Small Businesses Now Rely on Flexible Workers to Fill Skills Gap
Over two thirds of the UK’s small and medium firms say the introduction of the National Living Wage will harm their ability to hire and grow
The majority of the UK’s small businesses now depend on flexible workers, including freelancers, project and part-time staff, to counter the UK’s skills shortage. According to research by Indeed, which featured 250 small and medium businesses, small business owners are also hiring flexible staff to help scale their business and expand – 44% of those surveyed see freelancers as a route to scale-up.
Business owners are using freelance staff in order to compete with larger firms for talent as 39% said that giving the staff the option to work flexibly had helped them to attract skilled talent.
However, the number of firms using flexible staff did vary according to region, with only 25% of companies in London using freelance staff – a stark contrast to 93% of small firms in the North West – suggesting that is easier to hire permanent staff in the capital.
The UK’s skills shortage continues to affect the small and medium business community, in particular for firms in industries such as legal services (68%), manufacturing businesses (50%), and travel and transport (52%).
Alongside growing skills shortages, the study also found that many small and medium enterprises are concerned about the impending introduction of the National Living Wage.
Set to come into play from April next year, over two-thirds of businesses surveyed said they felt the ruling would negatively impact their ability to recruit staff and grow.
Bill Richards, Indeed UK managing director, said:
“Small and medium enterprises have less time and resources to devote to recruiting, making it increasingly difficult for them to compete with larger and more established companies for the best candidates.
“It is promising to see that so many small companies are already embracing a flexible workforce as an effective way to overcome the challenges of hiring in today’s market. Thanks to their nimble structure, small firms are in many ways better placed than larger companies to take advantage of this new breed of jobseeker, which could help them to counteract the impact of the National Living Wage.”