Quarter of small businesses have employed casual workers

More than a quarter of small and medium-sized businesses (SME) in the UK have hired at least one short-term casual worker in the last year.

These findings have come from the latest Zurich SME Risk Index, just ahead of the deadline for evidence to be submitted for the Taylor Review - a regional tour to assess and consider the implications of new forms of work on worker rights and responsibilities. It will also take into account employer freedoms and obligations.

The self-employed now make up 15% of the UK’s labour market. In addition to this, there has been a rise in the number of people doing ‘gig economy’ work. Defined as short-term, casual work that is increasingly sought by people as and when they want to work, roles can include driving, delivering items and DIY tasks.

10% of businesses reported that gig economy workers make up 90% or more of their workforce, while 41% said they form at least a quarter of their staff. Many of the employers of gig economy workers stressed the need for and importance of flexible working hours, with 70% saying that this type of employee played a vital role in their company’s profitability.

The survey demonstrated that although SME employers are aware of the risks for workers, with 52% agreeing that the work lacks security, 58% thought the gig economy provided flexibility for workers. Considering the gig economy’s working practices from an employee’s perspective, 34% said it provided new opportunities and 28% believe it to be time efficient.

A previous survey by website Glassdoor revealed that the most significant draw of the gig economy is flexibility, with 35% of respondents saying that this would be the biggest incentive for them to work freelance or on a very short contract. 11% said that the greatest perk was the better work-life balance, 10% said that it was the fact that you could be your own boss.

Exploring the risks that gig economy work might include, only 27% agreed it could be exploitative and 20% that it can be unfair to workers.

Paul Tombs, head of SME proposition at Zurich, commented: “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.

“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.”

Alongside the potential dangers of unethical working conditions for gig economy workers, businesses themselves can experience some negative factors. 40% of those surveyed were concerned that the gig economy could create a less dedicated workforce, while 30% acknowledged that it can also generate a less driven one.

“While politicians and the media voice concerns that gig economy work is about maximising profits and manipulating staff when we speak to business owners, it is clear that the majority associate it with flexibility and opportunity,” added Tombs.

This view appears to be reflected in Zurich’s statistics; 57% stated the work was flexible for business, with 38% believing it encouraged better management of workforce capacity.

He concluded: “If the gig economy has sprung up as an imperfect solution to the increasing demand for flexible work, then a review of the system should focus on reforms that maximise the benefits for all parties rather than descending into a blame game.”

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Date published 18 May 2017 | Last updated 18 May 2017