By Richard Newman, Director at de Poel,
Working patterns since the economic crisis in 2008 have changed up and down the country, in large corporations through to SMEs and microbusinesses. A major part of this shift is due to flexible working, and it would be hard to find a business owner who hasn’t noticed the number of workers opting for a more flexible working pattern over the past few years.
Flexible workers now make up circa 47% of the UK workforce and judging by the ONS labour market statistics, which keep going up, this trend is here to stay. More workers, including many white collar workers, are now working on temporary contracts as it allows them to manage their work/life balance and charge a higher rate for their consultancy. These temporary placements are rising at 7% each year, so SMEs need to embrace this trend if they want to benefit from the attractive business advantages of using a contingent workforce.
As a small business owner, you may be thinking, why should I consider a flexible workforce? What can it do for me? Isn’t employment at its highest since 1997 meaning I have a great pool of talent to pick from? The answer is that there are many business benefits which can directly boost the bottom line; something SMEs are looking to capitalise on following the recent economic woes.
As a small business, the prospect of adapting and adjusting your recruitment processes and staffing models sounds like a major hassle, and would require time you don’t have. However, you would be surprised at how much a fresh and creative contingent workforce can contribute to the overall innovation of a business. With increasingly varied backgrounds and experience, these workers bring original and different ideas for a new approach to problem solving.
What’s more if you’re worried about the bottom line, a contingent workforce can be very cost-effective. The current economic climate has created volatility in the market place leaving many SMEs with fluctuations in orders and service levels. Labour is one of the biggest costs for any organisation, and a contingent workforce is beneficial to SMEs as it allows for scaling staffing requirements in line with business performance and changing needs. Therefore, if a big project comes in, pulling in flexible manpower instead of stretching employee resources too far can help save time and improve productivity. The extra pair of hands will be able to do the job properly instead of rushing through the task – ensuring high quality standards continue to be met.
Additionally, scaling workforces up or down helps to reduce the costs SMEs are subjected to with a full-time workforce such as absence, sick leave and maternity cover, whilst also reducing long-term employment costs such as training. In the UK, absence through sickness is responsible for a loss of 131 million working days a year and more than £17bn in revenue which has a significant impact on the bottom lines.
A fear many small businesses experience with temporary workers is managing drops in productivity, however this should not be a concern. Temporary working, for many, is now a lifestyle choice meaning these individuals are self-motivated and results-driven. Making an impact on an employer is essential for these workers if they are to build their professional network within businesses, hopefully gaining new references and building their experience.
UK SMEs are agile and adapt quickly to changing business needs. However, to evolve and grow with the recovering economy, recognising and embracing labour pattern shifts is one way SMEs can stay ahead of their larger peers. Accommodating workforce needs ensures optimum output and has financial benefits, along with a motivated workforce. The business benefits are clear, so as we move towards the new financial year, the question is: can SMEs afford to ignore the temporary working phenomenon?