84% of small firms now depend on flexible workers

The vast majority of the UK’s small firms now rely on freelancers and part-time and project staff to help grow their business in light of the skills shortage, research from jobsite Indeed has shown.

The study, conducted with 250 small businesses (2-249 employees), revealed that 44% of small business owners are opting to hire flexible workers to “effectively scale their business”.

39% said that, when they had struggled to find the right people for vacant roles, the option to work flexibly had helped them attract more talent employees.

The use of flexible workers did vary regionally though. Only 25% of small businesses in London currently use freelancers and part-time staff, compared to 93% of small businesses in the North West – suggesting that permanent talent is easier to find in the capital and South of England.

The industries said to have been hit hardest by the skills shortage – those struggling to hire the right employees – were found to be legal services (68%), manufacturing (50%) and travel and transport (52%).

With the National Living Wage (NLW) coming into force from April 2016, the research also indicated that two thirds of small and medium enterprises are worried about the impact the NLW will have on their ability to hire and grow – a quarter already cite costs as the biggest challenges to recruitment.

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.”