Return to business confidence among freelancers, survey shows

Nick Elvin

Freelancers’ confidence in both business and the economy has been restored after dips in the previous quarter, new research has revealed.

The survey of nearly 1,000 UK freelancers consisting of members of IPSE, the Association of Independent Professionals and the Self Employed, and registered freelancers on online work platform Elance-oDesk, found a net positive outlook on business prospects – perhaps because of an increase in volume of work and day rates.

The survey results, published in IPSE’s Freelancer Confidence Index, also found an increasing confidence in the UK economy, reversing the trend over the last three quarters.

Suneeta Johal, head of research, education and training at IPSE, said: “The survey shows a welcome return of business confidence both in freelancers’ businesses and in the economy.

“This optimism is accompanied by an increase in both net earnings and day rates. Over the last 12 months day rates have risen 5.6%, which along with an increase in the number of days worked, has contributed greatly to freelancer earnings outperforming that of employees and the increasing business confidence seen in the report.”

Key findings from the freelancer confidence index include:

• IPSE members’ average quarterly earnings have reached £30,000, which is roughly 20% more than employees earn in a year;

• Day rates have experienced a 1% growth since the last quarter, rising from £525 in Q4 of 2014 to £531 in Q1 of 2015. The majority of freelancers (56%) expect day rates to stay at current levels, while 27% expect them to increase and 17% anticipate a fall;

• Capacity utilisation of freelancers has reached record levels, with 87% of freelancers under contract at the time of survey;

• More freelancers are reporting an increase in the volume of work undertaken over the last three months (38%) than those reporting a fall (20%);

• Business confidence for the coming three months has risen from 3.95 to 9.42 while the 12-month outlook index rose from 0.6 to 7.19;

• The three-month confidence index for the UK economy rose from 5.7 to 16.48 from the last quarter, its second highest level over the last year, while the 12-month outlook rose from 4.75 to 18.05.

In addition to the survey of IPSE members, Elance-oDesk also gathered the views of a broad range of its registered freelancers. Although the average day rate of Elance-oDesk respondents decreased from £220 in Q4 of 2014 to £173 in Q1 of 2015, almost half expect this to increase in the next 12 months (8.4% anticipated a drop, and 44.1% expect rates to remain the same). On top of this, 60.6% expect their business revenue to increase in the next 12 months, up by 7.4%.

More Elance-oDesk respondents reported an increase in the volume of work undertaken over the last three months (33.3%) than those reporting a fall (15.7%).

Hayley Conick, UK country manager for Elance-oDesk said: “Business confidence is clearly on the up. Over 60% of freelancers who have worked for their clients via Elance-oDesk expect their revenues to increase in the next 12 months. With a third of freelancers experiencing a growth in work volume over the last three months, the general outlook is very positive indeed.”