Tag: Freelancer

Late payments from suppliers and payroll system issues cited as reasons for delays

Despite contract work being on the rise since the pandemic, freelancers often wait three times longer to get paid than full-time staff who earn a monthly salary. Research shows that this is due to firms struggling with cash flow and payroll issues.

The survey, conducted by embedded finance and payment solutions provider, Sonovate, showed that 53% of all small and medium-sized businesses (SMEs) use contractors. However, this number increased to 81% when looking only at medium-sized businesses.

More than a quarter (27%) of SMEs said it takes them over 90 days to pay their contract staff. This figure increases to 37% among medium-sized businesses (50 to 249 employees), even though they are expected to have more predictable cash flow and should be able to make more timeous payments.

Five hundred senior business decision makers were surveyed, and it was discovered that 28% cited cash flow as one of the main reasons for slow payments (rising to 33% among mid-sized enterprises). It was also found that 62% believed that these cashflow issues were caused by the knock-on effect of late payments from their suppliers and customers. Twenty-eight percent said that issues with payroll systems stopped them from paying contract workers on time.

Regardless of the clear need for good contractors, 39% agreed that failure to pay timeously might result in missing out on quality talent. A further 24% admitted they had lost contract workers as they couldn’t pay them on time.

Richard Prime, co-founder and co-CEO at Sonovate, said: “Despite the last few years accelerating the number of workers going freelance or contracting, they are consistently being paid late which is not sustainable for many people –  particularly at the moment.”

“We know that contract workers are the future of the UK’s workforce, but with the cost-of-living crisis front of mind, 90 days is just absurdly long to wait for payment. Against the backdrop of this crisis, it is paramount that businesses have access to solutions that support them to offer fairer and swifter payment across the workforce supply chain.”

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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.” 

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Businesses turned to freelancers most often for help with technology, digital marketing and design tasks over the past year, according to new research.

A survey of 15,000 freelancers by freelance jobs marketplace PeoplePerHour found freelancers across these three areas had been most in demand during the past 12 months. More specifically, web development, content writing and graphic design topped the list of tasks outsourced during the pandemic.

Xenios Thrasyvoulou, Founder and CEO of PeoplePerHour, said: “During the past 12 months, every aspect of normal life has changed, from how you do your shopping, to how you run your business.

“Many businesses have had to adapt and move online requiring specific skills and competencies at a given point in time, which makes using freelancers particularly attractive for many companies.”

In particular, the research found that many businesses had set up websites or ecommerce marketplaces for the first time over the past year, leading to web development, app development and coding skills becoming even more in demand than they were previously.

Companies had also increased their use of digital channels over the past year, seeking help from freelancers to write content and manage social media campaigns.

Graphic designers were also in high demand as businesses looked to boost their online presence with new logos, online brochures, posters and other creative material.

And due to the shift to home working and the downturn in some industries, some businesses had either cut back on staff or placed them on furlough, so turned to freelancers for business support such as sales or virtual assistance.

Thrasyvoulou said the strong demand for freelancers was especially welcome as many had been badly affected by the pandemic. “Small businesses and the self-employed have been some of the hardest-hit sectors, with less government support than those who are in full-time employment.”

Photo courtesy of Canva.com

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