Half of SME bosses believe the gig economy is good for business

Gig economy
According to research by Close Brothers Invoice Finance, over half of SME senior managers believe that the growth of non-permanent and freelance jobs, often known as the ‘gig economy’, is a good thing.

Rather than receiving a salary, workers get paid per job (or ‘gig’) they complete. It is estimated that just under three million people are employed like this in the UK, including delivery drivers, builders, graphic designers and accountants. 

More flexible

Results from the Close Brothers Business Barometer, a survey of over 900 SME owners and senior managers in the UK and Ireland, show that 53 per cent of managers believe that the use of temporary positions and short-term contracts helps their company.

These roles offer benefits for employers, who only need to pay staff when they have work available and therefore do not incur unnecessary costs. They also allow employees to work flexible hours.

Responding to our survey, twenty-eight per cent of senior managers said that they were in favour of this form of labour market because it gives them more flexibility. A further quarter stated that they thought it was positive because it saved their business money.

Controversial practice

This kind of working environment continues to be controversial however, with critics claiming that it offers very little protection for workers. Independent contractors are not afforded basic rights, such as sick pensions, and cannot rely on a regular income. 

Perhaps as a result, nearly two fifths of Business Barometer respondents said that they thought the growth of the ‘gig economy’ was undesirable because it had a negative impact on worker morale.

Now, the government has announced workplace reforms to protect gig economy workers. The new legislation is expected to ensure that workers are told their rights, such as eligibility for paid and sick leave, from their first day. It will also give them the right to request more predictable hours.

David Thomson, Chief Executive of Close Brothers Invoice Finance, commented:

“Flexible working can be beneficial for both employers and employees. When properly embedded, it can provide choice on both sides, help those who need irregular working patterns, and enable businesses to profit from different skills as they need them. For small businesses especially, this form of working can reduce spend and promote growth.

 “However, firms must make ensure that they are protecting the most vulnerable workers. An equilibrium which allows businesses to create smart budgets whilst avoiding ‘one-sided flexibility’ should be found to ensure all staff receive the respect and dignity they deserve.”