new study by Trinity Business School and the University of Derby has found that businesses, where at least 11 per cent of their workforce are contractors, are more productive.

Conducted among more than 1,000 UK businesses, the research found that hiring a freelancer helped to generate on average an extra £4,669 per person for the company.

It would also seem that hiring freelancers helps businesses to grow their own team, with firms that hire freelancers and contractors above the 11 per cent threshold creating an additional 914,400 new jobs – or 1.2 additional new roles per firm.

According to the researchers, freelancers are most effective when added to an existing workforce, as opposed to simply using them as a replacement, with most businesses seeing a clear improvement in performance.

Professor Andrew Burke, Chair of Business Studies and Dean at Trinity Business School, said: “People normally associate the use of freelancers with employment destruction, as they are perceived as doing work that otherwise could have been done by employees. This view overlooks a different type of freelancer who works in sync with employees but brings expertise and innovation not available within firms and on a swift basis, thereby enabling these businesses to innovate, grow faster and ultimately create more employee jobs.

“Our research is the first empirical research to see which type of freelancing effect dominates. Using UK data, we find that there is a positive net effect of freelancing on employment creation but to generate these gains, firms have needed to take a deliberate strategic initiative to adopt a freelance intensive workforce model comprising of at least 11 per cent by freelancers.”

Marc Cowling, Professor of Business Economics at the College of Business, Law, and Social Sciences University of Derby, added: “Our research was the first to debunk the view that freelancers are cheap, low-value workers who cause job losses by replacing core employees. Rather, we found they add specialist skills and expertise that create value and profit and allow firms to increase their core workforce as they accelerate their growth.”

This new study is positive news and help gives credence to the importance that contractors and freelancers play in the economy. We hope studies such as these will help businesses and the Government to appreciate the importance of the sector.