Ireland’s Project Economy 2022 report assessed the working lives of high-skilled contract professionals.
Ireland’s Project Economy 2022, an annual report by Trinity Business School and Contracting PLUS, has revealed that professional contractors earn more than one and a half times the earnings of equivalent employees.
The report provides a statistical insight into work, life, business performance and the economy relating to high-skilled independent contractors.
“There has never been a better time to be a self-employed professional”
“The project economy is a major driver of economic growth utilising a blended workforce of both employees and independent contractors to enable organisations of all sizes to be more innovative, agile and grow faster than they could if constrained to an ‘employee-only’ workforce model,” said Professor Andrew Burke, Dean & Chair of Business Studies, Trinity Business School.
“The dual talent and financial advantage of engaging freelancers to work with employees to cover the more complex challenges of innovating, adopting new technologies as well as managing the cost and risks associated with business growth and unexpected events, are defining drivers of the project economy. These performance benefits extend across organisations of all sizes and encapsulate both for and not-for profits entities.”
Frills for freelancers
It found that high-skilled independent contractors earn more than equivalent employees and those working in the project economy earn 73% more than similar occupation employees. Female independent contractors achieve and average of €519 per day and male contractors secure an average of €579 per day.
High-skilled independent contractors working in the gig economy earn an average of 56% more than equivalent occupation employees.
There is no evidence of age discrimination in the report. The greater experience of older workers is reflected in higher day rates being secured as workers get older. These independent contractors have higher income and are able to command the highest levels of earnings in their 60s.
The report also found that there is greater equality of pay between men and women in the High-skilledindependent contractor workforce than amongst employees. The average annual earnings gender pay gap is 15% within the professional contractor workforce, compared to the 25%gender pay gap in the employed sector.
Business prospects for contractors
The survey also reveals that independent contractors are upbeat about business prospects for the medium term with positive freelance sector and Irish economy confidence indices scores. A total of 73% of contractors expect their sector to perform better over the next 3-5 years than currently. Just 6% expect it to perform less well. In terms of the Irish economy, 76% of independent contractors expect it to perform better in 2022 than 2021. Just 7% expect it to perform worse.
High-skilled independent contractors tend to be happier than employees. They manifest higher levels of work and life satisfaction levels than equivalent employees. A total of 76% of contractors voluntarily chose this form of work.
“There has never been a better time to be a self-employed professional,” said Jimmy Sheehan, managing director of Contracting PLUS. “This isn’t my opinion, rather the overwhelming result from this year’s survey. However, the elephant in the room remains the regulations around the use of and hiring of self-employed independent professionals.
“When the effects of Covid 19 are stripped out of this years research, the largest negative factor affecting Ireland’s Project Economy is Government regulation around the hiring of Independent professionals. The issue is the interpretation of the regulations due to mixed messaging from different Government departments.”
He added: “For now though, let’s celebrate the confident outlook for contracting in Ireland and all the positive aspects that have come out of this research including a smaller gender pay-gap than the national average, the ability for those over 60 to keep working at a time in their life when they are often less valued and the fact that a whopping 86% are satisfied with the success they have achieved in their career.”
The report showcased that this segment of the workforce allows the project economy to generate value added to business and society. These attributes also entail reduced gender discrimination and clear evidence of valuing the greater work experience of older people. Given these positive characteristics, this segment of the self-employed workforce and economic activity ought to be nurtured and recognised because of its distinctiveness.
The research is based on an anonymous survey of contractors, recruiters and clients and received 1,020 responses. A detailed analysis of the data was then carried out to identify a general profile, nature of work, experience with contract work and expectations about the future of business and economic performance.
Dr. Na Fu Associate Professor of Human Resource Management at Trinity Business School said: “Home working due to the Covid pandemic has brought remote and freelance working more into the public consciousness. However, these forms of work in the project economy have in fact been active and growing over the last two decades and are an area of great interest to researchers in universities.
“However, while it is a good news story, it is still a form of self-employment, which is fundamentally a riskier career than employment. So, it’s not suitable for people who are highly risk-averse nor is entry into this form of self-employment a guarantee to achieve the average incomes unearthed by our research,” Dr Fu added.