By Marcus Leach
The UK’s small to medium sized enterprise (SME) sector is planning to hire freelancers and remote workers in an effort to increase headcount whilst remaining flexible and rapidly scalable in an uncertain market.
SMEs that trade overseas are faring significantly better in the economic downturn than those solely focused on the domestic market.
These are the findings of the latest Business Tracker report from Regus, the world’s largest provider of flexible workplaces, which presents the views of over 2000 small and medium-sized enterprises.
42% of SMEs plan to recruit freelance staff in the next year and 29% of those firms planning to hire permanent staff will opt for remote workers. Amongst UK SMEs that trade internationally the shift towards a flexible, remote workforce is more marked: 49% intend to hire freelancers and 39% remote workers. Business confidence in the SME sector has slipped 20% since April, and the proportion of firms reporting revenue and profit growth has also declined.
SMEs that trade with overseas markets are performing noticeably better than domestic rivals. Business confidence is significantly more buoyant (88 and 79 respectively) and the proportion of firms reporting profit increases is a clear 10% higher (30% compared to 20%.)
Management Process Systems Ltd is an SME computer software business based in Cambridge. With their Danish partner Docia they have a customer base across the UK, Scandinavia and New Zealand.
"Small firms that harness mobile and virtual working practices reap multiple business benefits," Des Downey, Managing Director, said.
"We decided some years ago to move away from the traditional approach of recruiting permanent staff who commute to a centralised office; that model just doesn't make sense when the office workers we want to attract live in different places and the salesforce need to be mobile anyway. Our direct employees work remotely and we use freelance sales and marketing personnel in Winchester, High Wycombe and London.
"This virtual model gives us business scalability, reduced overheads and access to a wider talent and customer prospect pool. Plus, it matches the way that our customers' businesses are evolving - people want to work anywhere, anytime.
"Overseas trading will form an increasingly important part of our business and will insulate us well when times are tough in the UK market. There is no reason that smaller firms should shy away from doing business overseas, especially in the IT sector where solutions can be delivered over the internet. We chose the partnership route, and recently signed an agreement with Danish company Docia to market our joint portfolio in the UK and Scandinavia. Many of the traditional barriers can be overcome these days, for instance as a Regus customer we could hold meetings or use the business lounge at the local centre on our overseas trips."
Celia Donne, Regional Director at Regus, said SMEs know they must continue investing in growth, despite the economic struggles.
“The Regus Business Tracker illustrates the recent reversal in the national economic outlook, with optimism taking a sharp downturn since April," she said.
"Despite this, SMEs realise that they must continue investing in growth, so freelance and remote working are becoming increasingly popular solutions to increase headcount while remaining flexible and rapidly scalable. 27% of the employed population in the UK are now deemed to be flexible workers, which illustrates the significant shift that has already taken place in the employment market.
“Firms only operating in the national market should take note that they are being outperformed by those targeting overseas markets. It is now possible for even very small operations to establish a low-risk presence in overseas markets without making lengthy premises or equipment commitments and allowing them to expand or withdraw depending on market conditions.”
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