UK employers have become accustomed to dealing with uncertainty, following arguably the most challenging trading period in living memory. First Brexit, then the pandemic, meant coping with constantly shifting goal posts and challenges. For many businesses, revenue streams dried up within a matter of days or weeks, leaving hiring managers struggling to plan their resourcing needs more than a few days ahead.
But one positive consequence of all this turbulence is that it has convinced many employers to embrace a more flexible and agile way of operating. Not only have flexible and remote working practices become the norm, but a growing number of businesses have seen the value of drawing on a flexible pool of freelancers and contractors to cope with fluctuating demand, rather than taking the risk of bringing in permanent staff.
Now as the economy regains a more even footing, more business owners are taking this agile approach a step further and seeing the appeal of ultra-skinny businesses. Keen to keep overheads down, they have realised that it’s possible to operate with few - or even zero - permanent employees, instead hiring freelancers, independents, or contractors to build a talented, creative, and flexible workforce.
Changing business models
A new breed of company is emerging which has discovered a way to be both lean and agile while still satisfying their customer’s requirements and promoting a happy workforce. Now instead of using freelancers on an ad hoc basis, they are using them as an extension of their business, and to give them a competitive advantage in an increasingly challenging and uncertain world.
With more companies now comfortable with remote working, virtual businesses are becoming commonplace, particularly within the media, communications, and marketing sector. These companies employ a small core staff of permanent employees and hire freelancers on an ongoing basis, giving them the agility to ‘flex-up and flex-down’ as they need, with an immediate cost saving on fixed overheads.
Individuals can take responsibility and commit to accounts depending on how much time they have, or for larger projects, they can collaborate as part of a network, bringing a range of different skills and reducing any potential risk for the business. By using freelancers, employers can also access individuals they may not be able to afford on a permanent basis, thanks to the prevalence of highly skilled independent professionals, who bring a wealth of knowledge and experience from numerous different companies.
There’s no reason then, in theory, why this approach couldn’t extend to one permanent member of staff with only freelancers making up the rest of the company. In fact three-quarters (74%) of small and medium-sized businesses say they recognise the benefits of hiring freelance or contract workers for specialist support over having to invest in a permanent workforce.
Supporting employee work-life balance
And adopting a ‘zero employees’ structure doesn’t just suit employers. Employees have been demanding more flexibility over their hours and where they work for years, but the majority of businesses have resisted real change. Now, remote and flexible working have become a reality, with 50% of UK employees working from home some of the time, up from 37% before the pandemic. An even higher number (60%) would prefer to work remotely always or some of the time if they could choose.
Moving towards a leaner model powered by freelance support is the next logical step for many individuals and businesses, helping to address the challenges that both are facing. By embracing working with freelancers, businesses can satisfy employer demands for flexible working and autonomy, whilst still retaining the best talent.
Problems and challenges
There are, of course, a number of hurdles that businesses must overcome in order to make this model work. First, there’s still a great deal of red tape in the way. For example, IR35 rules are designed to clamp down on ‘disguised employment’ by assessing factors such as whether a freelancer works for just one business, how much control the employer has over their work, and whether that person can be substituted by a colleague or associate. Recent changes to the rules have also shifted the responsibility for defining the tax status of contractors and freelancers from the individual to the employer. This obviously makes hiring a larger number of freelancers more complex.
Second, running a business in this way requires a complete re-think of how to manage your workforce. Managing the consistency and quality of work becomes both more important and more difficult. Two things that are essential to making this work are good communication and the right technology, both of which complement each other.
Technology is driving global conversations
Commentators believe that digital adoption accelerated by around three to four years during the pandemic, due to the demands of the virtual workplace. And with the video conferencing, collaboration, and productivity tools now at our disposal, there’s no reason why firms can’t hire top talent from around the world to enhance their expertise, services, and ultimately their attractiveness for prospective clients and customers.
What’s more, international expansion needn’t only be for huge corporates with big office budgets. Through using a savvy combination of communications methods, businesses of all sizes can tap into the worldwide talent pool in a cost-effective way. Professionals across all sectors have become comfortable with this way of operating and realised that it doesn’t mean any loss of productivity – if anything productivity increases due to a reduced need to travel and commute.
Ultimately, the firms that embrace these changes and opportunities will be the ones that operate most efficiently, with an improved workforce and often for a reduced cost. The shift to a more agile and flexible workplace was already underway prior to 2020, but it has been put into overdrive by the rapid change of the last two years. If we dare look forward to the next ten years, then I think operating with zero permanent staff will no longer be a surprise, but a norm and an option that all businesses consider.
If you’re a business looking for interim support, The Work Crowd can instantly connect you to the right professional freelancer to best support you and your business.