Written by: Keith Tully
Published: 17th May 2017
As many as one in four SMEs throughout the UK are reliant to some extent on the services of ‘gig economy’ workers, according to new research on the subject.
Gig economy workers are generally taken as being individuals who provide services as freelancers or on the basis of short-term contracts.
According to the insurance giant Zurich’s latest SME Risk Index, the use of gig economy workers is now commonplace among the UK’s SMEs, with 70 per cent of decision makers who use their services suggesting that they are important to their company’s profitability.
The research behind the index involved surveying around a thousand British SME bosses, with one in 10 of those who said they use gig economy service providers suggesting that those people make up as much as 90 per cent of their entire workforce.
Meanwhile, a total of 41 per cent of the SME employers who said they use gig economy staff indicated that freelancers and short-term contractors make up at least a quarter of their overall workforce.
A majority of the people polled by Zurich as part of its research said that they felt the dynamics of the gig economy offer flexibility for workers, although most also indicated that they recognise a lack of security for the service providers involved is a potential problem for them.
Another potential downside risk highlighted by the SME bosses canvassed was that gig economy workers might lack the levels of motivation and dedication of full-time company employees.
“With so many UK SMEs employing gig economy workers, it would be a mistake to characterise the entire gig economy as an exploitative tool that only benefits employers,” says Paul Tombs, head of SME proposition at Zurich.
“Self-employment is on the rise and demonstrates an increasing demand for flexible work which is beginning to shape the way that businesses think about workforce management.”
Issues relating to the growth of self-employment in the UK have made headlines in recent months with MPs having been scrutinising the practices of fast-growing service providers such as Deliveroo and Uber who rely heavily on gig economy staff who work extensively on their behalf but who they do not technically employ.