Contractor productivity worth £5,000 per employee

Contractor productivity worth £5,000 per employee

14 September 2020

A new report into contractor productivity has found that firms with at least 11% of their workforce as contractors are more productive, with each employee generating an extra £4,669 for their organisation on average.

Researchers from the Trinity Business School and the University of Derby said the results showed the important role that contractors can play in the UK’s recovery.

According to the research, firms hiring freelancers and contractors above the 11% threshold created 914,400 new jobs. This equates to 1.2 additional new roles per firm.

Professor Andrew Burke from Trinity Business School, who has produced extensive research on the freelance workforce, said the - against much perceived wisdom - research shows that independent workers aid growth and can help create more permanent employees.

“People normally associate the use of freelancers with employment destruction as they are perceived as doing work that otherwise could have been done by employees. This view overlooks a different type of freelancer who works in sync with employees but brings expertise and innovation not available within firms and on a swift basis, thereby enabling these businesses to innovate, grow faster and ultimately create more employee jobs,” he said.

The University of Derby’s Marc Cowling added: “Our research was the first to debunk the view that freelancers are cheap, low value workers who cause job losses by replacing core employees. Rather we found they add specialist skills and expertise that create value and profit and allow firms to increase their core workforce as they accelerate their growth.”

Miles Grady, Director of Umbrella.co.uk, said: “Freelancers and contractors will play an important role in getting the UK back to business. Many firms continue to hold a dim and outdated view of contractors - that they destroy jobs or only do low value work.

“This research shows that the opposite is true. Companies using a significant proportion of contractors can grow their workforce and increase their revenue, particularly during times of economic uncertainty.”

Umbrella.co.uk supports freelancers, contractors and agencies with payroll and accounting services. For more information, speak to a member of the team. Call: 0800 121 6513.