UK small and medium enterprises are facing tough times ahead, with an expected average revenue loss of £138,000 in 2025, according to new research from Fiverr. The recent Labour Autumn Budget has raised concerns among business leaders, with a quarter of businesses expecting losses exceeding £100,000. The proposed tax hike and economic instability in the UK are major worries for SMEs preparing for the future.
The impact of Labour’s budget policies and the increase in the national minimum wage are expected to affect revenue for 83% of businesses. The majority of business leaders anticipate negative effects on workers’ pay and are considering headcount reductions and hiring freezes. Despite these challenges, there is some optimism regarding Labour’s focus on improving workers’ rights, which could positively impact employee mental health.
Business leaders are open to new workplace trends, such as a four-day work week and a return-to-office model. While there is support for these changes, concerns about employee retention and work-life balance remain. The potential benefits of improved productivity, collaboration, and professional development are recognized, but there is also fear of lower workplace morale and increased operational costs.
In terms of hiring plans for 2025, AI and tech roles are dominating, with a focus on digital innovation. Businesses are willing to pay a premium for AI skills, indicating a growing demand in this area. Despite this, demand for creative and design roles remains low, highlighting the need for more support in this sector. Factors influencing hiring decisions include advancements in AI, regulatory changes, and budget constraints due to the cost of living crisis.
Freelancers are playing a crucial role in bridging skills gaps for businesses, with over half already integrating freelancers into their teams. Many businesses are leveraging freelancer expertise in AI, recognizing the value they bring to the table. Looking ahead to 2025, freelancers are seen as essential for achieving business goals, with plans to increase reliance on freelancers in the coming year.
Hila Harel, Director of International Growth at Fiverr, emphasizes the importance of freelancers in supporting businesses during uncertain times and driving growth and innovation. As workplace flexibility becomes a top priority, freelancers are expected to play a greater role in helping businesses navigate challenges and seize opportunities for success.
