Will Independent Professionals pack more punch than Contractors?
Posted by John Yerou
on September 21st, 2014 19:20pm in
Last Updated on January 6th, 2019 17:37pm.
It must have been a tough choice for PCG. They’ve built their brand by giving contractors a voice where before echoed only silence. To rebrand as IPSE is not only a ballsy decision, but also shows that businesses of any size can shift in line with market trends.
But what if we peep behind their decision to clock out the term ‘contractors’ in their moniker one last time? Why become an association that represents Independent Professionals and the Self-Employed, instead?
Did you see PCG’s brand change a-comin’?
If you’re anything like me, the first inkling that PCG was rebranding was in the e-mail announcing said change. That was on the first of September, 2014.
But there’s a reason why business like mine employ marketing departments. Here’s a perfect case in point.
If you’d read the tealeaves, you may have foreseen PCG’s imminent change as early as Spring this year. Whom do we have to thank for our Gypsy Rose Lee moment? Social media. Facebook, to be exact.
Back in March, our marketing department brought this little nugget to our attention:
“Can we swap the word contractor for independent professional? Facebook is prompting us to use that as a hashtag to extend our reach.”
Our copywriter was agog. I was less than enamoured. But, heck. Have you ever tried challenging your marketing team when they’ve got a bee in their bonnets? Well then; you know what I mean ;).
Despite our protestations and reservations, we went on to deploy the term on site and in our social.
Moreover, it got us thinking about the topic at a deeper level. In May, we published: What are the differences between freelancers and contractors?
As we alluded then,
“We tend to cover all self-employed with the freelance brush. That’s despite the sector covering a wide variety of independent professionals.”
But, and it’s a big but, there may well be a down side in PCG’s rebranding plan. It does involve marketing (they won’t drop it) and it’s not (only) that the new name’s a right old mouthful.
Can you tell what it is yet? Let’s hear PCG IPSE’s reasons for making the change, before we cast the first stone.
Just how big is the UK’s self-employed market?
In IPSE’s e-mail, they informed us that the organisation had grown to a 22,000-strong membership. That’s a sizeable number, by any stretch.
However, when you compare that to the amount of people the ONS class as self-employed in the UK, it’s tiny. According to the ONS in August, 356,000 people work as self-employed in their second job alone.
Twice this year, the rolling quarterly figure for self-employed people has hit 15% of the total UK workforce.
Those rolling three-month periods were January-March and, more recently, April-June. The ONS depicts that latter quarter in an at-a-glance view in the infographic, below.
Infographic by Office for National Statistics (ONS)
In real terms, that’s almost 4.6 million people in Britain classed as self-employed at the end of August 2014. To those of us watching the market, it’s no surprise.
The self-employed sector has fuelled the rise in total employment since the turn of the century.
In itself, there are nigh on 40% more people working for themselves today than in 2000. Moreover, that rise accounts for three quarters of the total increment in employment in those 14 years.
Now we get an insight into what’s prompted the organisation’s rebranding. But there are three questions I’d ask:
- Does IPSE anticipate that the market for UK contractors has peaked?
- Is the terminology ‘contractor’ too specific or misleading?
- Or, with the self-employed figure set to continue rising, is the temptation of a piece of an even bigger pie too much of a draw?
The premise – will IPSE remain true to freelancers and contractors?
The IPSE email confirmed that its existing membership will remain the core focus of its activity. For the 22,000 freelancers and contractors who’ve helped put PCG on the map:
…you can’t help but think that future capture rate of the masses may yet shape IPSE’s long-term destiny.
What if hordes of independent professionals join the ranks, as anticipated?
Would a contractor-centric focus remain workable for millions of permanent self-employed?
It’s a valid question, given the breakdown of the demographic that makes up the UK’s self-employed. At least according to the ONS, based on the ‘key points’ of their latest figures.
ONS Key Points – just who isn’t the 5 O’clock hero?
Okay, so we’ve covered the first talking points:
- self-employment is higher than at any time since records began four decades ago;
- for the last six years, those quitting the 9-5 have dominated the rise in the number of the UK’s self-employed;
- if 22,000 members isn’t already ‘burgeoning’ – and if IPSE nails its marketing – its number soon will be.
But let’s look at the ONS’s other main findings that may have helped sway PCG’s rebranding decision.
We’ve taken the screenshots from hereon in from that document and use them as per the Open Government Licence.
Small businesses folding – in decline
In the past, a sizeable proportion of those who’ve tried self-employment have fled back to the office. Being your own boss ain’t for everyone, but you don’t know if you don’t try, right?
A predominate factor in today’s record number of self-employed is that fewer are quitting.
Have successive governments’ attempts to make running a small business easier begun to kick in? It seems so. No doubt groups like PCG ‘s support of professional contractors has added momentum to this swing.
Age – no longer a barrier
The number of pensioners registered as self-employed has had a marked effect, too. In the last five years alone, more than twice as many twirlies are clocking on, albeit for themselves.
Is this a consequence of pensions not performing? Or people living healthier longer? Or has the UK populace accepted that 65 is no longer a barrier to providing a service?
There are a couple of facts that may help us narrow the answers down:
- Those in direct employment tend to be younger than those working for themselves;
- Hours worked by the self-employed tend not to conform to the 36-hour week. They’re either fewer than eight or in excess of 45 hours a week.
This insight may suggest that some are topping up their pension. Or, that those closer to 65 are drawing upon their years of service to make retirement more comfortable when it arrives.
Whatever the reason, it’s hard to imagine pensioners working in Oil and Gas, Construction or IT.
Whilst we’re on the subject, but not wanting to sound sexist, oil rigs and building sites are still male dominated. Whilst there’s still many more men working for themselves overall, the number of women doing so is rising faster.
The point? Put these facts together and you have a market sector as far removed from freelancing and contracting as one could imagine.
Is dropping ‘contractor’ dropping the ball?
Has PCG shot itself in the foot dropping the term ‘contractor’ from its name? Construction, joinery and carpentry remain amongst the most common self-employed roles.
As far as independent contractors go, it’s hard to imagine a more apt sector. So, what mixed message is “We’ve dropped the term ‘contractor’ from our name” giving there?
The other named trade represented in depth is taxi drivers. It’s a huge sector, that we assume IPSE will welcome. But will it be a good (or discoverable) fit, given the terminology Independent Professional?
Above all else, contractors know that they are contractors. As we allude in our freelancer v contractor article referenced earlier, each has its own space in the market. After years creating an identity, how will they feel about the new generic association?
What’s the market rate for freelancers?
Okay – I used freelancers in the above sub-heading because it’s a familiar and much debated topic. But we could ask the same question of any profession or service provided by an individual.
And while the main point of the article relates to market rates only as a second cousin, it’s still worth a mention.
Since self-employment began to overtake permanent roles in the underlying jobs trend, consider this. The average recorded income for self-employed people has dropped by more than a fifth (22%).
Is this plummet due to:
- lower overheads of self-employed people reducing overall service costs?
- more competition forcing market prices down?
- those new to a business sector ignorant of the market rate for related products/services?
As we mentioned earlier, fewer people quitting supports the recent record growth. Let’s hope the penny has dropped and this worrying trend has peaked.
From the tone of their announcement, IPSE is looking to make an immediate impact. Wouldn’t finding out why income has nosedived to such a degree be a great place to start?
Nevertheless, the points outlined herein give us an insight into the world PCG is entering as IPSE. To address them and take them with a “louder, stronger voice” to Whitehall is a lofty goal. To carry that flag into Europe as the third biggest group of its kind in the EU? Even bigger.
What PCG has done to establish an ipseity for freelancers and contractors is beyond repute. Let’s hope IPSE’s new recruits, the Independent Professionals, don’t erase that identity…
Author: John Yerou
John Yerou is a pioneer of contractor mortgages and owner and founder of Freelancer Financials, Contractor Mortgages®, C&F Mortgages and Self Employed Mortgages, trading styles and brands of the award-winning Mortgage Quest Ltd.
Freelancer Financials Blogs
Request a Callback
Latest Blog Entries
- Ltd Co contractor optimum salary vs dividend split 2019/20
- The Smart Way for First-Time Buyers to Save on Stamp Duty
- How does a BoE base rate rise affect my mortgage repayments?
Finding a Financial Advisor who’s professional and knowledgeable is a bonus but one that you trust and feel comfortable with immediately is rarer still. I have recommended John to virtually all the other IT Contractors that I work with and will continue to use their services in the future.
Jakub Baluch.. IT Contractor
John Yerou and his team provided the brokerage service for my last 3 mortgages and I cannot rate them highly enough. No matter how large or small the request they always provide a speedy and professional response. I would never consider using another advisor/broker.
Roz Clifford.. Freelancer
We have been introducing Contractors and Freelancers to Freelancer Financials for several years now. They have established themselves as the preferred choice of financial advisors to all our IT contractors and Freelancers.
Bernie Potton.. SQ Computer Personnel (largest independent IT Recruitment Agency in the UK)
Andrew Saunders and Leanie Freed have provided an impressive service - one month from initial enquiry to completion of house purchase, with a mortgage from an established high street lender on a good interest rate. The service was clear, responsive and professionally managed throughout. Most importantly, Andrew understands the business context for contractors and this directly informs their approach to lenders
Bill Robinson.. Contractor (Management Consultant)