Press Release: The rising cost of running a business forces more companies to think flexibly
- Two-thirds (67%) of UK businesses believe offering flexibility is crucial when it comes to competing for people with the most sought-after skills
- Half (49%) of businesses saying they have been operating in ‘a candidate’s market’ – one that favours candidates over companies
- Over half (52%) of businesses have increased salaries but can’t afford to keep raising wages at the rate they have been going
11 January 2023 – Two in three (67%) UK businesses believe offering flexibility to their workers is crucial if they are to successfully retain and attract talent, according to a new report published today.
Businesses realise they cannot compete on salary alone and instead offering flexibility is key to helping companies manage the rising costs of running their businesses. Over half (52%) of businesses have increased salaries to attract talented workers, but say wages rises can’t continue at the rate they have been going.
The second ‘Future World of Work’ report from Sonovate explores what flexibility means to businesses and workers throughout the UK, and how businesses are employing flexibility to remain competitive in what’s been a candidate’s market during 2022. It brings together quantitative research from 4,000 people and 500 small and medium-sized business owners, as well as qualitative interviews with senior thought leaders from the future of work, employment and fintech sectors.
With half (49%) of businesses saying they have been operating in ‘a candidate’s market’ – one that favours candidates over companies – businesses are having to think more creatively about what flexible benefits they can offer to attract, retain and reward their workers. Seven in ten (70%) businesses surveyed say the most skilled people know their worth and will only work under conditions that suit them.
The use of flexibility extends also to retaining the best people already working in permanent positions. Over a third (35%) of businesses report an increase in the proportion of their permanent workforce requesting to switch to contract or temporary roles.
Offering greater flexibility is practical for many businesses from financial and operational, as well as recruitment, perspectives. The report finds that businesses are increasingly turning to different forms of flexibility to attract and retain staff, particularly where it isn’t feasible to compete on salaries in a high inflation, recessionary market. Sonovate’s research reveals that half (52%) of businesses have increased salaries recently but acknowledge that wages can’t continue to rise at the rate they have been going. More than four in ten (43%) businesses have raised wages for talent but say they cannot afford these inflated salaries for long.
The forms of flexible working most favoured by the UK’s businesses include allowing workers to choose their own hours (58%), accepting requests to move from permanent to temporary contracts (58%), and providing employees with utilities and internet subsidies to work from home (also 58%). Other popular options amongst businesses include enabling workers to choose which, or how many, days they work (56%), and enforcing a partial work from home policy (54%).
These broadly tally with the desires and expectations of workers. Sonovate’s research finds that 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.
Richard Prime, Co-Founder & Co-CEO of Sonovate, comments on the findings: “As the cost of living crisis deepens and creates new dynamics and expectations, our understanding of what flexibility means and how it works is fast evolving. Flexibility goes far beyond where and when people work; it encompasses policies that let workers move between permanent and temporary contracts, wider benefit packages for longer-term contractors to match their permanent colleagues, and the right technology to enable flexible working and prompt pay.
“The reality we’re seeing on the ground puts paid to the suggestion that a cost of living crisis or high inflation environment will stem the tide of workers requesting or even demanding greater flexibility from the businesses they work for. The future of work is transforming month to month right in front of us. Macro market events that we might think would hinder the shift to a new world of work are instead accelerating and shaping working habits in fascinating ways.
“For many businesses, 2022 was the year of the candidate’s market; it remains to be seen whether that will continue into 2023. Either way, if 2023 heralds greater growth, lower inflation and more stability, it’ll be fascinating to see how flexibility extends its reach further and forces more businesses to think creatively about how they attract, recruit and retain.”
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Notes to editors:
The second Future World of Work report by Sonovate can be downloaded here: [LINK]
The report includes surveys of 4,500 individuals including 500 UK small and medium sized business owners, as well as qualitative interviews with senior thought leaders from the future of work, employment and fintech sectors. Surveys were commissioned by Sonovate and conducted in November 2022 by Opinium, the independent market research consultancy.
Kitty Guillaume, Karen Lester or Carmen Dixon, Seven Consultancy – [email protected]
Sonovate provides embedded finance and payment solutions for the contingent workforce, serving recruitment businesses, consultancies and labour marketplaces that engage contractors and freelancers across the world. Its global API-driven technology platform takes the hassle out of managing contract and freelance worker placement and pay. It enables companies to get back to growing their businesses, confident that funds are in place to help meet payment deadlines.
Since it began funding organisations in 2014, Sonovate has lent over £3 billion to more than 3,300 businesses in 40 countries to ensure over 30,000 people are paid in full and on time for the services they provide.