In light of newresearch showing that short-term, contracted employment is highly valued by Britain’s freelance workforce, Richard Abelson, director at recruitment consultancy?MERJE, considers the benefits to a small business owner of adopting a flexible employment strategy.
An uncertain economic climate has resulted in a shift in the marketplace, with company owners increasingly turning towards contracting to recruit candidates accessing the skill set without the need to add permanent staff to the payroll.
There are several reasons why owners of small companies lean towards this model, not least because of the flexibility it offers. We are often approached by clients looking for candidates for specific projects or to meet extraordinary business deadlines, as well as more typical? scenarios such as covering maternity, annual and sick leave.
And were not alone. This model is proving more popular than ever, with contractors and freelancers now making up a huge proportion of the UK workforce an estimated 1.91m, according to the Labour Force Survey (LFS).
Clearly, the workforce is shifting. But how do you know which model is right for you? Should flexible employment methodsonly be a solution during turbulent times, or are there advantages to using this model even during times of economic growth?
The benefits of flexible employment
Budgeting pressures around recruiting permanent staff and even freezes on hiring make contractors a very attractive prospect. Crucially, businesses can scale up and down as required, without the expenses associated with hiring and firing.
Seasoned contractors are usually quick to adapt to new working environments, and are incentivised to go the extra mile, as the quality of their performance determines whether they win repeat work as well as helping to build their reputation in the industry.
Hiring contractors is also a low-risk way of assessing whether potential new employees are able to operate at a high level, fit the corporate culture and work well within the existing team.
Of course, flexible employmentis not always an appropriate solution for every business need. However, it can work well as part of a long-term recruitment strategy. As the number of freelancers increases, this will become a viable option for more organisations in times of prosperity as well as difficulty.
Four things to consider for a flexible employment strategy
There are a number of issues to consider when trying to decide whether hiring a contractor is more appropriate than recruiting a permanent member of staff.
If the business requirement is time-sensitive, then a contractor is nearly always the best option. An experienced individual can be placed within a week or two, whereas recruiting a permanent member of staff can take up to three months and in some cases, longer.
One of our clients was recently acquired by another company and there was an urgent need for extra resources. We were able to get a temporary candidate placed within only four days. There have also been cases where our clients have had to respond to requests by regulatory bodies and within seven days of being instructed, a candidate has started work.
A permanent hire is generally a more cost-effective solution, as continually paying a high day-rate can be a difficult model to maintain in the long-term.
However, although the initial cost may be higher in the short-term, this is only for the duration of the contract, meaning the company isnt stuck paying a high salary for an employee it no longer needs.
(3) Nature of the work
Following a spate of tribunal rulings against HMRC, The Association of Taxation Technicians (ATT) has called for the tax authority to update its guidance on the categories that determine which flat-rate of VAT should be paid by sole traders. more»