More than a quarter of UK SMEs rely on gig economy workers

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Results from the latest Zurich SME Risk Index have revealed that more than a quarter (26 per cent) of small and medium-sized enterprises in the UK have employed at least one gig economy worker, a worker with one or more short term contracts or doing freelance work in the last 12 months. The findings come just days before the deadline for submission of evidence to the Taylor review, which will look to investigate possible reforms in modern employment practices in the UK.

Of those decision makers that have employed gig economy workers in the last 12 months, many attest to the importance of flexible workers to their business, with more than two thirds (70 per cent) agreeing that gig economy workers are important to their company’s profitability. One in ten of these decision makers (10 per cent) reported that gig economy workers make up 90 per cent of their workforce or more, while more than two in five (41 per cent­) report that gig economy workers make up at least a quarter of the workforce.

When asked to describe gig economy working practices from the perspective of a worker. Almost three in five (58 per cent) stated that they believed the gig economy provided “flexibility for workers”, while more than a third (34 per cent) said that gig economy work provided “new opportunities” for workers and was “time efficient” (28 per cent).

Yet, the survey demonstrates that SME decision makers are conscious of the risks for gig economy workers, as well as the benefits. When asked to select as many as was appropriate, more than half (52 per cent) agreed that gig economy work “lacks security”, while more than a quarter (27 per cent) agree it can be “exploitative” and a fifth (20 per cent) are of the opinion that the arrangement can be “unfair” on workers.

There are potential negative impacts for businesses too, and a significant number of decision makers agree that gig economy work can result in a lack of security for their own business. Two in five (40 per cent) reported concerns that gig economy work can create a less dedicated workforce and almost a third (30 per cent) agreed that it can create a less motivated workforce.

Nonetheless, Zurich’s statistics suggest that, overall, SMEs are embracing the opportunities the gig economy has to offer. Almost three in five (57 per cent) agree that gig economy work was “flexible for businesses”, and nearly two in five (38 per cent) thought it created greater opportunity to “better manage workforce capacity”.

Paul Tombs, Head of SME Proposition at Zurich, comments: “With so many UK SMEs employing gig economy workers, it would be a mistake to characterise the entire gig economy as an exploitative tool that only benefits employers. Self-employment is on the rise and demonstrates an increasing demand for flexible work which is beginning to shape the way that businesses think about workforce management.

“While politicians and the media voice concerns that gig economy work is about maximising profits and manipulating staff, when we speak to business owners, it is clear that the majority associate it with flexibility and opportunity. If the gig economy has sprung up as an imperfect solution to the increasing demand for flexible work, then a review of the system should focus on reforms that maximise the benefits for all parties rather than descending into a blame game.”