Nearly every British business looks to freelance staff for specific expertise

Despite the fact that 95 per cent of businesses employ freelancers, a little more than 1 in 3 organisations have a formal strategy in place to bring the priorities of this new workforce in line with the objectives of the business.

These results come from the latest survey conducted across five European countries by HR services provider SD Worx and Antwerp Management School.

The two organisations investigated the contributing factors driving the flexibilization of the labour market and how businesses are approaching the issue.

The survey found that the majority of companies report that at least 10 per cent of their current workforce to be made up of self-employed workers, highlighting an urgent need for businesses to change the way they manage non-permanent employees.

Businesses crave flexibility

Across five European countries, the most important reason for businesses hiring freelance staff is flexibility, with 65 per cent claiming this to be the deciding factor when taking on new employees. Interestingly, the second most popular reason for businesses hiring self-employed staff is the specific expertise that they provide, according to 63 per cent of respondents.

In Germany, The Netherlands and the UK, this is actually the number one reason why organisations hire non-permanent workers, ahead of the flexibility that it provides them with. Speed and cost are also major drivers with 43 per cent of the UK decision-makers claiming that it is quicker than posting a job vacancy, while 36 per cent referenced lower cost as a decisive factor.

Employers are neglecting workforce planning

Considering that freelancers now constitute a significant proportion of the workforce, the fact that 65% take an informal approach to workforce planning should be alarming.

“As businesses hire more and more self-employed staff, they need to ensure that their HR policies are constantly being adapted to suit the needs of this new workforce,” comments Jeremy Campbell, Chief Commercial Officer at SD Worx UK & Ireland. “Today too many businesses are taking a reactive or ad hoc approach to the Gig Economy which will prove damaging in the long-term. A failure to adapt will cause areas like talent management to become a huge challenge for organisations, especially as their focus is turning on hiring highly skilled freelance staff. The nature of the workforce is changing with every day that passes – yesterday’s policies will no longer suffice.”

Flexible workers motivated by more interesting work

In order to develop effective HR policies that help to manage the freelance workforce, decision-makers need to understand the motivations behind people choosing to be self-employed. For 61% of the UK respondents the main reason to become self-employed is that the job content is more interesting, while 62% claim that this style of work is a better match for their competencies. In addition to these workplace benefits, there are also several personal reasons why people choose self-employment.

On an international level, these self-employed workers are positive and forward-thinking. Of the respondents, 41% actively spend time improving their knowledge and skill set for work and 56% even develop skills that they will only require in future roles.

Businesses face problems attracting new talent

A little less than half of organisations in all countries surveyed believe that they will have no problems in attracting new talent in the next three years.

One in three anticipate a shortage in internal talent within the organisation to achieve their mission, vision and strategy in the next three years. In today’s business landscape, where the talent market is increasingly competitive, it is going to be more important than ever for organisations to find solutions to these talent issues.

Taking a proactive approach towards flexible workers is one answer. The research unveils that those organisations facing a high turnover rate are already taking this road. These independent professionals can be a great asset for businesses, as long as employers proactively consider this often overlooked group within their organisation.

“Over the next three years 55% of businesses believe that they will have a problem attracting new talent. Additionally, one in three businesses believe this talent shortage will impact their ability to achieve their mission, vision and strategy. In today’s landscape, where the talent market is so competitive, it is going to be more important than ever for organisations to find solutions to these hiring issues. Taking a positive approach towards flexible workers is one answer and is an approach that the research tells us is being taken by organisations with higher turnovers. These employees can be a great asset for businesses, as long as employers take a proactive approach to their management”, Professor Ans De Vos from Antwerp Management School concludes.