The hiring drought that many freelancers and contractor sector recruitment agencies have been feeling this year could soon change all thanks to Rachel Reeves’ tax-heavy budget. Could better days be on the horizon for freelancers in 2025?
Rachel Reeves’ Autumn budget, dubbed a record-breaking tax-raising exercise, has left many UK businesses reeling. With a rise in National Insurance contributions, an increase in the minimum wage, and the ongoing cost of living crisis, a new survey from Fiverr reveals that businesses are anticipating significant financial headwinds.
The survey, which polled over 1,500 UK business leaders, paints a stark picture for 2025, with anticipated average losses of £138,000 and a quarter of businesses expecting losses to exceed £100,000.
“As the UK navigates upcoming challenges, it’s encouraging to see business leaders increasingly turning to freelancers to help tackle economic instability and evolving workplace trends,” says Hila Harel, Director of International Growth at Fiverr. This shift towards freelance talent presents a significant opportunity for both independent professionals and recruitment agencies who specialise in the contractor market.
SME financial anxieties linked to freelancer hiring boost
The Fiverr research highlights that 83% of businesses feel Labour’s budget policies, including the business National Insurance increase, will negatively impact their revenue. Worryingly, 1 in 3 businesses believe the impact will be significant or severe, requiring a strategic shift in their operations.
With financial pressures mounting, businesses are looking for ways to adapt. “With the four-day work week and return-to-office policies gaining momentum, it’s clear that workplace flexibility is a top priority,” Harel observes. This need for flexibility, coupled with budget constraints, is driving a surge in demand for freelance talent. Half of the organisations surveyed believe freelancers will be crucial in helping them reach their business goals in 2025, with 45% planning to hire more freelancers next year.
AI, skills gaps, and the changing workplace
Despite the economic uncertainty, many UK businesses are planning for growth. Over half (55%) intend to expand their workforce in 2025, with a focus on IT, tech, and AI roles. However, finding the right talent in a competitive market is proving challenging. Fiverr’s 2024 UK Future Workforce Index reveals that businesses are willing to pay a premium for AI skills, with over 80% prepared to offer an average of 45% higher wages for candidates with AI expertise.
This skills gap, combined with the economic downturn, is further fuelling the demand for freelancers. Nearly a third of businesses are already leveraging freelance expertise in AI, and this trend is set to continue.
To truly thrive as a freelancer and help ease money worries, you need to stay ahead of the game, and that means embracing continuous learning. Think of it as evolving your skillset – not just for survival, but to unlock exciting new opportunities so you can reach your full earning potential.
Read this special report: Why Freelancers Should Upskill Every 6 months
Looking ahead: A flexible and dynamic future
The UK’s economic landscape is undergoing a period of significant transformation. As businesses grapple with rising costs, political uncertainty, and a rapidly evolving technological landscape, they are increasingly turning to freelancers for support. This presents a unique opportunity for both freelancers and recruiters to thrive in a dynamic and evolving market.
Key takeaways for freelancers and recruiters
Before the new year starts and new recruitment budgets emerge use this time to upskill. Demand for AI and tech skills is soaring. Freelancers and recruiters should focus on developing expertise in these areas that could help them become more attractive to hiring companies to capitalise on the growing opportunities.
Flexibility is a two-way street: Businesses are prioritising workplace flexibility. Freelancers who can adapt to different working arrangements and project requirements will be highly sought after. That could mean being in person for an initial project or available via video for certain hours in the first couple of weeks and then working remotely once the project is set in motion and the team has time to meet. This is not always necessary but it could make certain clients more confident in their hiring decisions.
Highlight your value with your new skills: Clearly communicate to recruiters the value you bring to businesses, emphasising your skills, experience, and ability to deliver results. Be as specific as possible, and use measurable results.
It can be hard to justify upskilling when you are worried about bringing in money. Therefore, set aside time every day for pitching and upskilling. Give yourself a date to complete a course to add to your portfolio skills and set a target amount of pitches each week. Do in-depth research on clients before each pitch to keep pitches relevant, fresh and unique.
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