If you’re like most small and medium-sized business (SME) owners we work with here at Tax Agility, chances are that when you’re not looking for ways to increase your business’s revenue, you’re looking for ways to reduce your costs.
This is completely normal, but unfortunately there aren’t a wealth of areas in which cost savings can be made without a reduction in quality, with the cost of materials, rent, and bills (such as water and electricity) allowing little room for negotiation.
Despite this, one area in which you can make considerable savings is when hiring short-term contractors to complete advanced tasks, especially if these tasks require an extremely specialist set of skills. Contrary to popular belief, hiring short-term contractors can provide huge cost savings for SMEs compared to the cost of hiring somebody in this position on a full or part-time basis.
Cheaper, Faster Workforce
Recent research conducted by freelance marketplace PeoplePerHour (PPH) discovered that when it comes to areas requiring extremely specialist skills, hiring a contractor can be up to 75 percent cheaper compared to bringing somebody in full or part-time to complete the same tasks.
With the current digital (online) shift requiring even very small businesses to have an online presence nowadays, this increase in freelance contractors working in these specialist niche subcategories creates much improved market efficiencies for small and medium-sized business (SME) owners, while reducing the cost of labour, the time needed to complete a project (typically by 33%), and creating higher quality output
In the report, PPH note that “Over the course of the last several years we have observed a trend where-by traditional specialist occupations have been becoming increasingly more refined and highly niche subcategories of traditional roles.”
This trend towards freelance contractors working under more refined niche subcategories, is backed up with data suggesting that, between 2007-2015, there was a:
- 38 x increase for freelance web and mobile development workers,
- 20 x increase for freelance designers,
- 14 x increase for freelance copywriters.
This is particularly encouraging for SME owners because your business won’t consistently require these (and other) specialist skills, therefore it makes sense to hire somebody in to perform these skills when necessary to ramp up (and eventually down) your work force, instead of keeping them on payroll at all times.
More Opportunities for Contractors
All of this points to more and greater opportunities for contractors, from small and larger businesses alike. If you currently work as a contractor, especially if you’re working in an extremely specific niche, now is the time to establish yourself in your field.
With the same research noting that half of the UK workforce could potentially be self-employed (or rather, engaging in some form of self employment) by 2020, it’s essential that you set down roots in your field of expertise and legally establishing your business by registering with HM Revenue and Customs (HMRC) and hiring an accountant to deal with your financials as soon as possible.
Looking To Reduce SME Costs?
To speak with a professional accountant to discuss how we can ensure your finances are always up to date and in order, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.