Contractors key to fixing SME’s cash leak

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UK small businesses could save thousands of pounds by taking on contractors, a new study reveals.

Freelance jobs site PeoplePerHour claims that SMEs are losing out on £6,297 every year as a result of wastage and spare capacity. The report said that by hiring contractors as and when needed, businesses could shore up their finances and continue to drive the UK’s economic recovery.

The study also revealed that SMEs have enjoyed a 75% cut in transaction costs as a result of hiring freelancers. This saving has allowed small firms to invest heavily in business development and further grow their operations.

PeoplePerHour claimed that while hiring a freelancer used to be viewed as a risk, the emergence of highly skilled “hyper-specialists” has created niche subcategories within traditional roles. This has given SMEs more confidence when taking on contractors, as they can be sure they are getting the skills they need at the right time.

Xenios Thrasyvoulou, founder of PeoplePerHour, said that the changing nature of business means that on-demand services are being required more and more. He added: “Speed and accessibility are today’s buzzwords and it’s no different when making recruitment decisions. It is literally a whole new economy in the making.”

Meanwhile, the study also claimed that the freelancer labour market is steadily growing at a rate of 3.5% every year – faster than any other sector. It predicts that if this trend continues, contractors could account for half the working population by 2020.

Have your say

Are you a contractor? Have you witnessed an increase in demand for your services from SMEs? Do you believe the freelance labour market will continue to grow? Join in the discussion on Twitter, or leave a comment below.