In 1946, American entrepreneur William Russell Kelly established the first temporary staffing agency. Since then, demand for freelance and contract working has surged globally, providing a model for some of the most successful enterprises of recent times and changing the way we think about business.
The UK’s gig economy is booming, with an estimated 2 million freelancers in 2018. These numbers are set to continue rising. This ongoing surge has been in large part caused by millennials seeking a flexible, part-time work, often to complement their studies. Temporary working is a good way to a foot in the door in the world of work, to gain valuable experience and to find out what working environments suit someone.
However, it’s not just the younger generation that find temporary working attractive. Quality of life and flexible working patterns are increasingly valued by an ever-wider cohort. Parents of school age appreciate the ability to work school hours, or from home. Temporary working means that a parent can even take the summer off to be with their children during the school holidays. Retirees often wish to dip in and out of work as it suits them.
Despite these benefits, the gig economy has recently faced much criticism. From a business perspective, it is sometimes viewed as a disruptive force, posing compliance and training issues. However, technology has made such problems easily surmountable and they should not dissuade a business from benefitting from temporary staffing.
The benefits of contract and freelance workers are manifold and often overlooked. Contract workers provide businesses with greater flexibility, allowing them to adjust more easily and rapidly to workload fluctuations. Processes are hence rendered more streamlined and resource-efficient. Businesses can evaluate workers without having to make long-term commitments. Performance in a temporary position is a much better indicator of a worker’s suitability than an interview. It is common for temporary workers to end up in permanent employment when an organisation proves to be a good fit for both parties.
Temporary workers can be selected for the focused experience required for a particular project. They are used to adapting to new organisations and hitting the ground running. They bring useful fresh perspectives. When time is of the essence, recruitment lead-time is minimised: they don’t have to give notice and hiring can even take place remotely, since there is much less at stake than when hiring a permanent employee.
Freelancers and contractors’ tax and payroll affairs are dealt with externally, often via an umbrella payroll company or limited company, and so employers are freed from those administrative burdens. This means that significant savings can be made in relation to company payroll and the business’ supply chain. Temporary staff will also generally cover their own healthcare and similar benefits.
In our digital age, businesses have their pick of freelancers and contractors from around the world rather than just in their immediate geographical area. This allows for round-the-clock operations. It is already common in some industries for tasks to be sent overnight to India where a graphic designer or software developer, for example, will be both awake, and a lot cheaper to hire than one based in London or New York. You can simply email off a task at close of business and arrive back in the morning to find it completed.
Another important use of temporary workers is when undertaking major one-off projects or contracts. Small enterprises in particular may find a need to temporarily swell their staff numbers for a few months if they land an unusually large contract.
The gig economy has been criticised in some quarters as lowering job security for employees. Much of the commentary implies that people are increasingly forced into temporary working due to a lack of available permanent jobs. The statistics suggest otherwise.
The January 2019 ONS UK Labour Market Survey found that there were 1.53 million temporary employees at the end of 2018, representing 14% of the total UK workforce. The ONS asks temporary employees why they are working temporarily. Only 26.8% said it was because they were unable to find a permanent role. 29% said they simply didn’t want a permanent job while 37% cited an “other” reason for temporary working. Over 73% of temporary employees are therefore working temporarily for a reason other than an inability to find a permanent position. These figures do not include contractors, but they suggest that the trend towards temporary working is largely driven by a workers seeking greater flexibility.
It is an unfortunate fact of life that a minority of unscrupulous employers will treat employees unfairly. Yet many of the same legal protections apply to both permanent and temporary workers, for example as regards health and safety and discrimination. The UK government’s Good Work plan was announced in December 2018. This will bring welcome additional protections for UK workers. Business Secretary Greg Clark introduced the plan saying, “Since 2010 we have higher employment and lower unemployment in every region and every nation of the United Kingdom and wages are now growing at their fastest pace in almost a decade. This success has been underpinned by an employment law and policy framework which strikes an effective balance between flexibility and worker protections. Businesses have been able to thrive and create jobs in record numbers as a result of flexibility and a celebration of innovation.”
Increased flexibility for both workers and businesses creates jobs and prosperity. Temporary working is a vital part of modern workplace flexibility. Aided by technology, and apps such as Airbnb, Uber and Amazon Flex, it is clear that the trend towards the gig economy is set to increase in the years ahead. Managed properly, this can provide increased opportunities for businesses and workers alike.
Julian Pilling, CEO