Covid-19 has catalysed the decline in full time employment, with 9.6 million furlough claims made since April. At one point, four out of five hospitality workers were put on furlough and by June more than half of under-25s had been put on furlough or had been made redundant. COVID-19 has caused the destruction of industries which rely on traditional volume employers.
For almost eight uncertain months, the furlough scheme has provided financial safety for both businesses and employees during the latest economic crisis. And whilst the furlough scheme extension is welcome, for many employers and employees it is delaying the inevitable. This false sense of financial and job security will make the upcoming months even more difficult as mass redundancies are pushed into the new year and sadly, we predict we’ll see well over three million people unemployed when the scheme ends.
While the future of permanent work remains uncertain, there is real hope in the form of flexible working. Over the years, the temporary labour market has proved vital for several industries, from construction to hospitality, with one in seven UK workers now on flexible contracts. The use of flexible workers has spread widely to other industries, with the second largest group of contractors operating in ‘professional, scientific and technical’ activities with 610,000 UK workers. There is an obvious move from the traditional PAYE model to a more dynamic form of payment and taxation for labour.
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John Whelan is CEO at My Digital
Permanent employment hit hard
The current crisis has accelerated the new world of flexible work for many, where physically attending offices and buildings is advised against and remote working is being branded as ‘the new norm’.
The move to remote working has meant industries that once thought it was imperative for their permanent team to work from the office in a traditional 9-5, have had to rethink their business strategies. Employers are now more open to flexible working periods while using contractors and technology has made it easier to integrate these temporary resources fluidly into workgroups. More than ever, flexi-workers are able to seamlessly provide businesses with their specific skills remotely, without being set apart from teams working in office buildings.
Companies are now thinking ‘outside of the box’ and embracing the idea that jobs for life are history. This new way of flexible working is breaking down work into its smallest parts to minutes on a timesheet, which is called Quantum Employment. Businesses and employees can both benefit from the new era of Quantum Employment to drive mutual success.
The rise of the 'solopreneur'
The Quantum workforce is now made up of flexible workers that deliver industry-specific skills on demand, we call them ‘solopreneurs’. Employers can utilise a custom-made workforce of ‘solopreneurs’ to fit their business needs which is crucial during these challenging times. But, there is a problem, this multiplying workforce still needs to be onboarded, paid and taxed accurately.
Fortunately, a layer of businesses have sprung up between the employer who requires the work and the specialist workers delivering the work. Recruiters and umbrella companies offer innovative solutions to paying salaries to, and taxes on behalf of, solopreneurs. But, these ‘middleman' businesses are still challenged with legacy processes.
Today’s processes are ill equipped to deal with this new employment model. They are highly manual and don’t allow for the speed that is required to support the Quantum workforce. They are not only letting businesses down but also run the risk of losing out to competitors as they trail behind this fast-paced gig economy.
There is a need for real time information, from ID checks to timesheets, cash matching and accounting ledgers. This is essential for businesses to keep accurate, up to date accounts and for workers who want to be paid on time.
QED understands and adapts to changes
Quantum Employment Design (QED) is a cloud-native platform specifically designed to support the flexible workforce by reducing the time and staff required to administer the new world of flexible employment. QED provides transparency and speeds up the core processes needed to manage tomorrow’s digital Quantum workforce.
This means the onboarding experience of quantum workers accelerates significantly. In addition, organisations gain the ability to automate timesheets, which can often be left as a manual task, and provides real-time information exchange with HMRC, handling all tax calculations.
Modern digital accounting services need to be able to process payroll for tens of thousands of payments on a weekly, sometimes daily, basis. This enables in-house IT teams to concentrate on value added activities. Capacity requirements of the business can be accurately understood and staff hours can appropriately scale or contract as needed. Businesses' needs are bound to fluctuate, especially with the uncertainty of the pandemic, and they will need a system which can rapidly adapt to these changes.
As COVID-19 continues to accelerate, there will be further challenges including, but not limited to, legislation as more workers work on the same projects from different geographical regions. QED provides protection from the disruption of these legislative changes and adapts automatically, providing a seamless service for those using it.
The pandemic has highlighted the need for technological development in this industry and QED is pioneering the way. By using technology which enhances and evolves in real time, employment, accountancy and taxation can drive the future of work, which is just around the corner.
Quantum Employment is going to grow rapidly when the furlough scheme ends and the market must adapt to cope. Although the number of permanent roles available is declining, this is making room for countless possibilities in the world of flexible working. The five million flexible workers of today will double to 10 million over the next decade. In-house teams will need to ease the administrative burden placed on accountants and transform the way the temporary labour market is managed.
In the near future, people will be able to work where, when and how they want in line with their own work / life balance. Payments will be made on time as soon as work is completed and taxation will be immediately taken care of. Employees will also benefit from a reduced reliance on one employer for their income and be able to choose the incremental roles that most appeal to them. This way of working will be beneficial to many of the future workforce and change the current understanding of what work means.
Businesses will have to make tough decisions in the future by letting go of furloughed staff but fully utilising the new Quantum workforce will ensure that they can make use of the skills they need to remain competitive on the global stage. Employment is changing for good, we need to make sure to change with it.
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John Whelan is CEO at My Digital.