Home Business News Businesses shift from full-time staff to part-time and freelancers amid hiring challenges

Businesses shift from full-time staff to part-time and freelancers amid hiring challenges

by LLB Reporter
19th Jul 23 6:14 am

New data today reveals that full-time staff now make up just 57% of the average UK company’s workforce, as businesses become increasingly reliant on part-time employees and freelancers, who now make up the remaining 43% of workforces.

This comes as the ONS reveals there are 1.1 million open vacancies in the UK, with 8 in 10 businesses saying they plan to ramp up hiring before the end of the year, but 60% lamenting that it is a challenge to fill roles.

The data is from the UK Workforce Index, a new report launched by leading freelance marketplace Fiverr surveying over 1,000 UK freelance and self employed workers and 500 decision makers at UK businesses. Key stats from the report include:

  • The average UK company’s workforce is now made up of 58% full time workers, 21% part time workers and 22% freelancers
  • 96% of businesses say that they have engaged, or will engage freelance support in 2023
  • Amid a skills shortage, the most common reason for businesses to engage freelancers was to integrate missing skills in their permanent workforce (52%)
  • Despite demand for their services, only 12% of the freelance and self employed community feel supported by the government and only 1 in 10 believe their career path is encouraged by society
  • Just 53% of freelancers or self employed workers believe they are fairly paid
  • 36% of UK freelancers say they are ‘regularly’ paid late by the organisations they work with
  • On the growth of AI, 70% of freelancers believe not enough is being done to educate around how AI will impact freelancer services but over a third (36%) believe it will create new opportunities

Freelancers support UK business amid hiring challenges

Following a flurry of layoffs earlier this year, 45% of UK businesses now say that remaining staff are struggling with workloads. As a result, 96% of businesses have engaged, or will engage freelance support in 2023, and 50% say that their reliance on freelancers has increased.

In line with businesses’ hiring needs, the most common reason to engage freelancers is to supply missing skills in the permanent workforce (52%). But nearly four in ten businesses (38%) said that they worked with freelancers to support staff workloads and 36% said it was to increase productivity.

Despite sky-high demand for freelancers, the community feels unsupported

Only 12% of freelancers feel satisfied with the current level of government support. 36% of freelancers say they are ‘regularly’ not paid on time by the businesses they work for and only a slim majority (53%) feel they are fairly paid.

Where the government has made interventions, such as 2019’s off-payroll working rules, IR35, it has not been entirely successful, mainly because of inadequate communication, according to respondents. Three quarters (76%) of business managers say that they are aware of what IR35 is; but conversely, 56% agree they either don’t understand it, or don’t know about it.

Despite the UK now being home to over 4.4 million freelancers and self employed workers, only 1 in 10 feel that their career is encouraged by education institutions or society in general. Starting a freelance career is a minefield. The majority (65%) said worries about financial instability were a barrier to beginning their new career and most were also worried about how they’d find their initial clients (51%). A sizable minority (37%) said that a lack of knowledge around how to even become freelance presented a barrier.

Businesses aren’t optimised for working with freelancers

Despite the vital role they are playing, the study has revealed that UK businesses aren’t always creating an appropriate environment for freelancers to work in. More than a quarter (27%) frequently encounter unclear or incomplete briefs, creating more friction and wasting time. Only half of businesses provide a dedicated point of contact for freelancers within the organisation. Only half invite freelancers to team meetings. Less than half (44%) give freelancers the option to work in their office; 62% don’t add them to messaging apps like Slack or Teams; and 61% won’t invite freelancers to social activities.

Bukki Adedapo, UK Country Manager at Fiverr said, “Findings from our UK Workforce Index show that the once-typical full-time, permanent employee is now barely a majority as workforces become more of a mix of full time, part-time and freelance workers.

“For the UK government and businesses to meet this seismic shift, they need to enable freelance workers to work seamlessly alongside full-time staff. Our research shows that there is work to be done to ensure regulation and the process for embedding freelancers into companies falls in line with these new expectations, so that the economy can continue to reap the benefits of freelancers in the workforce of the future.”

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