Hybrid And Beyond: Is “Flexible Working” Helping Britain’s SMEs To Deal With Wage Pressures?

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It sounds like a straightforward and wholly logical proposition. The United Kingdom is facing a shortfall in labor. Even against a backdrop of static or negative growth, there are around one million unfilled vacancies in the economy and with demand outstripping supply, wages are rising. Small businesses are reluctant to get into a salary bidding war against their larger and often better-resourced competitors so they are looking for alternative ways and means to attract and retain people.

And one way to do that is to offer something valuable that doesn’t automatically translate into higher staffing costs. But what exactly?

One answer seems to be a greater degree of workplace

flexibility. And according to a survey titled The Future World of Work, that’s exactly what significant numbers of SMEs are doing. But what does flexibility mean in practice? does it really make a difference to the ability of small firms to hire the people they need?

The survey was commissioned by Sonovate, a company that provides a technology solution for recruitment agencies and consultancies that place contingent workers with clients. Essentially, the company offers invoice finance. If a recruitment agency places a number of freelance workers with a third-party company, Sonovate will cover the cost of the freelancer’s wages as soon as an invoice is raised. This benefits the recruitment agency’s cashflow position and possibly also means the freelancers will get paid more quickly.

So as Chief People Officer Elise Lockyer explains, the company commissioned its survey – taking submissions from 500 SMEs and 4,000 workers in order to understand where the world of work is heading.

So what has has the survey uncovered? Well, some of the findings are perhaps not surprising. 49% of responding businesses say they are having to be more creative about how they attract and retain staff and almost three-quarters (70%) say they face a situation where candidates will only take jobs if the conditions suit them.

Money clearly plays a big part in determining whether a job is deemed suitable by a candidate and 43% of employers have raised wages. Others, however, say wage rises are unaffordable in the long term, so instead they are seeking to bring people on board by looking again at working practices.

But here’s where things begin to get complicated. As you might expect, more than half of employers are offering hybrid working, something that ties in neatly with the post-covid realization on the part of employees that working from home for a certain number of days every week represents a very attractive prospect. A majority of employers who do this are offering internet subsidies.

A Switch To Temporary?

All well and good, but according to the data, the number of permanent employees asking to switch to temporary roles is on the rise.

I put it to Elise Lockyer that this seems counterintuitive. At a time when employees face higher interest rates (including on mortgages), rising rents and steep hikes in the wider cost of living, why would individuals ask to swap permanent roles for something more precarious?

“What we have seen is that you have to manage employees as individuals,” she says. “Some people look around and they see that businesses are making their workers redundant. They may feel the flexible working route offers more control over their own destiny.”

So rather than being staying on a permanent contract for one employer, a different approach would be to adopt a portfolio model. Perhaps, working freelance for two or more employers over the space of a week or a month. “They get paid without committing full-time to a business. With gig and portfolio work available, there is a chance to work for multiple businesses,” says Lockyer.

What Do Workers Want?

It’s easy to see the benefits for some employers. For instance, Lockyer says Sonovate has recently employed someone to do specific tasks on two days a week. The necessary work gets done, without the company having to pay for time it isn’t really using.

But is this really what workers want? Well, they may have reasons. If someone wants to run their own business, working for an employer two days a week and spending the rest of their time launching the venture could make perfect sense. Or if a worker is highly paid and boasts an array of in-demand skills, then working for a number of employers either in sequence or simultaneously could make financial sense while also providing a way to add experience to a resume. Conceivably, having several employers could also offer more security than putting your eggs in one basket. Or it could simply be that an individual wants to work for just a couple of days a week.

The research does suggest there is demand for a range of working options, albeit from people who are already working freelance. For instance, 30% of freelance workers want to choose their own hours, as well as how many and which days they work. Three in ten (27%) want to be able to work part time if they wish to, and 25% are keen to work from home when they want to.

But it really will depend on the individual and the circumstances. Lower-paid workers on short-term contracts might simply feel exploited rather than enjoying the benefits of flexibility.

Meanwhile, small businesses – many of which are proud of their cultures – may struggle to motivate teams comprised of individuals with very different contracts and working hours. Lockyer says this is something companies should take very seriously. “You have to know your values and behaviors and embed those into the business, regardless of whether staff are working part-time or full-time,” she says.

Lockyer says the world of work will continue to change. That’s probably true and it is also likely that increasing numbers of workers will seek more flexibility. The question is whether the flexible practices on offer can be made to work for both the business and its employees.



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