A Startups.co.uk survey reported on 21 October 2026 found that 57% of UK small and medium-sized enterprises have hired, or are considering hiring, fractional, part-time or freelance workers to reduce the risks and costs of full-time recruitment. That is more than half the small-business economy saying, in effect: we would rather buy your skills by the slice than hire someone full time.

If you are a UK freelancer, that is your addressable market talking. This article breaks down what the numbers actually say, what small businesses are really buying, and how to pitch for it.

What the survey actually found

The headline figure needs reading properly, because there is a trap in it.

  • 29% of SMEs surveyed already use fractional, part-time or freelance workers.
  • 28% are considering it.
  • 57% is those two groups added together.

Only the 29% are spending money today. The 28% are interested, which is not the same as a signed contract. Treat the headline as direction, not as 57% of SMEs queuing up with open wallets. I’ve watched plenty of “considering” percentages melt between a survey answer and an actual budget.

The survey also asked about side hustles, and the split is revealing. Among businesses that use flexible workers, only 9% ban employee side hustles in contracts, 20% explicitly permit them, and 10% actively offer resources and support. Among businesses that prioritise full-time staff, 28% ban side hustles outright and only 5% permit them. Flexible employers, in other words, are far more comfortable with portfolio careers. That matters if you do fractional work alongside other clients, because these are the clients least likely to demand exclusivity.

Zohra Huda, editor of Startups.co.uk, put it like this: “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.”

An earlier survey by 1st Formations of 1,055 small business owners (data collected June and July 2024) points the same way: 53% said they were looking to hire staff on a contractor or freelance basis, against 21% planning permanent hires. So this week’s numbers are not a blip: the appetite for freelance hiring was already there in 2024, and it has kept growing since.

Why small businesses are buying this way

Full-time hiring has got expensive and risky. A permanent employee brings salary, employer National Insurance, pension contributions, holiday pay, sick pay, and growing statutory protections: under the Employment Rights Act 2025, sick pay and paternity leave start on day one, and unfair-dismissal protection applies after six months (from 1 January 2027). For a 20-person company, one bad hire is a six-month, five-figure problem.

A freelancer flips the maths: the cost stops when the work stops. No redundancy process, no probation drama, no awkward conversation in month four. From the buyer’s side, that is the whole appeal.

There is a second, quieter reason. Small firms need senior skills they cannot afford full time. A startup doing £2m turnover cannot hire a £90k finance director, but it can buy that person one day a week. Same for a marketing lead, an operations manager, a bid writer. This is what “fractional” really means: executive-grade skills, rented in slices.

So the opportunity is not “do my admin”. It is: bring the senior judgement they cannot hire.

What “fractional” work actually looks like in practice

If you are used to selling projects, fractional work is a different product. Three common shapes:

The retained day. One or two fixed days a week, recurring monthly, paid as a flat retainer. “I am your marketing lead every Tuesday and Thursday, £1,400 a month.” The client gets predictability; you get predictable income.

The outcome retainer. A monthly fee tied to a defined scope of outcomes, not hours. “I run your invoicing and credit control, chase every overdue account weekly, and keep your debtor days under 35.” Priced on value, not time.

The project with a tail. A defined project (build the website, write the bid) plus a small monthly retainer for maintenance and tweaks. This is how you stop one-off projects from ending at zero.

Notice what none of these are: hourly billing with a timesheet. Fractional buyers are buying reliability and seniority, and hourly rates invite haggling. Package the work and the price becomes a business expense line, not a cost to minimise.

How to pitch for fractional work

Most freelancers pitch backwards: “I do X, here is my rate.” Flip it.

Step 1: Name the cost they already feel. “You are paying a full-time salary’s worth of recruitment fees, or your founder is doing the marketing at midnight.” Start from their pain, which the survey has just confirmed is recruitment risk and cost.

Step 2: Offer the slice. Propose the smallest useful engagement: one day a week, a 3-month trial, a fixed monthly fee. Make saying yes cheap and reversible. A three-month fractional trial at £1,200 a month is an easy yes for a business owner; a £45k permanent hire is a hard one.

Step 3: Write it like a business case, not a CV. Two short paragraphs. What changes in 90 days. What it costs. What happens if it does not work (you walk away, no drama). Business owners buy outcomes and low risk.

Here is a pitch shape you can adapt:

Hi [name], I work with small businesses as a fractional [your discipline] — typically one day a week. Most of my clients were stuck between “we need senior help” and “we can’t justify a full-time hire.” In the first 90 days I usually [specific outcome: get your invoicing cycle under control / rebuild your pipeline / clear the content backlog]. It is £X a month, three-month initial term, and if it is not working you stop with 30 days’ notice. Worth a 20-minute call?

No hourly rate. No life story. One clear offer.

Step 4: Follow the money conversations. Where do small business owners talk about hiring pain? Accountancy firms (ask your accountant for introductions), local business networks, and the comment sections of exactly these survey stories. The survey itself is your door opener: “Saw the Startups.co.uk numbers this week — is that what you are seeing?”

The contract bits that protect you

Fractional work is closer to employment than a one-off project, so the paperwork matters more, not less. Three things to get right from day one:

Payment terms in writing. Agree the payment term before you start: 14 or 30 days from invoice, stated in the contract. The Commercial Payments Bill working its way through Parliament would cap commercial payment terms at 60 days, but it is not law yet, so your contract is your protection today. (Our guide to invoice payment terms walks through what to put in the clause.)

Late payment rights. UK law already gives you statutory interest at 8% above the Bank of England base rate on overdue business-to-business invoices, plus fixed compensation of £40, £70 or £100 depending on the debt size, under the Late Payment of Commercial Debts (Interest) Act 1998. Read our late payment rights guide so you know the lever exists before you ever need it.

Scope boundaries. A retainer creeps. Write the scope into the agreement: what is included, what counts as extra, and what happens when the extra arrives (it gets quoted separately). “One day a week” without boundaries becomes five days of Slack messages.

Notice period. Match yours to the client’s reality. Thirty days’ notice each way is the standard; it gives you time to replace the income and gives them time to find cover.

This is general information, not legal or financial advice. If the sums are large or a dispute is brewing, get proper professional advice.

The honest downside

Two warnings, because the survey numbers are seductive.

First, fractional income concentrates risk. Three retainers at £1,500 a month each feels like a £54k salary, but it is three clients who can all give notice in the same bad quarter. Keep any single client under about 40% of your income if you can, and keep one eye on your pipeline even when you are fully booked. I learned that one the expensive way in 2019.

Second, “considering” is not “buying”. When you pitch into that 28%, expect a slow yes. These businesses are interested in principle and cautious in practice. Budget for a longer sales cycle than project work, and do not stop your other marketing while you wait.

One more honest note on the data itself: the published coverage does not include the survey’s sample size or methodology, so read the percentages as indicative rather than precise. The direction is what matters, and two independent surveys agree on it.

Frequently asked questions

Do I need to be a limited company to win fractional work? No. Most fractional engagements work fine as a sole trader invoicing monthly. Some larger clients prefer contracting with a limited company for their own procurement rules, but for SMEs it is rarely a requirement. Do not incorporate just to chase this; the admin cost usually outweighs the benefit until your income justifies it.

How do I price a fractional retainer? Start from your day rate, then discount slightly for the commitment: a common pattern is day rate × days per month × 0.9. The discount buys you income stability, which has real value. Price the retainer monthly, not hourly, and review it after the first three months once you know the actual workload.

Is the 28% “considering” figure real demand? It is real interest, not real demand. Demand is a signed agreement. Use the figure as a reason to pitch, not as a reason to assume the work will find you.

What roles do SMEs actually buy fractionally? The classic fractional roles are finance (bookkeeping through to part-time FD), marketing, operations, HR, and sales development. Specialist project skills (web builds, branding, bid writing) sell better as projects with a maintenance tail. If your skill is usually bought by the project, adapt the packaging rather than forcing the fractional label.

Your move this week

The survey is a snapshot of buyer intent, and buyer intent is perishable. This week, pick ten small businesses you would like to work with and send five of them the pitch shape above, customised. Not fifty spray-and-pray emails: five real ones, each showing you understand their business. If the Startups.co.uk numbers are right, more than half of them are at least open to the conversation.

And while you are at it, tighten your own payment terms before the work lands. Fractional or project, the money only counts when it arrives. Our UK Late Payment Toolkit (£7) has the interest calculator, copy-paste chase emails and the letter-before-action template in one place.

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