Firms in London are increasingly reliant on contract or freelance workers, as 75% of small and medium sized businesses report an increase in the proportion of temporary workers, compared to 67% of firms across the UK which have seen a similar trend, according to research from Sonovate.

At the same time, over half, or 56%, of small and medium sized businesses in London have seen an increase in permanent staff requesting to move to contract roles in the years following the pandemic, higher than the UK average of 35%.

Meanwhile, 29% of London businesses say they are more cautious about recruiting permanent staff, compared to 22% across the UK. 

Sonovate also found that businesses in London are more focused on the benefits of contract or freelance workers as 73% say contractors and freelancers contribute to a positive company culture, higher than the UK average 66%.

Similarly, 67% of London firms believe offering flexibility to workers helps the business attract and retain talent, higher than the 55% UK average.

Richard Prime, co-CEO of Sonovate, said, “Rising living costs are forcing people to reassess how they work and how they can maximise their income, for an increasing number, this means moving to freelance or contract work so they can have more control over their finances. For Londoners facing the highest costs in the UK, from commuting and housing prices to nursery fees and the soaring cost of leisure activities, having this control is essential during the cost of living crisis.”