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IT contractors could benefit if SMEs outsource

IT contractors could benefit if SMEs outsource

Advice website has predicted that small businesses could increasingly outsource some of their workloads this year and this could benefit umbrella company contractors.

Small enterprises could find exchanging services and outsourcing a cost-effective way of avoiding the burden of legislation surrounding the employment of new staff. Red tape makes recruiting a major headache for business owners, said website deputy editor, Rebecca Burn-Callander.

Businesses need a certain amount of staff to function but the likelihood is that SMEs will outsource or use independent contractors this year rather than increase the HR administrative burden that comes with hiring full-time employees, she continued. Businesses are also likely to cut operating costs by collaborating and exchanging services with other companies, she added.

The HR burden is definitely weighing the majority of SMEs down. 72% of SME managing directors think they are spending too much time on issues relating to HR. 66% cite redundancy as their primary HR concern and 61% are worried that their organisation will lose talented people.

The red tape surrounding employee law is seen as a major concern by 88% of SMEs whilst 63% claim to have difficulty with pay and benefits regulations.

SMEs currently account for around 60% of private sector employment and these findings could cause concern for David Cameron who is keen to see small businesses grow and create extra job opportunities.

Meanwhile, the BCC and the CBI have started lobbying the coalition to make reforms to the employment tribunal system.

There has been a growing trend of late for employees to make spurious claims and business groups have now suggested that claimants should pay a refundable deposit or fee when they make a claim. This could act as a deterrent to those who bring cases which have little merit.

The government is due to launch a consultation into reforming the employment tribunal system later this month.

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