New report reveals the significant value of freelance construction workers

New report reveals the significant value of freelance construction workers

27th February 2018 | Hudson Contract

Freelancers play a crucial and unrivalled role in boosting economic efficiency and productivity in the construction sector, a new report by the Centre for Research on Self-Employment (CRSE) and Hudson Contract has confirmed.

Utilising flexible and highly-skilled freelance sub-contractors, rather than employees on a project by project basis avoids idle unused labour downtime in the range of a 27-86% labour cost saving per project.

The ‘pay per project or task’ variable cost model they provide, enables greater de-risking of construction ventures, therefore limiting the downside risk, enhancing return on investment and boosting total industry output.

The report also debunks the myth that freelancers are the most vulnerable, low-paid construction workers. On the contrary, employees are the lowest paid workers among both full and part-time workers. 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.

Professor Andrew Burke, CRSE chair, commented: “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 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.”

The Executive Summary can be viewed here