55% of businesses make use of the contract workforce
Based on a survey of over 4,500 people, Sonovate’s Future World of Work report reveals that freelance and contract work is on the rise post-pandemic, but 31% of SMEs routinely pay them late; with more than half of those freelancers and contractors stating that late payments impact their ability to pay their bills on time.
While small and medium sized SME owners are keen to attract contractor workers to address skills gaps failing to pay them on time could lead to them missing out on talent opportunities.
The survey revealed that 74% of SMEs said they see the benefits of hiring freelance or contract workers for specialist support over having to invest in a permanent workforce.
Over 40% of SMEs that use freelance labour admitted they often wait until the last day the payment is due before paying contractors. However, this isn’t necessarily the business owners’ fault with half (50%) saying that late payments from clients or customers impact their ability to pay their workforce on time.
Sonovate’s research shows that over half (55%) of SMEs that use freelance labour have witnessed a sharp increase in the number of people looking for temporary or contract work since the start of the pandemic with nearly four in ten workers (36%) saying they would like to move to a more flexible way of working but are worried about the uncertainty of pay. Over half (56%) said they would only work for a company which had a track record of paying wages on time and 64% think the Government needs to do more to enforce the prompt payment of invoices. Almost half of freelancers (48%) refuse to continue to work with businesses that are late to pay them.
Richard Prime, co-founder and co-CEO at Sonovate, commented: “The Report shows us that freelance and contract workers have spiked in popularity since the start of the pandemic, with the crisis opening our eyes to new ways of working.”