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Can a business really run on zero employees?

·4-min read

For most, the concept of any business operating without employees is radical. It might even sound impossible. But it’s a model that many enterprises (and professionals) are tapping into — and it’s working.

Brexit and covid have presented unknown territory for most UK businesses. Despite what’s been arguably the hardest period of trading in living memory, the effects of both combined made way for a new breed of company: the ‘ultra-skinny business’.

Some businesses may choose to run on a small team of employees alongside a strong network of regular freelancers. Others with freelancers alone. But some 74 per cent of SMEs say they recognise the benefits of external talent. And the pool’s wide.

The UK now boasts around 2.2 million freelancers, and that number is rising. What’s more, with McKinsey predicting around 50 per cent of the workforce will be operating remotely by 2027 — a decision driven by the workforce, not by leadership — one thing is clear: employees and self-employed pros are running the show.

So, why the change, and why so rapid?

Advances in tech that sparked during the first throes of the pandemic, with the explosion of Zoom for example, have now meant that hiring or becoming a freelancer doesn’t require the costly infrastructure it used to. Nor is it an unusual or ‘out-of-the-box’ career path.

Professionals saw the opportunity for a different way of climbing the career ladder. The work-life balance many employers touted was too often far from reality, and advocating for a better one resulted in many turning to freelance.

Suffice to say that covid dried up many businesses’ revenue streams in a mere matter of days, meaning mass furloughs and lay-offs occurred at an alarming rate. It was suddenly obvious how precarious the ‘traditional’ model was for businesses, and the cost (both financial and emotional) of scaling a business down was a reality many employers didn’t want to repeat.

It’s also a high demand, low supply market. Businesses are looking for more diverse talent to accommodate more diverse requirements — AI, blockchain, cyber security, complex marketing functions. But tapping into that market means making significant changes. For the first time, UK businesses must follow the wants of the workforce if they want to gain access to the right skillsets.

The ‘ultra-skinny’ model is also a strong opportunity for founders wanting to get their business off the ground with efficient use of capital. Outsourcing accountants, IT pros, sales and marketing support and more makes for more speedy infrastructure, and greater accessibility to global markets. Same goes for businesses looking to expand their regions without local offices.

There are still cons.

Deploying freelancers in any broad spectrum will mean a complete re-think of structure. Any good business has a specific way of providing a service or product, and retaining that unique brand approach is, admittedly, more challenging without permanent employees. Consistency in the end result becomes both more important and more challenging, and agreeing things like working hours won’t always be a given.

For freelancers, the most notable con is financial. I’m talking pension, benefits, annual leave and everything in between. Of the businesses which use freelance labour, 44 per cent admitted to not paying their invoice until the last day it’s due. And according to new research, many self-employed Brits have over £2,000 in unpaid invoices every month.

All of that being said, security for businesses and individuals is much the same in my books. I’m cautious to say that having permanent employees or being in permanent employment is the ‘safer’ option — you only need to look to The Great Resignation or pandemic job losses.

Do I see permanent employment becoming obsolete? No, but what I do see is the number of businesses opting for a zero or limited employee model rising to coincide with the increasing pool of freelancer talent.

Deploying freelancers as an extension of operations can create a lean and agile model, leverage a vast pool of specialists and experts, and keep overhead costs down, all without sacrificing customer requirements or satisfaction. The firms embracing the opportunity to rollout a diverse, global workforce will arguably be the ones that operate most efficiently.

Beyond the next five years, the ‘ultra-skinny’ model may well be one we see used across the majority of businesses.

So yes: it’s possible, and it’s already happening.

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