Growing companies today face a difficult decision when it comes to expanding their workforce. Should they hire permanent employees, or use flexible outsourced talent in the fast-paced business environment? The conventional way to expand a business or enter new markets is by hiring full-time employees. This traditional approach carries risks, particularly in times of economic uncertainty.
In the first week of this month, we saw that permanent job vacancies declined at their fastest pace since the pandemic. Business confidence also hit a 2-year low as companies reassessed their hiring strategies. KPMG and Recruitment and Employment Confederation’s latest report revealed a steep drop in the demand for permanent employees, the biggest fall since August 2020. These trends, coupled with the rising National Insurance costs and concerns over flatlining growth, could indicate a shift towards flexible workforce solutions.
Understanding Freelance Alternative
Freelancers are a great alternative for many businesses to hiring permanent employees. These skilled professionals work on a project basis, delivering specific outcomes on a payment-for-work-done basis. Freelancers can provide expert services without the need to hire a full-time employee.
Freelance work is simple: You specify project requirements, deliverables and a price. Then, the work is done.
The Cost-Benefit Analysis
Flexible talent has many benefits. The benefits of flexible talent are numerous. Professionals can start working within days, with no financial commitment. This arrangement does not require additional expenses for holidays, sick leave, or benefits. Many freelancers also carry professional indemnity coverage. There are no redundancy charges to be considered when the project is completed.
For long-term success, it is still important to have permanent employees. They gain a thorough understanding of your company, ensure product consistency, maintain service excellence and help to form your future leadership pipeline. Over time, their institutional knowledge will become an invaluable asset.
Making the Strategic Choice
The best solution is often a strategic combination of permanent employees and flexible talent. Your permanent team is a solid foundation that will drive long-term success. Contractors and freelancers can provide specialized expertise and extra capacity as needed.
It is appealing to engage freelancers or contractors because of their financial transparency. The fees are the total price, and there are no hidden costs for taxes, National Insurance, sick leave, holiday pay or pensions.
Implementation considerations
Consider the following factors when evaluating your resource needs. Take into account the project scope and duration, expertise required, budget constraints and long-term strategic importance, knowledge transfer needs and workplace capacity. Freelancers are often a great solution for short-term, specialised projects.
Looking ahead
The ability to scale up resources quickly and flexibly is becoming increasingly important as business environments become more dynamic. Consider how contractors and freelancers can fit into your resource strategy, whether you require support for a project lasting three hours or an initiative lasting three months. Their expertise and cost-effectiveness can give your business the competitive edge it needs to grow.
