The Freelance Market: What do SMEs need to know when hiring freelancers?


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The Freelance Market: What do SMEs need to know when hiring freelancers?

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Freelancers are self-employed individuals who have a particular skill or service that they can offer to businesses. From graphic designers, to software engineers, freelancers are hired on a temporary basis by businesses to help with workload and expertise that they may not have capacity, or the ability to complete in-house.

With the number of self-employed workers in the UK rising by 14% in the past 20 years, it's clear that the freelance sector is thriving and is a space that business owners need to leverage. However, as the demand for freelancers grows, the ability for SMEs to effectively find, and hire, good talent becomes more competitive and it is essential that business owners know how to navigate this.

Over half of business owners are likely to use a freelancer to help their business grow

To gain a deeper understanding of whether freelancers are used by SMEs, we asked small business owners across the UK about their outsourcing habits. Nearly half of respondents, 47%, said they had used a freelancer and 65% claim they are likely to use one to help grow their business. But what skills are they most likely to use a freelancer for?

IN BODY IMAGE | in-demand freelancers

Whilst these skills are most likely to be hired by SMEs, we wanted to look at which ones currently have the highest demand in terms of search traffic, and open jobs. We scraped freelance site Upwork and found SMEs are currently seeking freelance developers the most - 243 job openings were advertised. This compares to the job with the least amount of live ads on Upwork, data analysts, where just five jobs were advertised by employers across the UK.

Whilst there are disparities in how many job openings there currently are for various skills, the demand for each one is always high and some lend themselves to freelancing more than others. For example, developers are required by SMEs periodically, and in the initial stages of a start up, so the job is more likely to be advertised on sites such as Upwork.

The discrepancies in demand do however suggest that before SMEs advertise for a role, they should consider how many businesses are also seeking a freelancer for the same job, as this could impact the hourly rates freelancers ask for. SME’s can then adapt their budget and hiring plans accordingly to ensure they stand out and compete to secure the best talent.

Read on below to find out the the most expensive and the most affordable freelancers to hire.


SEM Specialists are the most expensive freelancers to hire on an hourly basis

BODY IMAGE | In-demand freelancers

Search Engine Marketing specialists work on a business's search engine optimisation (SEO) strategy, focussing specifically on paid media spend, such as Facebook and google ads. Whereas Search Engine Optimisation specialists use organic tactics, such as analysing, monitoring and reviewing traffic patterns in order to increase visibility. In the UK, freelancers charge an average hourly rate of £58.76 for this skill. This is a huge increase in comparison to the average pay they would receive in-house, £31,540 which equates to £15.17 per hour if working in full-time employment.

IN BODY IMAGE | in demand freelancers

Small business owners should therefore consider the most financially viable option for their business model based on their needs at the time. If they require a skill on a long-term basis, using certain freelancers may be an expensive option.  

The table below shows the freelance skills that cost the most on an hourly basis:

RankFreelance SkillAverage hourly rate to hire on Upwork (£)Annual earning potential as a freelancer (£)Average annual salary in full-time employment (£)
1SEM Specialists58.76112,826.8831,540
2SEO Specialists57.59110,566.0935,365

The bottom three in terms of hourly rate are; Sales Representatives, Customer Service Experts and Data Entry Specialists commanding £17.03, £18.28 and £19.01 per hour respectively.

IN BODY IMAGE | in demand freelancers

Although taking home a relatively low hourly rate (not taking into account agreed commission structure) these freelancers can bring high ROI to your business (especially those in Sales and Business Development) which can then be reinvested into other parts of the company.

The table below shows the freelance skills that cost the least on an hourly basis:

RankFreelance SkillAverage hourly rate to hire on Upwork (£)Annual earning potential as a freelancer (£)Average annual salary in full-time employment (£)
1Sales representative17.0332,690.0528,454
2Customer Service18.2835,102.2320,611
3Data Entry19.0136,493.4423,969
4Personal Assistant20.4839,322.0829,617

Graphic Designers are the most searched-for freelancers

IN BODY IMAGE | freelancers

We also wanted to shed light on the skills that may be harder to hire good talent for, and where business owners may encounter more competition. To do this we looked at the search volume, per month, of each freelance skill on offer.

According to our research, Graphic Designers were the most searched freelance skill on google - with 1,900 monthly searches in the UK. On the other end of the scale, freelance admin received the lowest amount of searches.

How can businesses navigate the freelance space?

To provide more of an understanding of how SMEs can make use of the freelance market, we spoke to both freelancers and business owners to get their views.

Phil Scully, team leader at Haro Helpers, says “for businesses, the benefit of working with a freelancer is that you can always get a fresh pair of eyes on things. While you have your core values and ethos, having a freelancer for a certain large project can go a long way to help the business make sure it is always trying new and varied approaches to speaking with its audience, and each freelancer can offer new insight into your development and growth- it's not about changing everything you are, but learning from the wealth of experience that you work with over time.”

Alex Mastin, CEO and founder of Home Grounds, a community of passionate coffee hobbyists, builds upon this by saying freelancers can allow companies to focus on more important aspects of the business. “Freelancing is an excellent way to minimise disruptions when your team or company is experiencing change or an elevated workload. Freelancing allows your team to focus on important tasks while you can delegate those that require less oversight to an outside source.”

Evidently, if SMEs have more workload for a short period of time, then freelancers are the ideal way to manage this without taking on the financial commitment of a full-time hire.

How can businesses effectively work with freelancers?

Jane Griffin, owner of Positive Story, states that in order for SMEs and freelancers to work together effectively and build a good relationship, businesses should make sure to thoroughly brief freelancers as “there is nothing worse as a freelancer than not knowing if you’re supposed to be doing something or having to chase a client to find out.”

Alina Cincan, managing director of Inbox Translation, has been using freelancers for her business for 10 years and she has found that “freelancers are more motivated to get things done” and that “one main benefit of freelancing is you can hire the right people for each project.” She also goes on to say “working on a per project basis can be more productive and things get done faster and more efficiently.” This shows that freelancers can elevate businesses and allow SMEs to expand and grow as they take on more projects.

Throughout the research it has become clear there is demand for freelancers, and a financial benefit for SMEs to use them. Business owners should therefore maximise these services and work out - if not already using them - how they can leverage freelancers within their business.

Key takeaways

  • Freelancers can benefit seasonal businesses with fluctuating workloads. If tackling a new project, freelancers can bring new areas of expertise into the business as well as a fresh perspective.
  • SMEs should ensure they stand out against their competitors, by paying equal or above the market rate for freelancers or offering benefits, to ensure they secure the best talent for their company. Don’t try to go cheap.
  • Business owners should identify and pre-empt the skillset gaps in the business based on upcoming projects and seasonal workloads. This allows you to decide whether investing in PAYE or working with a freelancer will make the most sense.
  • In order to enjoy the best working relationship with a freelancer they should be treated as an extension of your team. It's important to provide thorough briefs and ensure they are aware of deadlines and expectations.

If businesses don’t need freelancers right now, but require extra capital to purchase stock, pay for bills, or even upsize their work premises, then a loan like our flexi-loan where you can borrow up to £500,000 might also be a good option.

Sources and methodology

We found out the average pay of freelance skills in a full-time role by using the average hourly pay from Upwork in May 2022 and by using the basis that a full time role is 40 hours per week. We then compared this against the average yearly salary of full-time employees.

In order to find the average monthly searches in the UK we used Google keyword planner. Upwork was the source used in order to see the average number of current job openings for different freelance skills. - salaries were converted at a rate of rate: $1=£0.81 on 11/05/2022Google Keyword Planner


Article updated on:
September 21, 2022

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