitive new hiring environment.
4: Attitude toward freelancers is shifting
Finally, the last sign that Brexit is turning the UK into a freelancer’s world is the fact that businesses in every sector are beginning to rely more and more on freelance labour, with recent research indicating that 64% of UK businesses have already embraced the practice. In addition, labour market analysts believe that as much as 50% of the labour force in the UK could go freelance by 2020. If that comes to pass, it would represent a marked shift in the attitude of UK businesses toward freelance workers. That shift could be borne of necessity or the realization that workforce flexibility is worth paying a premium for, but either way, it’s great news for contractors.
5: The bottom line
Any way you look at it, freelancers and contractors are in the ascendancy in the UK. Their numbers have been on the rise for quite some time now and show no signs of slowing down. With the Brexit deadline closing in, and employment already near historic high-water marks, it seems certain that the Brexit freelance revolution has only just begun. That’s great news for the millions of freelancers already in the market and the millions more that will no doubt join them in the coming months – and a clear sign that power is shifting inexorably back to labour and ushering in an unprecedented wave of freelancer and contactor prosperity all across the UK.