Tag: Interim

Reasons to say No to more work

Another thought-provoking list from Nicholas Bate.

When you’re a sovereign professional, or run a small business, it often feels like a crazy, reckless sin to turn down work.

Nicholas tells us why we should…

  1. Most great things (time, energy, attention) are finite. Another yes will destroy their power.
  2. And the few astonishing things (the night sky, true love, appreciation for Chopin) which are infinite, require a no to appreciate them fully.
  3. There is not a single reason why you should take on the consequences of their poor planning and ruin your evening.
  4. Babies are not small and cute for very long at all.
  5. To respect yourself.
  6. To have time to go to the gym.
  7. To-paradoxically-build your value because of the focus and quality of your work.

Read the full 22 here and mull over Christmas.

 

Photo by Enrico Carcasci on Unsplash

How much do sovereign professionals earn?

Understanding the earnings of sovereign professionals (in the UK) is more difficult than it might first appear. This report from the Office of National Statistics (Trends in self-employment in the UK) makes a good stab and much of the data below comes from that report. However, it is necessarily flawed and, I would argue, most likely understated, especially for full-time self-employed.

How to define self-employed

The problem lies in legal status and the way that income is taxed. In the UK, if you are a sole trader, then you trade on your own account. You bill your services as, say, John Smith, Plumber. That income less your business expenses is subject to income tax (ignoring national insurance, another form of employment tax, for simplicity).

However, there is another option. you can incorporate a limited company and trade through that. The limited company has its own legal identity and the profits it makes belong to it (and its shareholders). You can then take your share of profits as a dividend on the shares you own and/or the company can hire you as an employee and pay you a salary. Both dividend and salary are subject to taxes, but the rules are different and the net effect can be different, too. It’s often more tax-efficient to use a limited company structure (though less so than it used to be).

There are other reasons, too. Many people like the clear separation between business and personal. Being Director / Managing Director / CEO of ABC Ltd. can appear more senior and lend gravitas to a business card. It can also signal, perhaps, greater seriousness or commitment to the business. These things  can be illusory, but effective. Perversely, a limited company (by definition, limited in its liability) can find it easier to obtain business loans than a sole trader (who is liable to the full extent of their personal worth).

In the business-to-business (B2B) market (e.g. independent consultants, designers, interim managers etc.) and especially at the more expensive or senior end, the limited company model is (I would suggest)  much more common than the sole trader. And, in any survey, the sole employee-director of a limited company will necessarily respond that he or she is most definitely NOT “self-employed”.

About the self-employed

All of that said, the ONS report throws up some interesting data.

Population

There are now 4.8 million self-employed people in the UK, 15.1% of the labour force and up from 3.3 million (12.0%) in 2001. And, more of those self-employed people are solo workers: 4.0 million in 2016, compared to 2.4 million in 2001.

Income

Median income for full-time self-employed in the financial year ending March 2016 was £347 per week (£18,044 pa).

Median incomes for the self-employed have not increased as much as those of employees or general inflation:

  • Increase for full-time male self-employed (2000-01 to 2015-16) = 22.8%
  • Increase for full-time male employee (2000-01 to 2015-16) = 44.8%
  • Increase for full-time female self-employed (2000-01 to 2015-16) = 22.9%
  • Increase for full-time female employee (2000-01 to 2015-16) = 52.8%
  • Cumulative inflation over the period = 51.8%

Education

Interestingly, the share of self-employed with degree-level (or higher) education has grown from just 19.3% in 2001 to nearly one third (32.6%) in 2016.

Degree-educated, self-employed people now make up 4.9% of the total (employed plus self-employed) labour force compared with just 2.3% in 2001. As the ONS report says:

Growth in self-employment has been driven mainly by those who have a degree (or equivalent), increasing its share amongst both the self-employed and total employment, showing that relatively highly-qualified individuals are becoming more concentrated in self-employment.

Wealth

In terms of property wealth, for the 35-54 year-old age bracket, 27.0% of self-employed have property worth over £250,000, compared to just 17.6% of employees.

For the over 55 age-group, the difference is even more marked: 56.2% of self-employed compared to just 37.5% of employees.

By contrast, the self-employed typically have much smaller pension pots.

Aged 35-54, just 14.0% of self-employed have a pension pot of £100,000 or more compared to 34.2% of employees. And, 45.1% have no pension provision (other than state pension) compared to just 16.4% of employees.

In the older age group, 34.8% of self-employed have a pot of £100,000 or more compared to 56.4% of employees. Nearly a third (30.3%) of 55+ years have zero pension provision compared to 14.2% of employees.

In terms of cash, the figures are neck and neck except for the two extremes of the 55+ age group, where the self-employed generally have greater cash wealth. There are fewer self-employed with less than £20,000 in cash assets (51.9% compared to 59.4% of employees) and more self-employed with greater than £100,000 in cash(19.4% compared to 12.2% of employees).

What about those limited companies?

Elsewhere, ONS data hints at possible growth in sovereign professionals operating through their own companies.

Between 2010 and 2017…

  • The number of micro-businesses (0-9 employees) has grown by 28.2%
  • The number of employees in those businesses has grown by only 18.9%, meaning the average 0-9 employee business is smaller.
  • In fact, the average employees per business has dropped from 2.5 in 2010 to 2.3 in 2017.
  • At the same time, the average revenue per employee has increased from £127.7k to £144.2k. Total revenue has increased by 34.2%.
  • By contrast, in the next band of 10-49 employees, number of businesses and number of employees have grown by around the same mount (17.9% and 17.6% respectively), while revenue has grown by only 12.3%.

In essence, there are more businesses of smaller size, generating income more effectively.

Given the wide bracket of 0-9 employees, that’s hardly definitive, but it is at least suggestive. The next task is to try and get more granular on size and on business sector.

In the meantime, I hope this is a useful summary for those interested in the world of sovereign professionals.

 

Photo by Peter van Eijk on Unsplash

 

 

The Gig Economy Data Hub

This looks interesting and useful.

The Gig Economy Data Hub aims to provide comprehensive information on all aspects of the gig economy.

The home page gets off to a great start:

A freelance graphic designer earns $25,000 for an ad campaign. A teacher drives for Uber on the weekends. An electrician owns and operates a successful small business. A stay-at-home mom sells Mary Kay cosmetics on Facebook. A recent immigrant cleans houses under the table. A retired woman knits hats to sell at craft fairs. What do these workers have in common?

There is more to what is currently called the gig economy than flavour-of-the-month media stories suggest.

The Data Hub is a collaboration between the Aspen Institute’s Future of Work Initiative and Cornell University’s ILR School. The data appears to be all US-focused, but the lessons and many of the findings will doubtless translate at least to the UK and possibly beyond.

 

Photo by Lucian Novosel on Unsplash

Serfs up – The Economist on the gig economy

The Economist has an article on freelancing: Serfs up – Worries about the rise of the gig economy are mostly overblown.

I have a couple of thoughts whenever this comes up.

‘Twas always thus

There has always been a freelance / independent / gig economy / zero-hours sector. Indeed, if you take a long view, it’s the 40 hour nine-to-five that’s the exception. Continue reading “Serfs up – The Economist on the gig economy”

Work to be one in a hundred

You don’t need to be one in a million to succeed, but you should aim for one in a hundred.

One hundred is an interesting number. In ancient Rome, a Centurion commanded one hundred men (usually between 60 and 150). Even today, an army company will comprise about 100-150 soldiers. Reaching 100 employees is a landmark, and a step-change, for a growing business.

The anthropologist Robin Dunbar proposed, in 1992, that the human brain can maintain a maximum of around 150 social relationships (Dunbar’s Number).  In more recent research, he has found that the average number of Facebook Friends is 155. You can have more links, of course. Clicking is easy, but maintaining real social relationships is hard.

Take that across to a typical professional scenario. Your business relies on the relationship (not transactional) model: clients need to know and trust you. When your client faces a problem, they can choose from just 100-150 trusted relationships to solve it.

You want to be that one per cent – the one person best suited to save the day.

 

Photo by Thomas Lefebvre on Unsplash

Focus! How to get things done – @Chris_Bailey

Anyone who prescribes meditation, coffee and wine deserves attention.

Yesterday’s Times has an interview with Chris Bailey on his new book, Hyperfocus: How to Work Less and Achieve More.

Our inability to focus, because of our digital aids to productivity, is the bane of our times.

In a fascinating article, Bailey prescribes:

  • Set yourself no more than three daily tasks
  • Do a phone swap
  • Set an hourly awareness alarm
  • Switch environments when you need to
  • Ditch brain training apps for meditation
  • Buy a cheap alarm clock
  • Save your first coffee for work
  • Play a song on repeat
  • Take a mindful shower
  • Have a glass of wine

It’s definitely worth a read and some consideration. Over a glass of wine.

The interview is here.

The man, via TED, is here.

The book is here.

More open plan

Just adding to my earlier post on open plan. Here’s Wally Bock’s Three Star Leadership, via Execupundit, with a wealth of articles on the subject.

His own summary:

People seem to want a one-size-fits-all answer to the question about what makes the best workspace. I don’t think there is one. I think the answer depends on the people involved, the work to be done, and the size of the team.

Read the full breadth of perspective, here.

 

Photo by Annie Spratt on Unsplash

The ins and outs of open plan

The debate over open plan office layouts rages on.

For many organisations, the advantages of real-estate savings, increased collaboration and organisational flexibility seem overwhelmingly to the good.

To this, today’s Times adds research from the University of Arizona that suggests open plan is good for the participants’ health as a result of higher levels of activity and lower levels of stress.

On the other side of the argument, the Economist’s Bartleby column reported some possibly counter-intuitive findings: Open offices can lead to closed minds. A report published by the Royal Society – The impact of the “open” workspace on human collaboration – found that face to face interactions decreased by around 70% once open plan was introduced, as:

“transitions to open office architecture do not necessarily promote open interaction. Consistent with the fundamental human desire for privacy and prior evidence
that privacy may increase productivity, when office architecture makes everyone more observable or ‘transparent’, it can dampen F2F interaction, as employees find other strategies to preserve their privacy; for example, by choosing a different channel through which to communicate. Rather than have an F2F interaction in front of a large audience of peers, an employee might look around, see that a particular person is at his or her desk, and send an email.

 

Photo by Studio Republic on Unsplash