The British Gig Economy: do contractors earn more?
'Uberisation', 'on demand economy' and 'gig economy'... New words that constantly pop up in an attempt to describe this new kind of economy in which individuals get paid by customers rather than employers. This growing trend implies social and economic questions being raised such as: who are contractors and do they really earn more than employees?
In this study and to answer these questions, we have analysed salary data from nearly 700 contractors working in the UK to find that being a contractor is financially attractive, but it may not be the full picture. After all, it's not always about the best paying jobs.
What does a typical contractor look like?
|Years of experience||12|
|Years spent contracting||4|
|Most common degree||Bachelor of Science|
|% of Women||25%|
Contracting requires experience
Most contractors have worked full time before going freelance, with on average 12 years' experience during which they would have built up credibility and a client network to leverage as a contractor.
An established format
On average, contractors have been working as a freelancer for four years, a sign that the 'Gig Economy' also includes old timers, even if its popularity as a professional format seems to have dramatically increased lately and gained visibility.
How much do contractors earn?
|Activity||Contractor daily rate||Full time employee daily rate||Pay difference|
Salary figures for professionals with 5 to 9 years' experience. All salaries come from Emolument.com.
In most jobs, your daily rate will be higher if you work as a contractor rather than as a full-time employee (as much as 49% higher for software developers).
How much is the extra stress worth?
Lack of job security, no holiday/sickness pay, constant need to pitch and yield new business in order to consolidate a pipeline and even extra paperwork - all these factors have a embedded cost to the contractor.
One size doesn't fit all
Software development and marketing are ideal sectors for contractors, with substantial financial upsides (freelance marketing professionals earn 38% more than those working full time); teachers however only earn 9% more than contractors with fantastic job security which is one of the main benefits of the job.
Banking contractors: Earn as much as a banker without working like one?
Banking is the only job in which contractors earn less on average than those working full time (34% less), which can be explained by the lack of high value access to contractors due to a heavily regulated system. However, the contractor's average working day/week is likely to be far less filled than the average banker's.
Is this your sort of gig?
Beyond matters of earnings, a societal shift is taking place in favour of the gig economy with a ripple effect far beyond the traditional contractor community which was originally centred around IT and marketing jobs. Being a freelancer has become a lifestyle young professionals aspire to emulate.
It better reflects their desire to a modular career path, compiling a 'book' of experiences along their professional journey better tailored to their personal development, work-life balance as well as evolving job descriptions and requirements. It seems being affiliated to a company brand and its culture is not as attractive as it once was.
Emolument provides bonus and salary statistics based on data submitted directly by professionals like you. It is free, anonymous, and already a trusted tool for thousands of professionals worldwide. Are you paid enough? Click here to find out now.