Why has there been a surge of self-employed IT professionals?

The number of IT contractors has gone up 55 per cent since 2010. Here's the explanation for it

The number of IT professionals working as contractors has increased at nearly twice the rate as the growth in the number of IT sector employees over the past six years, according to data obtained by SJD Accountancy.

The data shows that the number of IT contractors jumped from 76,972 in 2010 to 119,617 in 2016, a rise of 55.4 per cent. At the same time, the number of employees in the IT sector increased by 29.5 per cent, from 509,000 to 659,000.

The number of self-employed people in the IT sector has also increased at more than twice the rate of the whole economy. The number of self-employed workers in all sectors increased by 20.7 per cent since 2010, from 3,869,708 to 4,672,472.

According to SJD Accountancy, the growth in self-employment in the IT sector has been driven disproportionately by women, as 13.9 per cent of IT contractors are now female, compared with 9.3 per cent in 2010.

"The increase in the proportion of the IT workforce operating as contractors has been driven by demand from both IT professionals and organisations utilising IT skills," said Derek Kelly, CEO of SJD Accountancy.

"Contracting was traditionally seen as the riskier option but the erosion of employment rights since the financial crisis have changed that perception."

Kelly said freelancing is increasingly both a career and a lifestyle choice.

"In high-demand areas such as IT, contractors are often at no greater risk of being out of work than employees, and the higher take-home pay is usually sufficient to cover any gaps between contracts," he said.

"Hiring permanent staff involves a higher level of commitment and is something organisations are more likely to do when there is more certainty over future demand.

"Economic uncertainty, which has been compounded by Brexit, has persuaded many organisations to defer hiring and look to contractors to plug skills gaps."

According to National Statistics, which supplied the data, a person is self-employed if they run their business for themselves and take responsibility for its success or failure. Self-employment can be in the form of a sole trader, a partnership with two or more people who run a business, and an owner of a limited liability company who is also responsible for running the business.