UK SMEs still rely on EU citizens to outsource work

Research shows SMEs will increase outsource workload as Brexit begins, and more than half of SMEs think Brexit will bring additional costs to hiring European contractors.

Whether for or against, with almost a year passing since the British vote to leave the European Union, we’ve all had time to get used to the idea of Brexit. With the course of negotiations and discussions over a ‘hard’ or soft’ approach looming large in every political party’s general election manifesto, PeoplePerHour (PPH) wanted to gauge the feeling of SMEs when it came to the future of hiring freelancers to outsource from within the EU. The result is a mixed picture.

While only 13 per cent of small business survey respondents currently export to Europe, the vast majority outsource freelance contractors from European countries to work on projects on a regular basis.

Only a few (three per cent) hired more than 50 per cent of their labour from the continent, but with all study participants issuing at least ten per cent of their projects to European professionals, there is some concern about the potential for increased bureaucracy that Brexit may bring; almost half (47 per cent) believe that this may discourage them from using freelancers going forward.

More positively for the freelance community, the study by the UK’s leading freelance marketplace, PPH, reveals that in light of the uncertainty surrounding Britain’s exit from the EU, almost two thirds (61 per cent) of SMEs state that they would be more likely to work with freelancers while the transition takes places, and more than half (56 per cent) say that they are likely to spend more money hiring freelancers during that period.

This could be very good news for British ‘gigsters’, particularly given that almost the same number (57 per cent) have concerns about the potential additional costs involved in transferring money from the UK to the EU.

Other issues which worried SMEs over Brexit were the likely difficulties of financing their business (this concerned 63 per cent), and the possible increase in airfares (a fear for 14 per cent), while only 27 per cent thought that Brexit would benefit their business in any way.

Xenios Thrasyvoulou, founder and CEO of PeoplePerHour, comments, ‘Not surprisingly, it’s the financial impact of Brexit which most concerns the small and medium enterprises of the UK. While exporting isn’t really an issue for most, the potential hike in the cost of hiring overseas talent – not to mention the inevitable added bureaucracy – is a real concern.’

The UK, will of course try to make agreements that will eliminate these problems but nothing is for certain. Having said that an advantage could be that employment law control will be returned to the UK which may make it more appealing to set up a business here.

‘It’s crucial that the next government make the impact of hiring European talent, both in terms of red tape and costs, absolutely clear so that businesses can plan for a Brexit Britain.’

Further reading on how to outsource

Nominations are now open for the British Small Business Awards, the leading event celebrating the brightest stars in the SME sector. Click here to enter, and make sure you get involved today using the hashtag #BSBAwards. Good luck!

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