Opportunity or necessity… what’s fuelling the growth in self-employment?


With unemployment reaching its lowest level since 1975, it may seem like the state of the labour market has improved in recent years. However, a closer look at the statistics suggests that this is not necessarily the case.

The strong performance in the labour market in part reflects the growth in self-employment, which has been a distinguishing feature of the labour market’s recovery since the last recession.

Growth in self-employment

There were almost 750,000 more self-employed in the UK workforce at the end of 2014 than at the start of the global financial crisis in 2008, representing a high proportion of the total net growth in jobs over this period. Self-employment accounts for over 15% of those in work in the UK – 4.8 million of a workforce of around 32 million. Between March 2008 and March 2017, self-employment accounted for almost a third of total employment growth.

The significance of the contribution of self-employment is highlighted in a recent article published in Regional Studies, which notes that of the 920,000 net new jobs created between quarter 1 of 2008 and quarter 2 of 2014, 693,000 were in self-employment.

There has also been a rise in the share of female self-employed and those that work part-time, in addition to growth in a broader range of industries and occupations among the self-employed.

Recent ONS figures also show that the growth in self-employment between 2001 and 2016 has been driven mainly by those who have a degree (or equivalent), leading to the share of the self-employed with a degree or equivalent increasing from 19.3% in 2001 to 32.6% in 2016 as a share of total self-employed. As a share of total employment (self-employed and employed), the figures show that relatively highly-qualified individuals are becoming more concentrated in the self-employed.

Earnings growth?

The reasons for this growth has been the subject of much debate, particularly as research suggests many fail to earn a decent living. This recent analysis by the New Economics Foundation found that 54% of all self-employed people are not earning a decent living. It also found that the percentage of the labour force in ‘good jobs’ had decreased from 63% in 2011 to 61% in 2016, suggesting that the quality of jobs is perhaps declining.

Similarly, the ONS figures suggest that the self-employment labour market remains financially insecure for its workers. They show that the distribution of self-employed income appears centred around £240 a week, much lower than that for employees, which is centred around £400 a week.

And, according to a recent report from CIPD, their real incomes have fallen more since 2008 than those of employees.

Perhaps, then, the self-employment growth has been driven by necessity rather than choice due to a lack of opportunity in the full-time labour market.

However, the evidence suggests it is not this simple.

Despite the widening gap in earnings between the self-employed and employed, the self-employed continue to have higher levels of job satisfaction than employees. The ONS figures also indicate that self-employed workers were more likely to supplement their income from elsewhere.

This would suggest that choice probably plays a large part in self-employment.

‘Push’ or ‘pull’ effect

There has been much discussion over whether the growth in self-employment is predominantly a result of choice or necessity.

It is often seen as a sign of labour market weakness, with self-employment perceived as a ‘last resort’ where a regular job can’t be found. The evidence suggests that this motivation accounts for just a small proportion of the change, however, with most of the rise in self-employment appearing to be out of choice rather than necessity.

Indeed, the recent analysis in the Regional Studies article, which examined the extent to which self-employment was associated with local ‘push’ or ‘pull’ effects, found little or no suggestion of any net ‘recession-push’ effect on self-employment. It suggests that:

  • ‘pull’ factors are more significant in driving transitions into self-employment;
  • self-employed business ownership appears not to function as a significant alternative to unemployment where paid employment demand is weak; and
  • entrepreneurial activity prospers where local wages are higher and unemployment lower.

The uncertainty surrounding Brexit could also be having an effect as declining employer confidence has contributed to a growing number of short-term contracts – potentially making self-employment appear the better choice.

Final thoughts

As the CIPD report highlights, there are probably more opportunities for self-employment now than there were a decade ago. And the self-employed are more likely to value highly aspects of the work, such as its variety, and choice over their working hours and pay.

Across the range of job-related characteristics, it is shown that the self-employed are as satisfied or more satisfied with their working life than employees, resulting in higher levels of overall job satisfaction – a finding that is consistent both over time and from different data sources.

In a time where work-life balance is of increasing importance, it is perhaps no surprise that self-employment is the path of choice.

If you enjoyed reading this, you may also be interested in our previous blogs on the gig economy, ‘the self-employment boom’ and ‘olderpreneurs‘.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

Working longer – the reality ‘behind the headlines’

Senior businessman in office working on laptop

By Heather Cameron

With no shortage of headlines highlighting the record employment rate in the UK, and the increasing number of older workers widely reported, it may seem that the outlook for the ageing workforce is a rosy one. But do these headlines hide the reality?

Recent analysis from Age UK argues that the headline employment rate doesn’t tell the whole story about working longer, “making it an insufficient – and even misleading – tool for public policy decision-making”.

The statistics

The most recent official figures show that the employment rate (the proportion of people aged from 16 to 64 who are in work) is the joint highest since comparable records began in 1971, at 74.8%, while the unemployment rate is the joint lowest since 1975.

Data also shows that the employment rate for people aged 65 and over has indeed increased since the 2008 recession. It is currently at 10.4%, up from 7.3% in 2008.

Age UK has also recognised the increase in employment rates for older people, noting that, in fact, the older the age group, the greater the increase in employment. However, the average number of hours worked has declined since the recession, indicating a more complex and perhaps less reassuring situation than the one portrayed in the media.

The biggest drop was for 50-54 year old men, whose average hours declined by 29%. For men aged 60-64, the average number of hours declined by 8 hours (over 22%), while women aged 50-54 experienced a fall of 18%.

The only age group not to see a decline was women aged 60-64, which is likely to be as a result of the raising of the State Pension age.

Choice or necessity?

The change in the State Pension age was justified on the grounds that it gave people more choice and more scope to continue working if they wished to.

A recent CIPD survey found that the most common reason for wanting to work past 65 is that employees believe it will help keep them mentally fit, followed by wanting to be able to earn a sufficient income to continue to do the things they enjoy.

As Age UK suggests, it may be that the reduction in working hours is a good sign if it is due to older workers choosing to wind down their hours, maybe to enable them to juggle other responsibilities such as caring for their grandchildren, while still earning a wage.

However, the research suggests it may be less through choice and more as a result of the changing labour market such as increasing underemployment (working less hours than they would choose to) or increasing insecure working practices driven by the rise in self-employment and the ‘gig economy’.

As it is likely working fewer hours will mean less income, this could be a cause for concern since it will be more difficult for older workers to maintain their standard of living until they meet the State Pension age and for them to save enough for retirement.

Another issue highlighted by the CIPD, is that most employees don’t believe their organisations are prepared to meet the needs of the over 65s, suggesting that there is a need for employers to also review their practices in terms of managing older workers.

Final thoughts

It is clear that while, for some, choosing to work beyond the traditional retirement age will be a lifestyle choice, for many it will be a necessity. Any substantial reduction in working hours for these older workers could consequently pose a real issue.

It would therefore make sense for policy makers to heed the warning from Age UK not to rely on the headline rate of employment for older workers, and rather look beyond it to the reality of many struggling to get and keep the secure, well paid jobs they want and need.

If you enjoyed reading this, you may be interested in reading our previous post on the pros and cons of the gig economy.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

Is the record high employment rate masking the reality of in-work poverty?

wage-packetBy Heather Cameron

The employment rate may have hit a record high of 74.6%, with unemployment continuing to run at an 11-year low, but in-work poverty has also reached unprecedented levels.

More than half (55%) of people in poverty are living in working households, including millions of children, according to the latest Monitoring poverty and social exclusion (MPSE) report.

And new research for the Joseph Rowntree Foundation (JRF) published last week says four million more people are living below an adequate standard of living and ‘just managing’ at best.


The findings of MPSE paint a bleak picture for a substantial share of the UK population. It notes that the proportion of the UK population living in poverty has barely changed since 2002/03, remaining at around 21%. And at 55%, those in poverty in working households has reached its highest level since the data set began in 1994/95.

Of this 55%, four fifths of the adults in these families are themselves working – a total of 3.8 million workers were living in poverty in 2014/15, an increase of around a million since 2004/05.

Female employees make up the single largest group within this group at 1.5 million, followed by male employees at 1.4 million. However, the majority of workers in in-work poverty are male (53%) as there were 620,000 male self-employed workers in poverty in 2014/15, while there were 250,000 female self-employed workers.

The story is different for workless households, however, as the proportion of people in poverty in these households has decreased, with the number in workless or retired families having fallen by half a million. Despite the significant increase in the number of people aged 65 and over, the figures show there are 400,000 fewer pensioners in poverty. There have also been reductions in the number of children in workless households.

While this is clearly encouraging, as the MPSE report suggests, it is difficult to categorise this as progress since there has been little change in the relative poverty measure overall.

Moreover, the new research from JRF warns that millions of just managing families are on the tipping point of falling into poverty as 30% of the population are living below the minimum income standard (MIS). In addition, 11 million people were found to be living far short of MIS, up from 9.1 million, who have incomes below 75% of the standard.

So what is causing these worrying statistics?

Contributory factors

The labour market has undoubtedly had some influence on these figures, with low wages and insecurity. Although average incomes have begun to rise, they are still below their peak. Male weekly earnings are still lower than 2005 levels and female weekly earnings, although now equal to 2005 levels, are still below what they were in 2010.  And with inflation expected to return, it has been suggested that hourly pay is unlikely to reach its pre-recession peak before 2020.

However, this is only part of the issue. There are also a number of other contributory factors, including:

  • increasing cost of living;
  • housing market failures; and
  • cuts in welfare benefits.

The increase in numbers living below an adequate standard of living has been driven by rising living costs while incomes stagnate. The price of a minimum ‘basket of goods’ has risen 27-30% since 2008, and average earnings by only half of this. The JRF analysis suggests the cost of living could be 10% higher by 2020, a period when much state support has been frozen.

Housing is also an important factor. It is often too expensive and of poor quality, particularly in the private rented sector. The MPSE findings show that the number of private renters in poverty has doubled over the last decade, with rent accounting for at least a third of income for more than 70% of private renters in poverty.

Households accepted as homeless and those in temporary accommodation have also increased and landlord evictions are close to a ten-year high.

Added to this, is the four-year freeze on benefits, tax credits and Universal Credit (UC), along with a reduction in the overall benefit cap. The benefit cap mainly affects households with children and will increase the number of families affected, from 20,000 to 112,000.

All this puts those on the lowest incomes at risk.

Way forward

Clearly, strong growth in the number of people in employment does not mean an end to employment-related disadvantage.

To help end poverty, the JRF has called on the government to make a number of changes, including:

  • reversing cuts to the amount people can earn before their benefits are reduced;
  • ending the freeze on working age benefits;
  • extending support to low wage sectors to reduce the productivity gap; and
  • investing in a living rents scheme to provide more affordable housing.

As the MPSE report concludes, “solutions for in-work poverty require more than just more work.”

If you enjoyed reading this, you may also like our previous articles on poverty.

Follow us on Twitter to see what developments in public and social policy are interesting our research team. 

Research Online: Scotland’s labour market hub


by Stacey Dingwall

As well as the Idox Information Service, the Knowledge Exchange Team manages two other research portals – Research Online and Evaluations Online.

This blog focuses on Research Online, which we developed over 13 years ago and have worked with Skills Development Scotland to maintain and update ever since.

Scottish labour market intelligence

Research Online is Scotland’s labour market hub. The portal provides an authoritative source of labour market research and analysis relevant to Scotland and supports evidence-based policy making in the Scottish labour market.

Before Research Online was created, research suggested that although useful labour market research and analysis was undertaken within Scotland by a large range of organisations, there was no single dissemination source.

Therefore, a requirement existed for a portal that clearly identified current labour market intelligence (LMI), provided a common understanding of current gaps and provision in areas including labour supply and skills, and focused action to ensure LMI met Scottish user needs.

Research Online was conceived to improve access to this wealth of intelligence.

The most comprehensive collection of labour market intelligence

The portal now contains thousands of documents on a range of labour market topics including:

  • Employment;
  • Skills and training;
  • Unemployment;
  • Entrepreneurship;
  • Vocational education and training;
  • Workforce development; and
  • Equal opportunities.

The material available on the portal includes research, policy, analysis, discussion and sectoral and geographic profiles. Our team sources the latest research and policy documents from a wide range of sources, including academic journals, government departments and agencies, labour market research centres and material sent in directly by key organisations in Scotland and the wider UK. The available material includes grey literature, government policy and up-to-date academic research.

Research Online also incorporates a current awareness service that alerts registered users to new material on a fortnightly basis. It also has integrated reading list functionality.

Free to access

Research Online can be accessed by anyone, free of charge. You can browse the material here without registering, as well as create reading lists to be accessed at a later date or shared with colleagues.

If you would like to sign-up for a range of current awareness alerts that keep you up to date on a variety of labour market topics, covering both Scotland and the wider UK, you can do so here.

Our shared vision is for Research Online to be recognised as a key dissemination mechanism by Scotland’s producers of labour market intelligence and to be at the centre of a community of practice for labour market researchers, practitioners and policy-makers.

You can find out more about the projects The Knowledge Exchange team has been involved in, and the consultancy services we offer, here.


Who’s afraid of the big, bad robot? Preparing the labour market for a future with AI

massive production

By Heather Cameron

Science fiction is slowly becoming science fact”. This is what the interim Chair of the government’s Science and Technology Committee said in their recently published report on robotics and artificial intelligence (AI).

While admitting there is still some way to go before we witness systems and robots like those portrayed in the creative arts such as Star Wars and Ex Machina, the report noted that there have been a series of recent advances across these fields that are beginning to have transformational impacts.

But just what will these impacts look like, particularly in relation to the labour market?

‘Transformational impacts’

Driverless cars and supercomputers that assist with medical diagnoses are highlighted as some of the transformational impacts of AI that have already arrived.  Others include improved automated voice recognition software and predictive text.

The increase in processing power, the wealth of data and the development of techniques such as ‘deep learning’ have all contributed to the recent progress.

However, the report also notes that such advances raise a number of social, ethical and legal questions that require consideration. These include issues about the transparency of AI decision-making as well as privacy and safety.

And while there is much excitement about the potential of AI to improve and enhance our lives, there is also widespread concern over the potential impact of increasing automation on the workplace.

Implications for employment

Fears over increased unemployment as a result of increasing automation are longstanding. The inquiry found conflicting views over the potential impact to the workforce, with some predicting a rise in unemployment, while others anticipate a transformation in the type of employment available.

It is likely that some occupations will become obsolete. Deloitte has warned that 11 million jobs across the UK economy are at high risk of being automated by 2036, with the retail and transport sectors most vulnerable. The research also indicated that almost 750,000 net jobs had been lost in manufacturing since the turn of the millennium, while the wholesale and retail sector saw net job losses of 338,000.

However, it was noted that millions of new roles had also been created in order to meet changing demand. So perhaps it is adaptation within the workforce that is needed.

Indeed, the Committee’s report highlights a need to focus on delivering the skills needed for people to adapt and thrive as new technology continues to emerge. It has been argued elsewhere that cognitive and social and behavioural skills should be made a priority in any skills strategy for the 21st century to “make workers more resilient to technology-driven labor market shocks like automation.”

And of course some sectors may be more susceptible than others.

Recent research by McKinsey suggests that the impact of automation differs dramatically across sectors and activities. It found that:

While automation will eliminate very few occupations entirely in the next decade, it will affect portions of almost all jobs to a greater or lesser degree, depending on the type of work they entail. Automation, now going beyond routine manufacturing activities, has the potential, as least with regard to its technical feasibility, to transform sectors such as healthcare and finance, which involve a substantial share of knowledge work.”

Another common theme highlighted throughout the inquiry was that robotics and AI could increase productivity and efficiency. One recent study estimated that ‘£1.24bn in automation investment could raise the overall value added by the manufacturing sector to the UK economy by £60.5bn over the next decade’.


There are clearly many debates about the potential impact of robots and AI, but it is not yet clear what the actual impact of advances in these fields will be on the labour market.

What is clear is that there is a need for skills to be developed for a world where AI is more prevalent.

But as the inquiry highlighted, the government doesn’t yet have a strategy for developing these new skills or responding to the social and ethical issues it poses. The report therefore recommends that “the government must commit to addressing the digital skills crisis through a Digital Strategy, published without delay.”

Perhaps the future will be similar to the past, as written evidence to the inquiry suggests:

During the industrial revolution, mechanisation did not change long-run equilibrium employment because new jobs emerged which were unimaginable at that time. Similarly, jobs lost to automation today might be replaced by jobs we cannot yet imagine.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

Gender pay gap – will it ever close?

égalité des sexes

By Heather Cameron

Last Thursday was labelled ‘Equal Pay Day’ – the last day of the year women effectively stop earning relative to men – just one day later than the previous year.

According to the Fawcett Society, this means women are in effect ‘working for free’ until the end of the year as a result of the gender pay gap.

Given that it is 46 years since the Equal Pay Act was introduced ‘to prevent discrimination, as regards terms and conditions of employment, between men and women’, it is dispiriting that considerable inequalities remain between men and women’s pay.

How much of a gap?

The Fawcett Society has calculated the current gender pay gap for full-time workers at 13.9%.

Recent research by Deloitte suggests that the gender pay gap will not close until 2069 unless action is taken to tackle it now. It shows that the hourly pay gap between men and women is closing at a rate of just 2.5 pence per annum, and in some cases is even widening.

The study also notes that men receive considerably higher average pay even in female-dominated occupations, such as teaching and caring.

And new research from New Policy Institute (NPI) found that, although things have been improving with higher employment rates and increases in earnings, the formal employment rate for women is still lower and female weekly earnings are still less than 70% of male weekly earnings.

The research also highlighted that significant barriers continue to prevent women entering the labour market, particularly when it comes to high-paid, secure, quality jobs.

The overall global situation would appear even worse as the most recent Global gender gap report from the World Economic Forum indicates that the gap could take 170 years to close.

In terms of the economic impact, the gender pay gap has been highlighted as a particular issue in relation to the UK’s low productivity problem.

It has been suggested that equalising women’s productivity could add almost £600 billion to the economy, and that 10% could be added to the size of the economy by 2030 if the millions of women who wanted to work could find suitable jobs.


The gender pay gap has been attributed to four main causes by the Fawcett Society:

  • Discrimination – often women are still paid less than men for the same job and unfair treatment remains common, especially around maternity
  • Unequal caring responsibilities – women continue to play a greater role in caring for family
  • A divided labour market – women are more likely to be in low-paid and low-skilled jobs
  • Men in the most senior roles – men continue to make up the majority of those in the highest paid and most senior roles

Deloitte’s research similarly highlights that women are disproportionately more likely to enter low paid industries or sectors.

However, it emphasises that one contributory factor to the gender pay gap occurs before labour market entry, when boys and girls decide what to study at school and in further education. Three times more boys than girls take computing and 50% more boys than girls study design and technology.

This is significant because the gap in starting salaries between men and women who have studied Science, Technology, Engineering and Mathematics (STEM) subjects, and who go on to take jobs in these sectors, was found to be far smaller.

Way forward

Deloitte’s research therefore suggests that increasing the participation of females in STEM subjects and careers could help reduce the gender pay gap.

Nevertheless, it also notes that as there are several causes, no single measure will be enough to eradicate it.

The government’s policy to introduce mandatory gender pay gap reporting for all large companies employing more than 250 employees has been welcomed as a step forward. But there are concerns this is not enough. The NPI research suggests that it could go further, with extension of the duty to companies employing 50 people.

In addition, encouraging take-up of the voluntary living wage and boosting pay in sectors that have been traditionally low paid and have predominantly employed women are suggested as ways to help speed up the reduction of the gender pay gap.

The NPI report calls for ‘a multi-dimensional policy response, sitting underneath a clear gender focused employment strategy’ to reduce gender inequalities and the subsequent pay gap.

If you enjoyed reading this, why not take a look at some of our other posts on equalities issues

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

The pros and cons of the gig economy

By Heather Cameron

The ‘gig economy’, also described as the ‘sharing economy’, ‘collaborative economy’ or ‘on-demand economy’, has grown rapidly in the UK, a trend that is predicted to continue amid post-Brexit uncertainty.

A new study from the McKinsey Global Institute suggests that work in the gig economy is even more widespread than official data suggest, with 20-30% of people in the US and UK working independently. And while the report suggests the majority of these workers are participating in the gig economy by choice, a sizable minority are there reluctantly.

So what exactly is the gig economy and what are its benefits and drawbacks?

What is the gig economy?

The gig economy comprises enterprises such as Uber, the driver hire app, Airbnb, the accommodation-sharing platform, and Deliveroo, the online food delivery company. These enterprises enable people to use digital platforms to buy services from, and sell services to, each other.

A recent PwC study identified five key sectors within the gig economy:

  • peer-to-peer accommodation
  • peer-to-peer transportation
  • on-demand household services
  • on-demand professional services
  • collaborative finance

People that work in the gig economy, as described in the McKinsey report, are independent workers, rather than employees. Three key features of these workers have been identified:

  • a high degree of autonomy
  • payment by task, assignment, or sales
  • short-term relationship between the worker and the customer


The UK has seen higher growth in the gig economy than the rest of Europe, partly due to the recent establishment of London as a global financial technology (FinTech) hub. Transactions reached £7.4bn in 2015, almost double the previous year.

The number of jobs in the online gig economy advertised by UK employers increased by 14% between May and September, according to the Online Labour Index. This is around double the 7.5% rise elsewhere in Europe, and 6% in the US.

The McKinsey research estimates that there are up to 162 million independent workers in the US and Europe combined. The number of people classified as self-employed in the UK has grown by 47% since 2000, while the number of employed has risen by just 13% over the same period.


Supporters of the gig economy argue that it enables more people to participate in the labour market by providing flexible working, provides opportunities for the unemployed and could increase productivity.

Indeed, flexible working has proven very popular among the working population as more seek to achieve the perfect work-life balance. Those surveyed for the McKinsey report who chose independent work, reported greater satisfaction with their lives than traditional workers. They were more engaged in their work, and relished the chance to be their own boss and have more control over their hours. Even those working independently out of necessity reported being happier with the flexibility and content of the work they do, although they were less satisfied with their level of income and income security.

Both consumers and organisations can benefit through greater availability and accessibility of services and improved matching that better fulfils their needs.

And there is also the benefit of minimal cost. Digital business models have lower transaction costs for consumers, and organisations can keep costs down by using independent service providers only when they need them.

Nevertheless, challenges exist.


While there are more people in work than ever before, due in large part to the increase in self-employment, and despite the high levels of satisfaction among independent workers overall, there are concerns over job insecurity and low income.

Those working in the gig economy do not enjoy the same rights and protections as employed workers, such as health benefits, overtime pay and sick leave pay.

The TUC has highlighted that the increase in self-employment has not been driven by a boom in entrepreneurship but, instead, workers are increasingly forced by employers to accept precarious employment with low pay.

Deliveroo has recently come under fire from workers over their employment practices in relation to the minimum wage. And Uber is involved in an employment tribunal where drivers have contested their status as self-employed, suggesting they should be entitled to a range of benefits such as pension contributions as well as holiday and sick pay.

In a bid to address concerns about the lack of rights held by people working in the gig economy, Theresa May has recently appointed a former adviser of Tony Blair to head a review into employment rights across the new economy.

But this will be no easy feat, as the rapid development of the gig economy poses significant challenges for policy makers and regulators to keep up.

Final thoughts

As the McKinsey report argues, “expanding economic opportunities and income security policies for this group should be a priority”. Hopefully the review of employment rights will mark the first step in the right direction.

If you enjoyed reading this, you may also be interested in our previous blog on ‘the self-employment boom.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

Careers guidance: ready for the future?


Image from Flickr user GotCredit, licensed under Creative Commons

By Stacey Dingwall

While there are many areas in which there are indications of recovery since the recession, the scale of youth unemployment is a persistent problem. According to the latest labour market figures from the Office for National Statistics (ONS), published on the 14th of October and covering the period July-August 2015, the unemployment rate for 16-24 year olds in the UK is currently 14.8%, compared to an overall unemployment rate of 5.4% for all 16-64 year olds who are eligible for work.

The youth (un)employment problem

Recent research has focused on the importance of improving the employability of young people in order to enhance their job prospects. Numerous employer surveys carried out by organisations including the Chartered Institute for Personnel Development (CIPD) and the UK Commission for Employment and Skills (UKCES) have indicated that employers are frequently unimpressed by the ‘work readiness’ of young people who apply for jobs with them. According to the UKCES, this can partly be attributed to the ‘death of the Saturday job’, and diminishing numbers of young people gaining valuable skills and experience for their future careers.

In its recent publications, Careers England has highlighted the important role of careers advice and education in tackling the youth unemployment rate. Their research highlights both the economic benefits of careers guidance, as well as those for the individual, including enhanced social capital.

Careers guidance, it is argued, “can play an important role in providing individuals with access to information and intelligence that is outside of their immediate social network, offsetting some of the disadvantages offered by inequalities in social capital”. Furthermore, it is suggested that those in receipt of careers guidance will be further aided by it as their working life continues, as it enables them to recognise the importance of networking to their career progression.

Good practice: Scotland

Over the summer, the Scottish Government announced a range of measures and initiatives to boost the employability prospects of the country’s young people. Alongside the announcement of over £5 million in funding for local government to help young people prepare for the world of work (as part of the Developing the Young Workforce youth employment strategy) came the promise of £1.5 million to support schools to provide careers advice to pupils from their first year of secondary school.

These announcements form part of the Scottish Government’s push to reduce youth employment in the country by 40% come 2021. Early indicators that this can be achieved look promising: figures released by the ONS in September covering the period May-July 2015 indicated that the youth unemployment rate in Scotland was at its lowest for this quarter since 2008, with the youth employment rate increasing by 25,000 to reach its highest level since the same period in 2005.

A particular careers guidance related programme that has been successful is My World of Work (MyWoW), an online careers service managed by Skills Development Scotland (SDS). A recent evaluation of the service by Education Scotland found that the value of the service is recognised by schools and colleges alike, with many FE support and teaching staff using it effectively and increasingly to engage learners in researching career options and exploring opportunities for further learning.

A key factor of the service is also its delivery online; as young people are used to engaging online, it is important that information is provided to them in their preferred format, as opposed to the traditional face-to-face interview with a careers advisor. Outside of the UK, countries including Finland have started to trial using social media in their delivery of career guidance.

An English ‘postcode lottery’?

In England, where responsibility for career guidance was devolved to schools in 2011, the landscape is currently a bit more fragmented. An evaluation of careers provision in schools and colleges published this year by Cascaid, a provider of careers information and guidance solutions, found that only 8% of schools/colleges have a systematic approach to integrating careers into the wider curriculum, while just over a third have a programme of activities with local universities and colleges.

English career guidance provision has also come under fire from the government: a 2013 inquiry into provision by the Commons Education Committee raised concerns over “the consistency, quality, independence and impartiality of careers guidance now being offered to young people”; and an Ofsted review following the devolution of responsibility to schools made criticisms including that provision was too “narrow” and not sufficiently coordinated so that all pupils were receiving appropriate guidance. Concerns about the inequity of career guidance have also been raised by the Sutton Trust, whose 2014 Advancing Ambitions report suggested that there was a ‘postcode lottery’ of provision in England.

The new Careers and Enterprise Company has been set up this year with £20 million of initial government funding, and it announced in September the nationwide roll-out of a network of Enterprise Advisers. These volunteers from employers will work directly with
school and college leaders to bridge the gap between the worlds of education and employment.

Future provision

Providing evidence to the Education Committee’s inquiry, the then Education Secretary Michael Gove suggested that careers advisors may not be an essential part of future careers guidance provision. Research has also indicated that pupils prefer to speak to someone they know, particularly subject teachers, with regards to their career ambitions. However, Ofsted’s review also found that the teachers in the schools they evaluated had not received sufficient training to provide information to pupils on the full range of options available to them. This is especially true of vocational education and career paths.

Considering the future of careers work in England, careers education and guidance consultant David Andrews proposes an option that could solve the problems raised above: schools employing resident careers development advisors with the responsibility of providing face-to-face guidance and working with teachers to deliver focused careers education programmes. Presumably this would include building links with local colleges and employers, something that has been identified as vital to increasing the youth employment rate, yet an area in which efforts have also been found to be lacking: per Ofsted, links between careers education and local employment opportunities in England remain “weak”.

Andrews also recommends the provision of an ‘all-age’ careers service in England. What is clear is that the careers education of the future must aspire to joined-up provision, involving clear communication between all parties. The provision of quality careers guidance is essential for not only the individual’s outcomes, but for the economy/society as a whole.


Follow us on Twitter to see what developments in public and social policy are interesting our research team.

The Idox Information Service can give you access to a wealth of further information on town centres and regeneration. To find out more on how to become a member, contact us.

Enjoy reading this? Read our other recent articles on related topics:

The self-employment boom … a challenge for government?

By Heather Cameron

There are around 4.5 million self-employed people working in the UK – 1 in 7 of the total workforce. And based on the current rate of growth, it is expected that the self-employed will outnumber public sector employees by 2020. But what impact is this shift in the labour market having on the economy and on government policy?


Earlier this year we wrote about the rise in female self-employment and entrepreneurship. And generally, jobs recovery in the UK following the recession has undoubtedly been helped by self-employment, which accounts for over a quarter of the growth in employment since 2010.

While the recession has accentuated the growth in self-employment, it is a trend that predates the downturn and it is the significant drop in the numbers leaving self-employment that has been the main driver of growth over the last five years.

Also, as people are living longer and healthier lives, many don’t want to give up working at the traditional retirement age. There has been a 46.5% increase in freelancers over 50 since 2008, an age group that now accounts for 72% of all self-employed people.

This could be seen as a positive outcome of growing entrepreneurialism, contributing to economic growth.  On the other hand, some see it as a move towards more risky, insecure work.

Why self-employment?

There is a definite attraction to being able to work for yourself and organise your own working hours. Most self-employed workers have chosen this path and there is evidence to suggest that job satisfaction is high among self-employed workers.

The freelancing model can also be beneficial to firms as it provides flexibility in access to expertise, helping them to manage peaks and troughs in demand for their services and enabling them to test new ideas with less risk.

A recent study of freelance workers found that a number of factors affect their wellbeing. When working hours are higher than their normal working pattern, freelance workers were found to be calmer and more enthusiastic. However, when the demands they face are difficult or conflicting, then anxiety increases and enthusiasm declines, potentially leading to depression.

Self-employment is therefore not without its drawbacks.


Self-employment is often associated with a lack of stability in terms of income and employment benefits such as holiday/sick pay and pensions, and difficulties in accessing financial products and housing.

A particular issue recently has been ‘bogus self-employment’ where workers who would normally meet the legal definition of an employee are registered as self-employed, therefore not receiving any of the employee benefits afforded to registered employees. The government also loses tax revenue and responsible businesses can be undercut.

Access to training is another big challenge for the self-employed as they can only treat training that improves existing skillsets as tax deductible, meaning training for new skills is not covered. As a recent report by Demos argues, this contradicts the aspiration of policy makers to promote entrepreneurial behaviour.

Worryingly, the number of self-employed people receiving training in the UK has fallen in recent years while other European countries have seen a rise. Limited access to training could become a real concern and contribute to the problem of low pay and poor progression rates for self-employed workers and across the wider labour market.

A recent report by IPPR highlights data suggesting that the earnings of the self-employed across Europe are falling relative to employee earnings, and many are looking for more hours or another job, raising concerns over living standards among this group.

As the UK is unique in its self-employment led recovery, this may be of particular concern. According to IPPR, the growth in self-employment could be driving a rise in in-work poverty alongside the jobs recovery.


With a record number of self-employed people now working in the UK, it has been argued that the government needs to better support this growing section of the workforce.

Self-employment has surpassed growth in permanent employment by 3 to 1 in the last decade, but, as Demos has recently reported, government policy has yet to catch up with this structural shift.

There have been moves towards providing support for self-employment, such as the New Enterprise Allowance (NEA), set up by the previous government, which provides people on certain benefits with support to start their own business. Figures published at the end of 2014 show that the NEA has helped to set up over 60,000 new businesses.

Nevertheless, more needs to be done to bring policy in line with the current situation.

The report by Demos makes 18 recommendations for policy to protect the flexibility that self-employment offers, while addressing power imbalances within the marketplace. These include:

  • reducing red tape for firms and the self-employed;
  • providing greater certainty over employment status;
  • creating a tailored pension scheme for the self-employed;
  • aligning the tax treatment of training for employees and the self-employed;
  • and protecting the self-employed from loss of earnings.

In July, the government launched an independent review of self-employment which will consider how those who want to work for themselves can be better supported.

Due to be published in early 2016, perhaps the outcome of this will herald a shift in policy which is in line with the shift in labour market structure.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

The Idox Information Service can give you access to a wealth of further information on labour market policy. To find out more on how to become a member, contact us.

Further reading*

Neither one thing nor the other: how reducing bogus self-employment could benefit workers, business and the Exchequer

Self-employment and ethnicity: an escape from poverty?

Policy brief on sustaining self-employment: entrepreneurial activities in Europe

Business start-ups and youth self-employment in the UK: a policy literature review

Making sense of self-employment in late career: understanding the identity of olderpreneurs, IN Work, Employment and Society, Vol 29 No 2 Apr 2015, pp250-266

Self-employment: what can we learn from recent developments?, IN Bank of England Quarterly Bulletin, Vol 55 No 1 Q1 2015, pp56-66

The changing workforce (increased self-employment and flexible working practices), IN Business Voice, Jun/Jul 2014, pp20-24

*Some items may only be available to members of the Idox Information Service

Graduating into a brighter future?

Image from Flickr user Luftphilla, licensed under Creative Commons

by Stacey Dingwall

Post-recession, the employment situation for UK graduates has not been great. Following the economic crash, headlines and statistical releases alike screamed about how bad it was out there for the recently graduated. Graduates were portrayed as either unemployed or underemployed, i.e. forced to accept roles for which their qualifications were not required or unpaid internships. With the end of the recession however, has the situation improved?

The graduate job recession

In 2010, the number of graduates in full-time work, three months post-graduation was 51% – its second-lowest level since 2003 (57%). And in 2009 The Association of Graduate Recruiters (AGR) was reporting that the number of graduate vacancies being advertised had fallen by up to a quarter since before the recession.

With record numbers of graduates now competing for each vacancy, and competing not only with their own graduating class but also with earlier cohorts, it could have been concluded that the era of the traditional graduate employment route was on its way out.

A return to form?

According to recent figures, however, things are looking up. Previewing the second 2015 update of its Graduate Recruitment survey, AGR describes the current graduate market as ‘buoyant’, and notes that the findings of the previous survey indicated an 11.9% increase in graduate vacancies on the previous year. These findings are backed up by the September 2014 edition of the Higher Education Careers Services Unit’s (HESCU’s) What do graduates do, which described the employment prospects for 2012/13 graduates as ‘dramatically improved’ compared to those of their immediate predecessors, with their unemployment rate six months after graduating down at 7.3% from the previous year’s 8.5%.

Additionally, the most recent release of the High Fliers graduate recruitment study suggests that those graduating in 2015 are doing so into the “most attractive graduate market in a decade”, and predicts 8% more vacancies than the previous year. It also notes that the class of 2015 are the first to graduate having paid tuition fees of up to £9,000 per year; this has led to the end of the image of students merely partying their way through their time at university, with the majority now focused on securing a promising career for themselves from as early as first year.

The new face of the graduate job

The prospect of graduating with tens of thousands of pounds of debt appears to be proving quite the motivation for today’s students. Rather than waiting until their final year to seek out internships and careers advice, High Fliers reports that firms are now taking on first year undergraduates in placement roles. Building up a relationship with a desired employer as early as possible is now the key way of securing a job post-graduation according to the report, with those with little or no work experience described as having “no chance” of receiving the offer of a place on a firm’s graduate programme.

AGR’s chief executive Stephen Isherwood has also pointed towards this trend, suggesting that graduate recruitment is being replaced with ‘student recruitment’, as those leaving university face competition from those still at university who have already been hired by employers for apprenticeships or have succeeded in finding an employer to sponsor them through the rest of their studies.

Another issue, as highlighted by Gerbrand Tholen, is the changing definition of what constitutes a graduate job. He notes that the previous understanding of what made a graduate occupation (those that combined expertise, strategic and managerial skills and interactive skills) has been abandoned in favour of defining the extent to which the role utilises specialist, orchestration or communication expertise.

This has led to a blurring between the lines of graduate and non-graduate roles, and also issues with compiling official statistics on the number of graduates employed in each arena. In 2014, the director of High Fliers, Martin Birchall, criticised the Office for National Statistics for not updating their definition of a graduate job since 2002, after they released data which suggested that 47% of recent graduates were not working in jobs which required a higher education qualification. This issue is further compounded by the issue of ‘over-education’ and ‘under-employment’, and the question of whether employers have been able to benefit from a more highly skilled workforce.

The graduate class problem

An important thing to keep in mind is that reporting on graduate labour market trends tends to focus primarily on the most general of findings – considering graduates as a homogenous group. This is particularly true in terms of the social backgrounds of graduates: research has found, and is continuing to find, significant differences in the labour market experience for graduates from working class backgrounds and their more socially privileged backgrounds. Until this much wider issue of a lack of social mobility within the graduate labour market can be addressed, it is perhaps too early to describe the situation as ‘buoyant’ – at least for everyone.


The Idox Information Service can give you access to a wealth of further information on education and employment trends; to find out more on how to become a member, contact us.

Further reading on the topics covered in this blog *

‘Graduate jobs’ in OECD countries: development and analysis of a modern skills-based indicator (LLAKES research paper 53)

What do graduates do? Employment review, IN Graduate Market Trends, Autumn 2014, pp12-14

Graduates’ experiences of non-graduate jobs: stop gaps, stepping stones, or dead ends?, IN Graduate Market Trends, Summer 2014, pp6-8

‘You have to be well spoken: students’ views on employability within the graduate labour market, IN Journal of Education and Work, Vol 27 No 2 Apr 2014, pp179-198

The gap between the proportion of young graduates from professional backgrounds who go on to a “graduate job” six months after graduating and young graduates from non-professional background

We need to talk about graduates: the changing nature of the UK graduate labour market

*Some resources may only be available to members of the Idox Information Service