The changing face of the SME workforce

More than two thirds of SMEs are now harnessing freelance talent from all over Europe.

Thanks to the Chancellor’s little NI (National Insurance) faux pas, the self-employed workforce have been hitting the headlines in recent weeks. When taking into account the findings of a recent study by leading UK freelance marketplace, PeoplePerHour (PPH), it’s little wonder that the government were seeking to maximise the revenue of this growing sector.

According to PPH’s survey of 1000 UK SMEs, a massive 67 per cent are now filling skills gaps within their company by harnessing freelance talent from all over Europe, averaging 41 hours of freelance work per month on top of their core payroll.

While almost a quarter (23 per cent) of SMEs say that freelancers enable them to cover any extra workload without having to increase overheads, it’s the ability to fill positions which local applicants lack the skills for which seems to be the biggest driver towards freelance recruitment, with 55 per cent explaining that this is the main draw for their increased freelance expenditure.

Other reasons stated for outsourcing to a freelance workforce

Increased capacity and flexibility appeal to one in three (37 per cent) of employers
27 per cent say that they simply wouldn’t be able to run their business without online outsourcing
A further 13 per cent of SMEs say that being able to easily access skilled workers without incurring recruitment fees was a major influence in their decision to take on freelancers

So how has this impacted upon the overall makeup of SME personnel? Two thirds (62 per cent) of small and medium sized business managers claim that they now work with more freelancers than employees, with teams being made up of an average of three employees versus twelve freelancers.

Through this change in team make up, it’s estimated that employers can access upwards of 50 different skills, while the in-house team are generally only able to deliver five to ten. A consequence of this is that one in five (21 per cent) of small business managers now say that their team is made up of workers from at least three different continents.

The top outsourced skills

Web Development
App Development

PeoplePerHour founder and CEO Xenios Thrasyvoulou comments, ‘Ten years ago the majority of businesses cited local staff as their main source of employees, now the majority cite freelancers as their main source of hiring. This turnaround has been rapid and the change has taken some by surprise – perhaps this accounts for the recent fracas around the Chancellor’s threatened manifesto breach.

‘Self-employed and freelance workers make an enormous contribution, not just to SMEs and the wider business world, but to the whole of the UK economy. In allowing businesses to access niche skills without the expense and trouble of recruiting a permanent employee, it could be argued that the freelancer is the real grist to the mill of British business. It’s time that we stopped underestimating the benefits that they bring.’

Further reading on SME workforce

Owen Gough, SmallBusiness UK

Owen Gough

Owen was a reporter for Bonhill Group plc writing across the and titles before moving on to be a Digital Technology reporter for the

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