HR · 15 May 2017

A quarter of small firms dependent on short-term gig economy workers

gig economy workers
A majority of small business owners accepted flexible employment created insecure work

Over one in four small UK business owners have employed short-term or freelance staff in the last 12 months, as new research demonstrated the growing use of gig economy workers.

Survey findings from insurer Zurich’s SME Risk Index, of over 1,000 business founders, uncovered a growing dependence on flexible work to enable smaller firms to grow.

The study revealed a largely positive response from employers of the experiences in hiring short-term staff. Over two-thirds of employers cited gig economy workers as vital to their company’s profitability.

For one in ten business owners, short-term and freelance workers comprised 90 per cent of their entire workforce.

Overall, almost 60 per cent of all employers cited the model as “flexible for businesses”. However, a majority accepted gig economy work lacked security for workers, while over a quarter suggested it was easy to exploit.

As the debate surrounding the workplace rights of gig economy workers starts to affect the way some of the largest on-demand companies operate, a number of smaller employers did highlight a negative impact of short-term staff.

Some two in five owners were concerned temporary or contracted work created a less dedicated workforce, while almost a third said motivation had suffered in the workplace.

Commenting on the number of gig economy workers taken on by smaller firms, Paul Tombs, head of SME Proposition at Zurich, said future policy should consider the benefits enjoyed by many temporary employees.

“It would be a mistake to characterise the entire gig economy as an exploitative tool that only benefits employers,” Tombs said in a statement.

“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.”

Following pressure from a cross-party group of MPs, courier firm Deliveroo recently updated its contract for gig economy workers to give riders greater flexibility for who they work for.

Tombs concluded that prospoals from the imminent Taylor Review into the flexible economy should acknowledge the benefits experienced by both employers and the self-employed.

He added: “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.”

Read our mini-series covering all aspects the gig economy

  1. The status of gig economy workers
  2. Looking to the future
  3. An international perspective

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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