New research has revealed that small and medium-sized businesses (SMEs) in London are increasingly reliant on freelance and contract workers. The survey, from Sonovate, showed that 75 per cent of London-based SMEs had reported an increase in temporary workers, compared to 67 per cent of SMEs across the UK.
Additionally, the study found that 56 per cent of London-headquartered SMEs had seen an increase in permanent employees asking to move to contract roles since the COVID-19 pandemic. Again, this significantly outstripped the UK average of 35 per cent.
SMEs based in London were also more likely to report benefits from hiring contractors or freelancers, with 73 per cent saying temporary workers helped to contribute to a positive culture at their business. Across the UK, the average was 66 per cent.
67 per cent of London SMEs, meanwhile, said that offering flexibility to their workers helped them to attract and retain talent, compared to the nationwide average of 55 per cent. 29 per cent of London businesses reported now being more cautious about hiring permanent staff, compared to 22 per cent of firms across the UK.
Sonovate co-CEO Richard Prime commented on the findings: “London’s business community has a proud history of innovation and firms across the capital are demonstrating this once again as they overhaul their traditional working structures to attract and retain talent as well as boost competitiveness. Businesses in other regions should consider following London’s lead otherwise they risk getting left behind.”
“Rising living costs are forcing people to reassess how they work and how they can maximise their income – for an increasing number, this means moving to freelance or contract work so they can have more control over their finances. For Londoners facing the highest costs in the UK – from commuting and housing prices to nursery fees and the soaring cost of leisure activities – having this control is essential during the cost of living crisis.”
“Businesses who can help facilitate their employees’ shift to contract work are likely to reap the rewards in retaining key talent but also boosting commercial performance. However, it is not without its challenges. Initially, in order to implement these changes within an organisation, businesses will often need reliable access to funding to help to manage cashflow and allow them to be more agile when responding to upcoming projects or workload.”
