Home Technology The rise of temporary work: how new technologies will equip SMEs for the revolution

The rise of temporary work: how new technologies will equip SMEs for the revolution

by jcp

By Richard Prime, Co-founder and CEO, Sonovate

Right now, the UK is experiencing the biggest surge in freelancing since the financial crisis more than a decade ago. In fact, one in four Brits has turned to freelancing due to loss of employment resulting from the crisis.

It’s a staggering statistic, with respondents citing furlough, improved earnings and a new career direction as motivation for making the move. The pandemic has no doubt prompted a growing number of professionals to experience the flexibility that contingent work affords, with a third of women naming flexibility as the primary reason for this shift.

The pandemic aside, this shift has been brewing for a while, with the ever-increasingly global workforce playing a role in creating a more competitive professional landscape. Similarly, digitalisation and the introduction of new technologies have revealed new possibilities in the way that we can work.

It’s safe to say that the way people choose or are expected to work is changing. In turn, businesses of all sizes are keen to tap into the booming contractor and freelancer market. There are a number of advantages to doing so, with the provision of new skills not available in-house named as the most common reason for using freelancers. What’s more, flexible talent is perceived as a way to speed up projects, save money and to facilitate digital transformation.

With that comes a need for businesses to reassess how they fund themselves in order to pay their contingent workers on time. With many businesses suffering the brunt of Covid-induced economic shock, it’s no surprise that several face additional pressure when it comes to paying freelancer talent due to cash-flow constraints and slow access to funding.

With this in mind, there is a clear need for businesses to access on-demand business finance that allows them to pay their contingent workers while maximising cash flow. As it stands, business finance is often built to suit the lender, riddled with hidden charges and beset with restrictions, and does not satisfy what businesses require from funding to survive and ultimately grow.

This is where lending-as-a-service or liquidity-as-a-service can come into play. This alternative mode of lending allows banks and lenders to use new technologies to surface their services on platforms outside of traditional banking channels. A subcategory of banking-as-a-service, the technology allows businesses to access funds when required using APIs and cloud-based infrastructure.

By providing funding and liquidity that is accessible as and when it is needed, this revolving credit model, which does not cost businesses to sit on and service, allows businesses to pay their contingent workforce on time, without worrying about cash flow and late payments, supported by back-office support allowing them to have visibility over live placements and the status of invoices.

At Sonovate, we’ve witnessed this gap in the market first-hand. We began life as a niche funding service for recruitment agencies but found ourselves quickly engaged by larger businesses across the world, with a contingent workforce of freelancers, contractors, and consultants hired on an on-demand basis; businesses who require ‘made to measure’ funding that’s available on-demand, embedded at the point of need, and forever switched on. With the lending-as-a-service model, we can help both businesses and individuals to get paid – easily and on time.

As flexible workers become more crucial to the world economy, lending-as-a-service platforms provide an easy-to-use, flexible and fast payment experience for businesses and their customers.

While the matter of whether the pandemic has created an irreversible change in the way we work is debatable, it has certainly accelerated the popularity of freelance and contract work. With a clear disconnect between the mechanics of current business finance and what businesses actually require in practice from their funding, lenders must embrace innovation to devise solutions that cater to businesses’ needs. In other words, it’s up to lenders to enable businesses to pay their flexible workers while contending with increasingly common cash flow issues. Lending-as-a-service might just be the answer.

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