Study reveals more than half of self-employed over-service clients
Freelancers, contractors and people running their own companies are regularly doing more work they are paid for and failing to charge costs back to clients , new research* from Workwell & IPSE shows.
The study found more than half (53%) of self-employed workers admit to over-servicing clients providing extra time they do not charge for. On average they estimate they do 22% more work than they are contracted for, the research found.
That generosity with time also spills over into not charging clients costs incurred doing the work for them, the study by Workwell & IPSE found.
Around a third (34%) do not pass on any of the costs incurred as part of being a contractor, freelancer or small business owner while on average those who do pass on costs only pass on around 60%. Around 13% say they mark-up costs and add an additional amount.
Workwell, a leading provider of services to flexible workers and recruiters in the UK and overseas, collaborated with IPSE, a community of over 35,000 self-employed people. The research found not all contractors, freelancers and small business owners are over-servicing. Around 30% say they do not overservice while another 2% claim to underservice and 15% are unsure whether they do or not.
Female contractors, freelancers and small business owners are better at charging for the work they do than men, the study found. Around 39% of women do not overservice compared with 22% of men.
Chris Mollan, head of accountancy services at Workwell said: “Many contractors, freelancers and small business owners may feel under pressure to retain clients and over service as a result. There is also reluctance to charge more or ask for more money.
“That seems to apply also to passing on costs incurred in the course of work on to clients with substantial numbers not passing on any costs and most not passing on all costs incurred.
“It can be difficult to have conversations but one way to address the issue is to have a clear contract or agreement before any work is undertaken covering extra hours and costs. Contractors, freelancers and business owners would benefit from advice and support on the issue.”
Workwell’s award-winning accountancy service is designed to help contractors, freelancers and business owners to manage their business easily and tax-efficiently. Clients are supported by their own dedicated accountant and have online accounting to access and manage their accounts easily, from anywhere. It also provides umbrella company solutions for contractors.
Workwell enables businesses in the UK and overseas to more easily and compliantly benefit from flexible workforces. Its services for recruiters and end hirers are designed to take away the risk, hassle and complexity of contingent labour supply.