Using freelancers over employees slashes idle labour and saves costs, a new report from the Centre for Research on Self-Employment (CRSE) and Hudson Contract claims.
Using freelance sub-contractors on a project-by-project basis can result in a labour cost saving of between 27-86%, the report said.
According to the report, the ‘pay per project or task’ cost model can enhance return on investment and boosts total industry output.
The report aimed to debunk a widely-held belief that freelancers are the most vulnerable, low-paid construction workers.
Employees are the lowest paid workers among both full and part-time workers, the report claimed. This is specifically so within part-time workers, where freelancers typically earn more throughout every percentile from the lowest to highest paid workers.
The higher earnings enjoyed by freelancers are in many ways a natural consequence of the additional value they add by supplying highly specialised skills, on a flexible basis, the report claimed.
Professor Andrew Burke, CRSE chair, said, “This report set out to provide an economic analysis of the impact of freelance workers in the performance of the construction industry. The evidence is undeniable: freelancers play a crucial enterprise-enabling role in boosting economic performance in the construction industry.
“Their unique and invaluable contribution needs to be recognised and valued. Only once we understand and appreciate the value of freelancers in this industry can we foster appropriate policy approaches that aren’t aimed at eliminating this vital cohort.
“The absence of the freelance sector of the workforce would have highly negative economic consequences; causing economic contraction, higher costs, reduced employment plus a more highly concentrated and less competitive market.
“The construction industry is enabled and underpinned by the availability of freelancers serving a unique economic function and the future strength of the industry is dependent on them.”
David Jackson, Hudson Contract chair and founder, added, “This report reaffirms what we have known for a long time: the construction sector is driven by freelancers, and far from being exploited, those freelancers are well rewarded for their efforts.
“If we want the UK’s construction industry to be one of the most competitive, flexible and productive in the world we must help not hinder these freelance workers. That starts with debunking the myth that freelancers in the construction industry are exploited.
“Housebuilding is a significant issue for the UK government at present and if they are to deliver on any of their promises, freelancers must be at the heart of their strategy.”