Freelancers and small business


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This presentation poses the question has the time come for freelamvers to play a bigger and more formal role in small businesses.

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Freelancers and small business

  1. 1. Freelancers and small business Has the time now come?
  2. 2. “ all the forces in the world are not so powerful as an idea whose time has come” Victor Hugo 1802-1862
  3. 3. Handy’s Shamrock Organisation Charles Handy in his book “the age of unreason” (1981) Proposed the idea of the shamrock organisation as the way businesses would organise in the future. It’s been a long time coming, but is now the time?
  4. 4. The growth in self employment Inexorable rise this century, Now 4.4 million in the UK (over 14% of workforce) Predicted to rise to 17%+ by 2020 Growth driven by professionals (35.2%) and managers(14.8%). 75% of self employed now skilled workers.
  5. 5. Paralleled by growth in home based workers Nearly 60% of self employed are now home based Growth similar to that of self employed Technology has made home working for professionals a viable option.
  6. 6. The disruptive forces in the labour market
  7. 7. Five disruptive forces There are some very strong forces acting on the labour market causing it to disrupt. These are each covered in turn subsequently.
  8. 8. 1.The recession Major “push factor” Total number of available jobs reduced Older people lost jobs and youth and graduate unemployment increased People looked elsewhere for jobs: Freelancing/Own businesses Large variety of self employed types: Subcontractors Self employed consultants Temps Interims “solopreneurs”
  9. 9. 2.The internet The rise of communication and cloud technologies has irrevocably broken the link between work and workplaces. Enabled flexible business models. The rapid increase in jobs in the digital economy. It is estimated that 4 out of 5 new jobs are now predominantly digital. These are largely location independent. The establishment of a number of internet based online markets aimed at matching skills with employers. Some examples are summarised on the next slide:
  10. 10. Online markets: Examples
  11. 11. 3.The millennials Born between1981 and 2000. They are already born! (aged 14-33 today!) Estimated that they will form 50% of the workforce by 2020 Digital natives, always connected generation Very different value set: reject 9-5 working, value freedom, no company loyalty. Freelancing/independent/DIY careers- fit on with their aspirations (see graphic on next slide for a summary of millennials characteristics)
  12. 12. Millennial characteristics (source)
  13. 13. 4.1 Growth of small business 4.9 million SME’s (<250 employees) compose 99% of businesses in the UK and Micro businesses, 4.6 million (<10% employees) 96%. They also account for 60% of total employment and 50% of GDP These numbers are growing by over 2% per annum source :House of Commons June2014
  14. 14. 4.2 Growth of Small Businesses Historically SMB’s seen as sub-contractors to big businesses or serving small markets. Bottom of the food chain. Now seen as key driving force in the economy leading in innovation and competitiveness. Greater status and rewards, allied to the greater freedom, makes this sector increasingly attractive to the brightest and best talent Universities are now teaching entrepreneurship and promoting this alongside traditional careers in the professions and corporations.
  15. 15. 5.Importance of flexibility and agility Increased understanding from companies that they need an agile and flexible workforce to be able to compete in the highly competitive global marketplace Employers now recognise the necessity of having an “on demand” workforce. Pressure from employers for a new flexible employment models are therefore to supplement traditional career based models. This is particularly the case for small businesses that operate in highly innovative areas where skills sets are often scarce and rapidly changing ( see next slide)
  16. 16. Increasing skills specialisation This is a useful exemplar of how skills sets are developing and fragmenting rapidly in some leading edge areas
  17. 17. Are Freelancers right (or not) for small businesses?
  18. 18. Three employment models for small businesses All of the models have different advantages and benefits
  19. 19. So which one is best? Ultimately each small business is in an unique position and a different answer is right Freelancers can offer some key benefits: Access to wide range of scarce skills on an “on demand” basis Comparatively low cost ( no overheads or utilisation risk) Can become intimately coupled into the business There are a number of significant drawbacks: You have to manage them on a strategic and day to day basis! Dependent on a individual who can leave.
  20. 20. So has the time come?
  21. 21. The forces now seem aligned supply Demand The recession has caused many people to seek alternative jobs Millennials have very different expectations and needs in respect of work. Technology exists which facilitates new employment models The vital importance of small business in the modern economy The need for flexibility and agility to compete The attractions of “ on demand” skills in a fragmenting skills environment.
  22. 22. So has the time come for handy’s vision of the Shamrock Organisation to come about? To return to Victor Hugo’s proposition..... .....just maybe it now has!
  23. 23. Resources
  24. 24. Further information Long form article: Time-Come-for-Freelancers-and-Small-Businesses Curation of recent literature: business?r=0.09557429942860507#post_40239607 86
  25. 25. contact website: Email: Slideshare: LinkedIn G+ Twitter @mastersassoc