Dividing the UK’s self-employed workforce into nine distinct segments could help steer politicians and civil servants away from “broad-brush, harmful” policies, new research suggests.

The report, produced by the Centre for Research on Self-Employment (CRSE), says the self-employed workforce is more diverse than policymakers and the media seem to realise.

It states:

For years now, the self-employed sector has been overshadowed by a myth. Looking for simple stories, the media have portrayed this diverse and complex sector as all the same – a homogeneous mass.

Instead of this one-size-fits-all approach, the research suggests a framework for segmenting different types of self-employment, looking at ‘key indicators’ including economic wellbeing, levels of independence and the degree of security offered by the work being done.

Is segmentation the key to better policy?

The nine different categories of self-employed worker identified by the researchers are:

1. Low pay, dependent, insecure
2. Low pay, independent, insecure
3. Low pay, independent, secure
4. Mid pay, dependent, insecure
5. Mid pay, dependent, secure
6. Mid pay, independent, secure
7. High pay, regulated, secure
8. High pay, mid-independence, secure
9. High pay, independent, secure

Significantly, the majority (53%) of the self-employed workforce were found to exhibit high levels of independence and security.

This goes against the narrative, which has gained traction in recent months amid negative publicity relating to the so-called gig economy, that all self-employed workers are unhappy with their lot and / or vulnerable to exploitation.

Recognise the diversity of the self-employed workforce

The report calls for policies that recognise the varied needs of the self-employed sector’s “many constituent segments.” It makes several policy recommendations, including …

‘Secure the freedom of the self-employed’

The report says that:

Policymakers must recognise that while it is important to improve the position of dependent and insecure workers, it is also essential that any policies introduced do not put at risk the independence, autonomy and job satisfaction enjoyed by the legitimately self-employed.

One way to do this, it is claimed, would be to improve access to training and professional development opportunities – ensuring that self-employment “remains a positive career choice, with room for growth and progression.”

‘Clear the status confusion’

The report authors believe a statutory definition of self-employment would give the genuinely self-employed “the legitimacy they deserve” and help to ensure they maintain their independence.

‘Support the insecure’

Insecure self-employed workers are said to be in urgent need of support through incentives for pension uptake and reforms to the welfare system:

A review of the pension system, and exploring the possibility of introducing more flexible pension solutions for the self-employed, may be one way of encouraging uptake and improving the position of these segments.

Other options outlined in the report include reforming parental benefits to boost security for independent professionals, as well as reviewing Universal Credit to account for volatile and fluctuating incomes.

‘Improve the quality of work through training’

It is argued that the government should look into the tax treatment of training for the self-employed and explore ways to collate online training information, making it more accessible.

Why a blanket approach doesn’t work

The report concludes that:

The self-employed workforce is not a homogeneous group. On the contrary, our research has shown that it is made up of numerous, diverse segments, and policymakers should recognise that a one-size-fits-all approach will not effectively serve the self-employed.

Entitled The True Diversity of Self-Employment: Uncovering the Different Segments of the UK’s Self-employed Workforce, the research was produced by the CRSE in conjunction with the Institute for Employment Studies (ISE).

It can be downloaded via the CSRE website.