The bulk of UK small and medium-sized enterprises depend on flexible workers, including freelancers, part-time and project staff, to overcome national shortages in skilled employees.
New research from jobsite Indeed shows that 84 per cent of UK SMEs depend on such labour.
The study finds that 44 per cent of those that hire freelance and flexible workers claim that this supports them to effectively scale their business.
As competition for highly-skilled workers heats up, flexible working is becoming an important avenue for SMEs looking to attract talent from larger rivals.
More than half of UK SMEs claim they struggle to find the right people to fill vacant roles, while over a third (39 per cent) of SMEs say that offering the option to work flexibly helps them to attract the most talented employees.
Alongside growing skills shortages, the study uncovered the impending introduction of the National Living Wage in April 2016, as a key challenge for SMEs who are looking to hire.
More than two thirds of SMEs claim that the new ruling will negatively impact their ability to make hires and grow, while over a quarter already cite costs as the biggest challenge they face when hiring.
The industries struggling most to hire the right employees are legal services (68 per cent), manufacturing (50 per cent) and travel and transport (52 per cent).
Bill Richards, UK managing director at Indeed says, ‘SMEs 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.
‘With staff costs rising, SMEs will need to find new efficiencies to maintain profit margins and ensure that they are still able to appeal to the most talented recruits.’
Richards adds that 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, SMEs 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.’
Despite the benefits of a flexible workforce, the survey reveals that only a quarter of London-based SMEs currently seek support from flexible staff, one of the lowest portions across all regions of the UK. This is despite nearly 20 per cent of London-based SMEs expecting to hire more than five new staff within the next three months.
In contrast, 93 per cent of UK SMEs in the North West rely on flexible workers.