Remote Work in 2020

Foreword _________________________________________________ 3

Introduction _______________________________________________ 4

UK SME Finances Overview _______________________________ 5

Data: COVID lost revenue by region

Agility and Adaptability ___________________________________ 7

Agility vs Productivity _____________________________________ 8

Case Study: Christina Rotondo

Personal Impact ___________________________________________ 11

Infographic: Most and least optimistic cities

Conclusion ________________________________________________ 12

Contents

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Remote Work in 2020

It’s getting hard to remember what life was like when everyone worked in an office.

Packing ourselves onto public transport, rushing out of the office for a mid-morning coffee, and hustling across the city to get to the next meeting already seem like distant memories. It’s crazy to think all of that was just a few short months ago.

The way the world works together isn’t just changing — it’s changed.

Fiverr’s community of freelancers in the UK has grown and developed rapidly in this strange new world. They were well equipped - as many of the flexible working practices that seemed so new to most people have actually been commonplace for freelancers for a long time.

As a growing platform in the midst of a dizzying pandemic, we felt it crucial that we try to understand exactly what’s happened to the world of work - and how the broader economy may be able to integrate these new ways of working with those we knew so well in the old world. But where to start?

The SME community sits at the very heart of the UK economy. They account for 99.9% of the business population (5.9 million businesses), three fifths of the employment, and around half of turnover in the UK private sector1.

They also tend to be pretty good at thinking on their feet. A high proportion of SMEs see flexibility and agility as their greatest asset2 - which likely prepares them well to cope with crises. Any assessment of the changing face of British working methods must start here.

ForewordWe spoke to businesses up and down the UK - from Exeter to Glasgow, via Bristol, London, Birmingham Newcastle and more - to find out how they’ve been impacted and what they’ve learned.

Some of the results have been sobering: businesses reported an average £277,000 in revenue lost to the coronavirus crisis, and confidence in future revenue performance in places like Cardiff and Glasgow remains low.

But there were some signs of sunnier uplands too. Swashbuckling Britain may be down for now, but it’s certainly not out. The UK’s creative powerhouses like Manchester and Bristol reported increased productivity in high numbers, and London’s status as a global business hub appears to be safe for the time being - with half of businesses feeling optimistic about the future.

There’s never been a more uncertain time to be in business - in the UK or any country in the world. But if there’s one thing entrepreneurs do well, it’s adapt.

The way the world works together may well have changed - but change always brings opportunity. We know that Britain’s SME community - and it’s army of flexible digital freelancers - are up to the challenge.

1 https://www.fsb.org.uk/uk-small-business-statistics.html2 https://www.globalbankingandfinance.com/uk-smes-see-their-agility-and-flexibility-as-major-advantages-for-meeting-business-challenges-in-2018/

Micha KaufmanCEO

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Remote Work in 2020

IntroductionThis survey polled 1,000 SME owners and decision makers in 19 cities across the UK between March 27th and April 8th 2020.

Those surveyed covered a comprehensive range of business types and sizes, from sole traders to those with over 250 employees, or annual turnovers of less than £1,000 to over £1,000,000. These businesses were across a broad range of industries including but not limited to: education, finance, manufacturing, architecture, engineering, construction, legal, and arts & culture. Of the 19 cities surveyed, ten had a minimum of 50 respondents to ensure data variety and accuracy. These were Manchester, London, Newcastle, Glasgow, Cardiff, Belfast, Birmingham, Bristol, Liverpool, Leeds and Exeter.

1,000 19SME owners

March 27th - April 8th 2020

cities across the UK

These cities were chosen to be representative of the different obstacles in implementing remote working and challenges posed by COVID-19 in different geographies across the UK. By surveying a wide range of locations, we were able to draw comparisons between individual regions and counties, as well as against a UK average.

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Remote Work in 2020

Fiverr spoke to SMEs across the country to try to understand the true cost of the pandemic for UK business. UK decision makers estimate the COVID crisis has already cost - on average - over £277,000 per company, with 64% expecting revenues to decrease by half in coming months. Companies in London were expecting the largest fall as a result of the crisis with an average of £790,000 lost per company. Of the other major cities surveyed, SMEs in Newcastle reported the lowest cost as a result of COVID-19 at only £40,000 per company.

UK SME Finances OverviewTo say that the lockdown measures have had an impact on UK SMEs would be an understatement. From budgets being frozen, to pinched consumer spending and a general slowing of the pace across the business world - this is undoubtedly one of, if not the largest challenge businesses across the UK will ever face. For over a month, companies have been forced to close their doors, scale back their operations and even lay off staff. According to the ONS the two sectors in the UK that reported the largest percentages of businesses temporarily closing or pausing trading were the arts, entertainment & recreation sector and the accommodation & food services sector.3

with 64% expecting revenues to decrase by half in coming months

Average cost due to COVID crisis (estimate)

3 https://www.ons.gov.uk/businessindustryandtrade/business/businessservices/bulletins/coronavirusandtheeconomicimpactsontheuk/23april2020

Over £277,000 per company

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Remote Work in 2020

Anticipating the future consequences of the crisis, Glasgow was the least optimistic of the representative cities surveyed, with 68% of respondents estimating a decrease in revenues as a result of the pandemic. In Leeds, on the other hand just 38% of respondents predicted a decrease in revenues. The survey also found that smaller companies were generally more pessimistic about predicted revenue losses than larger ones. SMEs with an annual turnover of less than £1,000 estimated a revenue loss of over 70% while companies with a turnover of over £1,000,000 predicted just 33% by comparison.

Over a quarter (25%) said their business was completely unprepared for the pandemic, and only 12% of UK SMEs said they were fully prepared for the impact on their business. Many lay the blame for this in the hands of the government, with 37% saying this is the main reason they felt unprepared. However, the majority of business owners are more philosophical, with 39% saying that they don’t lay blame with anyone for what has happened.

Nearly one third of business owners (31%) blame themselves for not preparing themselves or their teams for the impact of the pandemic. This may seem harsh, for a situation that has been completely out of anyone’s control, but our findings show that some businesses were more agile and adaptable than others in the face of the pandemic.

Revenues losses per city

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Remote Work in 2020

“Success today requires the agility and drive to constantly rethink, reinvigorate, react, and reinvent.”

— Bill Gates

We have heard the phrase ‘unprecedented times’ a lot this year. But that’s truly what this is. We’re in a novel situation and when it comes to UK businesses - adapting to a novel situation requires novel solutions.

The pandemic has not only completely changed where we work and what we’re working on - it’s also challenged the whole construct of business as we know it. Digital transformation is attracting a greater level of investment than ever before4. Full-time remote working simply isn’t possible without the right setup. 26% of UK SMEs said they weren’t equipped with the right technology for remote work, and 34% said they weren’t equipped to work from home full-stop. Companies that were already prepared with the right technologies and processes are now winning.

Agility and AdaptabilityIn an environment where businesses have had to adapt to furlough, remote work and disrupted communications, it’s perhaps unsurprising that attitudes to hiring freelance talent to help manage workloads have changed. 58% of SMEs across the UK are working with more freelancers since the lockdown came into effect.

42% of businesses we surveyed actually found freelancers to be more productive than regular staff. And this isn’t wholly unexpected at this time. Many staff were thrown into remote work for the first time, which has understandably impacted focus and impacted productivity. However, many freelancers have been working remotely for their whole career - the stress of the pandemic may not have escaped them, but their working habits may not have been impacted in the same way.

Cities that have switched more readily to hiring freelance talent to help get work done - like London and Manchester - are also amongst the most optimistic about the future of remote working. And many other businesses are feeling optimistic about remote work generally. 35% of business leaders also feel more connected to their regular staff while working remotely than they did in the office!

4 https://www.idc.com/getdoc.jsp?containerId=prUS45612419

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Remote Work in 2020

Agility vs ProductivityThere’s a strong correlation between cities that have tended to take on more freelancers to help get them through the crisis, and increased productivity.

Cities like Birmingham, Bristol, and Manchester are among those who are most likely to have turned to freelancers. These also tend to be the cities that have seen the biggest increases in productivity.

There are further correlations between freelancer use and other metrics assessed in the data, including how prepared businesses felt for the crisis, and how optimistic they feel about the future.

Freelance Use Increase vs Productivity Increase vs Optimism vs Preparedness

Optimistic about the future

Preparedness

Freelance use increase

Productivity increase

There are some clear outliers - notably Exeter’s incredibly optimistic business community - but as we layer these metrics on top of one another a broad spectrum begins to emerge.

At one end of the scale are places like Cardiff and Newcastle, where businesses felt unprepared, were unable or unwilling to unlock freelance talent, and now feel less optimistic about the future.

And at the other end of the scale the opposite is true - here businesses in places like Manchester and Bristol felt more prepared, turned on freelance help at high rates, and now feel much more optimistic about what lies ahead. Their productivity tends to be higher, too.

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Remote Work in 2020

“It’s clear from the stats that the UK’s creative heartlands in places like Manchester and Bristol were more prepared and able to switch on freelance talent to help them through the covid crisis.

The fact that those places also tended to be more productive and optimistic about the future, though, speaks to something we’ve long known at Fiverr - freelancers bring real energy and zeal to businesses who hire them.

We adore our community of freelancers and have seen time and again from the inside how professionals hired for a specific purpose, bang on their niche, can turn around amazing work at breakneck speed.

To us, it’s no surprise that the companies who tend to use them are also amongst the most productive.

Think about it this way - a typical day for a digital freelancer involves instant messaging, video calls, and getting lots of work done on tight deadlines from their own home office. These professionals are perfectly suited to what’s now become known as “the new normal” - because for them it’s just, well, normal.”

Liron SmadjaDirector, Local Marketing

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Remote Work in 2020

“I traded in my career to take on freelance work full-time and I’m pleased to be seeing a demand for my work. At this time, I feel an even greater sense of recognition that I can help businesses who need the extra support to get things done quickly and efficiently. Fiverr has also been a great tool for freelancers like me during this time, who have lost other work as a result of the crisis”

Freelancer case study:Christina RotondaFreelancers themselves are working hard to support businesses who need extra help during the lockdown. And in an uncertain time when many face career vulnerabilities and whole industries are suffering, more freelancers are stepping up their hustle.

Those working in the freelance economy have less corporate and government protection to support them through this time so diversifying their skills and upselling their talent is more crucial than ever.

27-year-old freelance musician Christina Rotonda stepped up, selling her vocals and songwriting services on Fiverr to customers around the world. She has seen increased demand over the past couple of months from businesses requiring remote help. Having traded her full-time media role to pursue her passion, she made her mark on YouTube and began her freelance career on Fiverr in 2017, making a steady stream of income to do what she loves.

Christina RotondaFreelance musician

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Remote Work in 2020

Personal impactThe lockdown has impacted business leaders in many ways - some negative, but some positive. With extra time spent at home, 73% of UK SME owners and leaders feel more connected to their family. Whilst having everyone at home can certainly be chaotic for families, for a country with work-life balance challenges it’s encouraging to know that time at home has helped to connect hard workers with their friends and family.

As businesses look to the future, there’s new potential to keep these quality moments intact with more flexible working and remote working. In fact, 57% are taking positives from more flexible working and 55% enjoying an improved work-life balance during lockdown.

And there is now some light at the end of the tunnel, as businesses begin to open back up, 54% of SMEs across the country are optimistic about the future of their business. Cities like Birmingham, Bristol, Manchester are most optimistic about the future generally and are also amongst the most optimistic about remote working.

Most and least optimistic cities about the future of their business

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Remote Work in 2020

COVID-19 has had a profound impact on nearly all UK SMEs. However, some have been hit worse than others depending on factors like: business size, geography, proportion of freelance workers, and annual turnover. Irrespective of these differences, it has emerged clearly that agile businesses have been best prepared for the challenges of enforced remote working. Those who have been able to quickly unlock freelance talent have seen greater productivity increases.

It may be hard to remain optimistic during these times but the data also indicates that many businesses are both coping well with the task and learning valuable lessons for the future.

Digital transformation has moved on by years in the space of just over a month, and businesses have found new ways to make work happen - from hiring more freelancers to introducing flexible hours. They have also discovered new ways of making the most of a remote workforce through necessity.

Now, as mandated remote working protocols begin to show signs of lifting across the UK and businesses start to reopen their doors, the pace of business may hopefully begin to increase again. SMEs will emerge from this lockdown different than they were before, changed by the face of adversity, but undoubtedly stronger for it.

Conclusion