Tax & admin · 30 August 2017

Freelance wages rise six times faster than regular employees

Urban man photographer with leather bag in the city. Close-up hands
By the end of 2015, freelancers were earning 36 per cent more per hour than the national average

Between 2010 and 2015, Britain’s independent professionals experienced wage growth at six time the rate of full-time employees, according to new analysis of labour market data.

The study, undertaken by freelance marketplace PeoplePerHour with researchers from University of Westminster Business School, showed that the average hourly rate charged by freelancers on the platform in the five-year period increased by 26.83 per cent – moving from £16.34 to £20.73 per hour by 2015.

To put that wage growth in perspective, the study looked at freelance wages against data taken from the Annual Survey of Hours and Earnings (ASHE). For workers in regular employment, wages rose by just 4.52 per cent in the five years to 2015 – meaning slow growth from £14.60 to just £15.26.

By the end of 2015, freelancers were earning an average £5.47 per hour more than the national average for employees, or 36 per cent.

Commenting on the significant wage growth enjoyed by freelancers, Xenios Thrasyvoulou, founder and CEO of PeoplePerHour. attributed the widening gap to two central factors – the quality of work delivered alongside greater demand from businesses for experienced professionals on a short-term basis.

“With more highly-skilled professionals seeking equilibrium in their work-life balance, many are turning to self-employment as a way to both command higher hourly rates and to have the autonomy they crave,” Thrasyvoulou said.

“Equally, as companies switch on to the many benefits of the freelance workforce, freelancers are able to pick and choose their clients and negotiate their hourly rate they are worth, and in turn, businesses are willing to pay more for the skills, expertise and flexibility such a workforce brings.”

Working for free

Despite the strong figures produced by PeoplePerHour, previous research has highlighted trends within freelance industries of unpaid work. In 2016, 70 per cent of freelancers were asked to work for free, according to one study.

Freelance photographers received the most requests, with 87 per cent asked to work for free. Some 16 per cent throughout the UK agreed.

The figures were released by Approve.io as part of wider research into workplace exploitation. A common tactic employed by larger brands on social media to get freelancers working for nothing, the company claimed, was the promise of industry exposure.

“There’s a difference between helping out a mate or offering your time for free to a good cause or charity and being exploited by a businesses that could – and should – be offering to pay for your talent,” said Charlotte Whelan, a project manager at Approve.io

“You wouldn’t walk into a hairdressers and ask for a free haircut on the promise that you’ll tell all your mates where you got your hair done.”

In a recent article for Business Advice, Jason Kitcat, micro business ambassador for Crunch Accounting, advised freelancers to think of alternative ways to compensate for working for free.

“If your new client genuinely doesn’t have the funds to pay you, try and figure out another way that you can have a mutually beneficial relationship with them. Does the client offer any services or products that could help your business grow and get off the ground?

“Instead of working for free, find out if you can trade your skills for something they have that could bring value to your company.”

Read advice from our expert on setting your rates as a freelance professional

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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