Small businesses not worried about cost of sacking staff, putting them at odds with Vince Cable | LabourBlawg

Small businesses not worried about cost of sacking staff, putting them at odds with Vince Cable

by Employment Blawg on September 14, 2012

The following is a guest post regarding the potential impact of new employment law proposals on small businesses in the UK.

A new report of 1600* UK small businesses released today reveals that 60% say that they would rather hire a freelancer than a new member of staff as they are more flexible and bring key skills as and when the business needs them.

The NOP survey also found that only 12 % of respondents worried about the cost of getting rid of new employees if things go wrong with the business or the employee doesn’t perform.

The survey released by, the world’s largest online outsourcing marketplace, puts small businesses at odds with Business Secretary Vince Cable, who announced today new measures to cut compensation for sacking employees and voluntary agreements to avoid tribunals.

The survey revealed that small businesses are already adopting flexible employment arrangements, keeping costs low by hiring skilled freelancers, and showing that small businesses are more innovative and faster moving than Government attempts to help them out.

The small business survey also found that 40% of small businesses said for the same money they’d spend on one employee, they could hire a range of freelancers with different skills.

More than 60% also disagreed with the Government’s assumption in their consultation on changes to employment law that small business were put off hiring their first employee by the burdens associated with employing someone. The respondents claimed that this was an outdated concept as most were now employing consultants and freelancers rather than full time employees.

50% of small businesses stated that they were more likely to increase their capacity to grow by using a range of skilled freelancers compared with only 11% that stated their capacity to grow would be increased by recruiting employees.

According to Matt Barrie, CEO of, the survey shows that small businesses are ahead of the Government in employment innovations.

“Government is playing catch up as small businesses change the ways they employ workers to suit their needs now not waiting for the Government to act. While the Government changes are welcome, small businesses see these changes as well past their sell by date. Most small businesses are already employing consultants and skilled freelancers as and when they need them rather than worrying about hiring and firing employees,” said Matt Barrie, CEO of

“The survey found that small businesses get more for their money if they hire a range of skilled freelancers than one or two employees. The Government hasn’t yet accepted the fact that even small businesses are outsourcing today just like larger companies in the UK. As the most recent Labour Market Statistics showed, there are more freelancer self employed people in the UK than ever before – now more than 4 million – and they are working for small businesses up and down the country,” he said.

“UK businesses are using sites like to carry out business across the world, undertaking data research, marketing, programming and rebranding. We have seen 300% growth and it doesn’t look like stopping.”

Editors’ notes

Webby award-winning is the largest outsourcing marketplace in the world. Through, businesses connect with independent service providers and freelancers. connects more than three millions professionals from all over the world. Through our website, employers can hire freelancers to do work in areas such as software, writing, data entry and design right through to engineering and the sciences, sales & marketing and accounting & legal services. Jobs start at £20, and the average job is under £150, making extremely cost effective for small businesses and entrepreneurs, which often need a wide variety of jobs to be done, but cannot justify the expense of hiring full time.


*1600 small businesses responded to an NOP survey undertaken across the United Kingdom, completed 12th September 2012.

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