SMEs engaging freelancers to cut expenses

Freelancer

Australia’s SMEs are increasingly turning to short-term freelancers in a bid to reduce their overheads, according to MYOB.

As part of its SME Snapshot for November, the cloud accounting provider surveyed 395 SMEs about the freelancing economy. Of the SMEs that had used a freelancer in the last six months, a majority (89%) indicated they are likely to do so again.

According to MYOB CEO Tim Reed, businesses have become more comfortable with a different approach to talent acquisition due to the “changing shape” of Australia’s workforce together with the rise of sharing economy platforms that make it possible to engage workers, representing a broad range of skills, from around the world.

“By taking advantage of freelancers, including remote workers, businesses owners can free themselves up to look for new opportunities for business growth, without sacrificing business profitability, customer service or losing peace of mind that important tasks aren’t being looked after,” he said.

“As indicated by an Upwork study, freelancers make up a third of the Australian workforce and has rapidly grown over the last decade. As small businesses become more tech-savvy and have easier access to freelancers, we expect that SME owners will continue to take advantage of this trend.”

While SMEs are most likely to source freelancers through recommendations from other small business owners (46%) and friends and family (44%), freelancer marketplaces are growing in influence, with 15% of small business owners stating they have found a freelancer through apps or websites such as Freelancer.com and AirTasker.

“Business owners are benefitting from the flexibility these resources can provide them, enabling them to scale when needed,” Reed said. “This trend will continue as small businesses continue to do more things online and digitally transform.”

Other key findings from the SME snapshot survey included:

  • Business owners aged under 40 are the most open to engaging freelancers, with 74% stating they would consider usinga freelancer for specialised help with a task or project, compared with only 40% of business owners over 40.
  • SMEs identified greater flexibility for seasonal businesses (47%) and access to different skillsets (41%) as the main advantages of hiring freelancers. Meanwhile, the cost of employing full-time staff was also a consideration, with 21% of respondents stating one of the benefits of freelancers is that they are cheaper
  • The key disadvantages were perceived by SMEs to be freelancers not understanding their business (26%) and complex payment processes (10%).
  • Businesses generating over $2 million in revenue are the most likely to engage freelancers – 20% had used a freelancer in the last month, compared with 14% of SMEs with revenue between $75,000 and $500,000.
  • The SMEs in Victoria and NSW are leading the way when it comes to freelancer engagement (17%) compared to Tasmania (0%) and WA (9%).
  • Manufacturing and wholesale trade sector was most likely to engage with freelancers (23%), followed by finance, property service (16%) and retail & hospitality, tied with construction (11%).