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Update May 2007
Independent Contractors of Australia is frequently asked for statistics on the numbers of independent contractors. The following statistics have been collated in response to those requests.
Summary
- 19 per cent of the Australian workforce are independent contractors, which equates to 1.9 million persons.
[2006]
When this is analysed further:
- 28 per cent of the private-sector workforce are independent contractors.
[NB: This is based on 2004 figures. 2006 figures not yet available1]
Growth has been steady, both in terms of numbers and percentages, although the growth may have flattened and may have peaked in recent times.
Independent Contractor numbers (November 20065)
| Employers (or) Owner-managers of incorporated enterprises | 673,700 |
| Own-account workers (or) Owner-managers of unincorporated enterprises | 1,231,000 |
| Total independent contractors | 1,904,700 |
Total Workforce numbers 2006
| November 2006 | 10.1 million |
| November 2004 | 9.6 million |
| Increase 2004-06 | 0.5 million (5.2%) |
Employees on 'contract': The 2006 ABS survey changed the way it asked employees if they worked on 'contract'. This resulted in a large number of employees showing they worked on 'contract' (1.12 million or 11% of workforce.)
All workers
| Employees with paid leave entitlements | 6.17 million (61%) |
| Employees without paid leave entitlements (casuals etc) | 2.07 million (20%) |
| Independent contactors | 1.90 million (19%) |
| Total | 10.14 million |
ICA Comment on 2006 figures
Independent contractor numbers have remained very much at 2004 levels, although with the large and pleasing increase in the Australian workforce over two years, the independent contractor percentage of the workforce has dropped.
Independent contractors continue to be an important part of the overall mix of the Australian workforce.
In relation to the peaking of independent contractor numbers, it is not at all a surprise that independent contractor number have stabilised. There are probably a number of factors:
- There were several significant changes in the economy during the 1990s and into 2000 that contributed to increases in independent contractor numbers. These included the rapid rise of the information technology sector, franchising and the work-from-home sector. Each of these seems to have peaked and/or reached levels of maturity.
- Restrictive employment regulations in Australia encouraged people to find different ways of working, which resulted in rises in casual work along with independent contracting. That is, if laws restrict people working the way they want or need, they will find ways to overcome the restrictions. The progressive modernizing of employment regulations in Australia since 2004 has made it easier for businesses to use traditional forms of employment.
- The highly pleasing collapse in unemployment numbers (we hope with more to come) means that businesses are forced to try and retain existing staff. The alleged lure of full-time permanent employment is the traditional way that businesses try to retain staff.
ICA delights in seeing 500,000 more Australians in work and a national unemployment figure now of 4.4% (May 2007). We hope that the unemployment figure continues to decline rapidly.
With independent contractors continuing to be an important and significant part of the Australian workforce, it remains important that:
- Governments ensure equity of treatment for independent contractors in all matters.
- Business managers ensure that independent contractors are engaged through commercial contracts that have integrity.
References
(1) Institute of Public Affairs: Just How Many Are There?
(2) Productivity Commission of Australia, Pub 2001, ISBN 1 74037 053 8
(3) Australian Bureau of Statistics, Pub 2000, Forms of Employment 6359.0
(4) Australian Bureau of Statistics, Pub 2005, Forms of Employment 6359.0
(5) Australian Bureau of Statistics, Pub 2007, Forms of Employment 6359.0
Note
ICA considers that independent contractors are persons who earn their livings by utilizing the commercial contract instead of the employment contract---in other words, they are not employees. Statisticians have tended to vary their descriptions a little as surveys have evolved. The foregoing table incorporates 2 major subsets identified in the statistics to arrive at an overall figure. The two statistical subsets that ICA uses are consistent with the definitional approach used in the 2006 Independent Contractors Act.
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