Self-employed satisfied overall with working conditions

Surveys of the self-employed and small entrepreneurs in the Czech Republic conducted by RILSA in 2006 and 2012 reveal a relatively high level of satisfaction with working conditions. A comparison of results between the two waves show that the self-employed have become even more satisfied with their working lives since the onset of the 2008 economic crisis. A proportion, however, are less happy, having opted for self-employment only because they could find no other form of work.

About the study

The percentage of self-employed people in the Czech Republic (17.9%) is relatively high compared to the EU average of 15.5%. Beyond these Eurostat figures, however, information on this category of workers is limited.

In 2012, the Research Institute for Labour and Social Affairs (RILSA) in collaboration with the market research agency Factum Invenio carried out a representative survey which focused on the social and economic conditions of the self-employed and small entrepreneurs.

The sample size was 1,005 self-employed people. It was designed as a follow-up to a comparable survey conducted by RILSA in 2006 which involved interviews with 1,141 self-employed workers. Comparing the results of the two surveys allowed researchers to explore changes in the social and economic status of the self-employed as a consequence of the 2008 financial crisis.

For technical reasons the research sample did not include workers in so-called bogus self-employment.

Evaluation of working conditions

The survey asked employed and self-employed people from the same professions about their overall working conditions. In 21012, 36.7% of self-employed people considered their working conditions to be better than their employed counterparts. This compares to 34.2% of employed workers who considered their conditions to be worse than those of the self-employed.

This represents a slight change compared with 2006, when the proportion of positive and negative answers was more or less equal. Nevertheless, the difference is not very significant and the high level of diversity of the answers is due to the internal diversity of the self-employed sample.

Data revealed that the situation prevailing prior to becoming self-employed influenced the perception of subsequent working conditions. For example, those who had started a business as a result of unemployment described their working conditions as relatively poor. A high proportion of this self-employed subgroup felt that the working conditions of the self-employed were worse than those of employees (45.3%). Almost 60% said that they would close their businesses should they be offered employment with a higher or more secure income.

Working time and self-employment

The working conditions of independent workers are often characterised by long working hours. More than 17% of the self-employed in the sample worked at least 60 hours a week in 2012 and a further 51% worked between 40 and 60 hours per week (Figure 1).

Nevertheless, in comparison with the results of the 2006 survey, total working hours were found to have decreased; in 2006, 30% of the self-employed said they worked in excess of 60 hours per week.

Figure 1: Average weekly working hours among the self-employed

Figure 1: Average weekly working hours for the self-employed

Source: RILSA 2006, 2012

The longest working hours were reported by self-employed people in sectors such as agriculture, transportation and construction. Self-employed men reported longer working hours than women. Researchers were told by 11.3% of self-employed people that they worked every weekend and on public holidays, and 64.7% said they regularly worked at weekends and on public holidays.

The statutory minimum length of annual paid leave for employees is four weeks in the Czech Republic. However, only half of the self-employed interviewed said they managed to take at least three weeks’ holiday a year. The remainder reported taking fewer holidays, with some saying they did not always take an annual holiday, and 5.3% of the sample saying they could not afford to take holiday leave.

These figures can, however, be seen as an improvement on 2006 when 11.4% of the self-employed sample reported that they were unable to afford to take holiday leave.

Reasons for starting a business

The survey asked what had motivated workers to become self-employed.

The data suggest that one of the most important reasons is the financial aspect of working independently (Figure 2). Indeed, the majority of respondents in both waves of the survey said that their family’s financial situation had improved since they had become self-employed. The overall figure for this aspect of working conditions, however, was ten percentage points lower in 2012 than in 2006.

Figure 2: Comparison of the financial standing of the family before and during self-employment

Figure 2: Comparison of the financial standing of the family before and during self-employment

Source: RILSA 2006, 2012

However, finance does not appear to be the most important reason why people become self-employed. The ability to make decisions independently was the main reason given by two-thirds of those for whom entrepreneurship was their main economic activity.

A higher level of satisfaction through being self-employed was a reason given by 44% of respondents, and 42% said their income was higher than it had been when they were employed than in employment and that they had the chance to be creative (Figure 3).

Nevertheless, a comparison with the 2006 data implies that independence, satisfaction and creativity – all mentioned primarily by highly-qualified workers in the first survey – became less important between the two surveys. A higher income and escaping unemployment became relatively more important.

Figure 3: Main reasons for being self-employed

Figure 3: Main reasons for being self-employed

Source: RILSA 2006, 2012

The apparently increasing importance of the economic aspects of self-employment is even more pronounced among those who are self-employed in addition to having some form of employment.

The most significant increases in the main reasons given for self-employment were insufficiency of income from main employment, the need for additional income to satisfy family needs, and that a respondent’s main employment was only part-time.

Commentary

The self-employed are, on the whole, satisfied with their working conditions, and the majority said they would remain self-employed even if they were offered better paid employment.

Long working hours, partly the result of the blurring of working and non-working time, are usually compensated for by a feeling of independence and higher remuneration than offered by employment.

This does not apply to all the self-employed, however, and particularly not to those for whom self-employment serves as a means of escaping unemployment. These people tended to start their businesses with little or no capital, limiting the types of activities they are able to perform, and often continuing the precariousness of their former position into self-employment.

References

Vlach, J. (2013), ‘Změny sociálního a ekonomického postavení osob samostatně výdělečně činných v roce 2012 ve srovnání s rokem 2006’ [Changes in the social and economic status of the self-employed in 2012 compared to 2006], in Fórum sociální politiky [Social Policy Forum],Vol. 7, No. 5, pp. 21–24.

Vlach, J. et al (2013), Sociální a ekonomické postavení osob samostatně výdělečně činných v ČR v roce 2012 [The social and economic status of the self-employed in the Czech Republic in 2012], RILSA, Prague.

Štěpánka Lehmann, Research Institute for Labour and Social Affairs (RILSA)

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