Big business cutbacks boost British entrepreneurship
The UK’s biggest businesses are cutting back on staffing numbers, according to figures from LinkedIn, while British entrepreneurs and sole traders, along with SMEs, are helping to compensate by keeping employment figures buoyant overall.
In research published a year on from the EU Referendum vote, LinkedIn found that some of the country’s biggest companies were cutting back on their workforce size – possibly in anticipation of the uncertainty that might come during and after the Brexit negotiations.
But after a decade of global recession in which many people were forced to set up in business on their own rather than find jobs in the traditional employment market, it seems the British public are more poised than ever to launch a career as a sole trader if they can’t find work elsewhere.
The survey covers a snapshot of LinkedIn’s 23 million members in the UK for a full financial year, from April 2016 to April 2017 – and includes the months surrounding the EU Referendum vote itself.
It revealed a slight drop in employment at big brands, down by just under 2% over the course of the year, with only the pharmaceutical and healthcare industry increasing its hiring in large firms.
Particularly strong falls were seen in admin roles and support functions, both down by around 4% each, as companies appeared to refocus their workforce spending on core disciplines within their organisation.
However, some of the most striking figures are in respect of the number of British people setting up in business on their own.
Brits in business on their own
LinkedIn found that during the same period of 2016-17, the total number of sole traders in the UK increased by 13.5%, along with a smaller rise in small companies, up by 4.1% among those with up to ten employees.
Consulting roles grew by 5.8% over the same period, while there were 6.4% more British people working in entrepreneurship professions – adding up to a substantial overall increase in entrepreneurs, sole traders and small companies, at a time when big businesses were trimming their workforces.
Some sectors saw an even bigger boost to their sole traders and single-person company statistics, with one-man bands in professional services up nearly 17% over the year, and in architecture and engineering the numbers were up by just under 18%.
Interestingly, some British people continue to look overseas for opportunities to cash in on their talents – and the most popular destination is not one of the UK’s EU neighbours, but is actually America, with nearly one in eight departing Brits heading there to work in a talented profession.
Meanwhile talent coming into the country is led by an EU country, as Italy contributed the largest number of talented inbound workers to the UK in 2016-17 for the second consecutive year.
Writing on the LinkedIn Pulse blog, Joshua Graff commented: “Across a broad spectrum of industries, British workers are increasingly becoming sole traders and transitioning to small companies.
“In a country where entrepreneurial ideas are often shot down with remarks like ‘you know X out of Y small businesses fail’, people are shunning the pessimism and embracing their entrepreneurial spirit.”
Embracing money management in business
If you are among the many British people who have set up as sole traders, you might still be managing your professional earnings and expenditure through your main personal bank current account – and this has its problems.
Although it’s possible to do this for quite simple income and outgoings, it can make it much harder to remember what was and was not a business expense at the end of the year, and anything that makes it easier to file your accounts when you’re first self-employed is worth considering.
The option is to set up a secondary account – either an Arro Personal Account to manage your finances as an individual, or an Arro Business Account for company finances – so that you can keep track of your earnings and expenditure more easily.
Either account comes with a debit card – either a MasterCard® debit or Business MasterCard® for business accounts – which you can use to make card payments directly from your professional account.
You also get access to the purpose-built Arro Money online dashboard to manage your finances, where you can sort and filter recent transactions, as well as set up Direct Debits (not currently available, but it’s coming soon!) and transfer funds to bank accounts in the usual ways – everything you need to get started in business with effective money management from day one.