57% of UK Startups Turn to Fractional Workers Over Full-Time Hires
- 57% of UK SMEs have hired or are considering flexible hiring to mitigate full-time recruitment risks.
- 29% already use fractional or freelance workers, while 28% are considering it.
- SMEs not using flexible hiring are over three times as likely to ban employee side hustles (28% vs 9%).
Startups.co.uk’s latest survey reveals that 57% of UK SMEs have either hired fractional, part-time or freelance workers to mitigate the risks associated with full-time recruitment, or are considering doing so.
Nearly a third SMEs already use flexible hiring
According to the data, 29% of UK SMEs actively employ fractional or freelance workers, and a further 28% are considering adopting this approach, highlighting a shift towards more flexible recruitment strategies as businesses explore alternatives to full-time hiring.
While full-time hires can provide consistency and continuity, permanent roles also involve ongoing commitments, including salaries, pensions and employee benefits.
For SMEs that need certain expertise but may not require a role on a full-time basis, fractional and freelance arrangements can offer greater flexibility in how they allocate resources.
Flexible hiring and employee autonomy
Flexible hiring may also reflect a broader approach to workforce flexibility, including how businesses accommodate employees taking on additional work outside their main role.
Among businesses that actively recruit fractional or freelance workers:
- 61% have no formal policy against employee side hustles
- 20% permit them in contracts
- 10% actively offer resources and support
- 9% ban them in contracts
Among businesses that prioritise full-time employees:
- 62% have no formal policy against employee side hustles
- 28% ban them in contracts
- 5% permit them in contracts
- 5% actively offer resources and support
Businesses that do not use fractional or freelance hiring strategies are more than three times as likely to ban employee side hustles in contracts (28%), compared with 9% of those that do.
Meanwhile, 10% of businesses using fractional or freelance hiring actively offer resources and support for employee side hustles, compared with 5% of businesses that do not use these hiring strategies.
The data suggests that UK SMEs embracing flexible hiring may also be more open to employee autonomy, with businesses using fractional and freelance workers twice as likely to actively support employee side hustles.
This points to a potential link between fractional/freelance hiring and a more flexible approach to working arrangements, as businesses look for ways to access the skills they need while managing the commitments associated with full-time recruitment.
“Our data shows how small businesses are rewriting the rules of employment. Facing rising operational costs and recruitment risks, startup leaders are swapping rigid 40-hour contracts for agile, fractional talent. Far from restricting employee side hustles, progressive bosses are backing that UK entrepreneurial spirit – using flexible models to access top-tier skills without taking on heavy statutory overheads. It’s a hypermodern strategy for staying lean, agile, and open to top talent in 2026.”
Zohra Huda, Editor of Startups.co.uk
Notes to Editors
- The survey was conducted in October 2026. The sample consisted of 295 UK businesses aged between 0–10 years, including founders, owners and C-suite executives.
- Startups.co.uk is the UK’s leading resource for starting a business. Founded in 2000, it provides information, inspiration and opportunity to new and serial entrepreneurs.
For questions, contact yaasmiin.hassan@startups.co.uk.
