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19.10.2022
Why contractors are paid late and what can be done about it
By Richard Prime, co-CEO and co-founder of Sonovate
This op-ed was originally published in Business Express on September 14, 2022
Businesses don’t pay their contractors on time. It’s a fact. It’s not something they set out to do, but as chaotic cash-flow ripples across the economy, it’s contractors who shoulder the burden.
At Sonovate, we know first-hand from the agencies that we work with that paying contractors on time is a problem. Our Future World of Work research last year showed that flexible, hybrid and outsourced labour is dominating the labour market, yet contractors still weren’t benefiting from prompt payment.
What we didn’t know, however, was the scale of the problem. To explore this, we surveyed 500 senior decision makers in small-medium sized businesses (SMEs)* to find out why businesses are failing to pay contractors on time, and how they can improve their performance with the help of their recruiters and innovative tech solutions
Our findings were truly shocking. Over a third (37%) of medium-sized businesses who use contractors admit they take more than 90 days to pay contractors. The cause? Almost two-thirds (62%) of SMEs who use contractors say late payments from clients and customers cause cash-flow issues. Half (50%) say the knock-on effect is late payment to contract workers. When you consider that most permanent staff in the UK are paid a monthly salary, 90 days is absurdly long, particularly considering the current cost of living crisis.
For the full article, please visit: https://www.sonovate.com/blog/why-contractors-are-paid-late-and-what-can-be-done-about-it/
Sonovate provides tech-driven finance for the global contingent workforce.
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