UK skills gap is costing SMEs £5.5 billion, but the average annual salary for skilled staff in a tech start-up is £415,000.
Across the UK, the number of new companies registered last year rose by 5.7% to over 660,000 – a record high. Of these, high growth firms created about half of all new jobs across the UK. As with any knowledge intensive sector, the vital requirement for highly–skilled employees is unabating, but often comes with a salary price tag that is simply not feasible for SMEs in their early stages of growth. With the majority of the UK’s high growth sectors delivering technological advancements at record pace, the requirement for a workforce that reflects this speed is one of the most challenging setbacks for SMEs functioning within this arena – with 80% citing lack of skilled workers as their biggest problem.
The wage-bill: Unaffordable
When looking at the average salaries and bonuses of Intellectual Property Managers, IT Directors, Chief Information Security Offices, Chief Marketing Officers and Financial Directors, it was found that businesses would need to pay £415,000 a year just for these five roles.
Many businesses need this talent, but do not require them on a full-time basis. Flexible working and freelance contracts allows SMEs to hire these highly–skilled employees only for the time they are needed whether that be in daily, weekly or monthly timeframes.
ETZ Payments is able to provide case studies of growing new businesses that rely on freelance contract workers in order to maintain their company’s productivity whilst staying financially afloat.
Nick Woodward, CEO of ETZ Payments, provides the following commentary:
“The vast majority of businesses require some key and highly–skilled staff members in order to run effectively. However, many emerging companies simply cannot afford to pay these workers on a full-time basis. By utilising the gig economy and paying these employees on a freelance basis, businesses allow themselves to continue growing whilst receiving vital high-skilled services. This structure also proves to be extremely lucrative for the freelance community, who in many cases are able to acquire multiple clients according to their increased availability.”
The self-employed/freelance sector is growing considerably in the UK and other western countries. According to Statista, it is projected that in 2027, 86.5 million people will be freelancing in the United States and will make up 50.9 percent of the total U.S. workforce.
This explains how the gig economy is growing so much. In a gig economy setup, temporary, flexible jobs are the choice of election and companies tend toward hiring independent contractors and freelancers instead of full-time employees. A gig economy is radically different from the traditional economy of full-time workers who rarely change positions and instead focus on a lifetime career. It has its positives and negatives. On one hand the safety net of a full time job isn’t there, but for people looking for more flexibility in their work and more open to new job opportunities and even career changes, it can work as a great choice. The gig economy can also work as an alternative for SMEs and startups, as it provides these with the opportunity to hire work with skilled freelancers in a more flexible and open set up, with less fixed costs.
Founder Dinis Guarda
IntelligentHQ Your New Business Network.
IntelligentHQ is a Business network and an expert source for finance, capital markets and intelligence for thousands of global business professionals, startups, and companies.
We exist at the point of intersection between technology, social media, finance and innovation.
IntelligentHQ leverages innovation and scale of social digital technology, analytics, news and distribution to create an unparalleled, full digital medium and social business network spectrum.
IntelligentHQ is working hard, to become a trusted, and indispensable source of business news and analytics, within financial services and its associated supply chains and ecosystems.