With the recent increase in National Insurance (NI) contributions, UK agencies face an undeniable challenge: the cost of employing permanent staff is on the rise. For many agency leaders, this change will hit margins hard and force a good look at hiring strategies.Â
With any challenge however, there’s an upside—an opportunity, in fact. Now is the perfect time for agencies to look beyond traditional full-time hires and adopt a core/flex model that combines a stable core team with a flexible freelance workforce.
Having worked in agencies for over two decades, building teams, hiring, and weathering the financial realities that come with growth, I’ve seen how crucial agility is in navigating uncertain times. Here’s why I believe a core/flex model is the smartest move for agencies looking to stay resilient and adaptable.
The Challenge: Rising Costs and Shrinking Margins
The NI contribution hike translates into a direct increase in employment costs, making it tougher for agencies to sustain large permanent teams. For agencies already under budget pressure, each new hire becomes a substantial commitment that requires careful consideration. This financial strain, however, shouldn’t be viewed purely as a hurdle. Rather, it’s a chance to rethink how we approach staffing altogether.
The core/flex model is a balanced workforce structure where your core team provides stability and your flexible, freelance talent allows for adaptability. By relying on a network of freelancers to handle fluctuating project demands, agencies can scale up and down as needed, keeping costs manageable and outcomes high-quality.
Why the Core/Flex Model Works for Agencies
Cost Efficiency: Permanent hires come with higher fixed costs and long-term commitments, which can be risky in an unpredictable economic climate. By engaging freelancers for specific projects, for certain clients or with some services, agencies can keep overheads low and ensure that resources are allocated efficiently.
Access to Diverse Talent: One of the greatest benefits of a flexible workforce is that it allows agencies to tap into specialised skill sets on demand. Instead of trying to find one person who does it all, the core/flex model lets you bring in experts when and where you need them, enhancing project outcomes and client satisfaction.
Scalability and Agility: Agencies are known for their fast-paced environments, where project needs can change overnight. A flexible workforce makes it possible to respond to these shifts without overextending permanent teams, allowing for a quick ramp-up when necessary and an equally swift scale-back when things slow down.
Resilience in Uncertain Times: Economic challenges aren’t new, but they do require modern solutions. A core/flex model brings resilience, allowing agencies to weather market changes without the financial burden of an overly large full-time team.
Making the Core/Flex Model Work for Your Agency
While the core/flex model sounds appealing, making it work requires a thoughtful approach and some work up front which is where most agencies get stuck. From our experience these are some practical steps to help agencies integrate freelancers effectively with their core teams:
Define Clear Roles and Expectations: Just as I stress in role profiles, clarity is key. Outline specific roles and responsibilities for both core and flex team members, ensuring everyone understands their contributions and how they align with agency goals.
Establish Consistent Communication Channels: Freelancers need access to information to be effective, but not at the expense of the core team’s time. Set up streamlined communication tools and regular check-ins to ensure alignment without causing bottlenecks.
Build Relationships with Freelancers: Treating freelancers as true extensions of the team fosters loyalty and reduces turnover. Develop a core group of trusted freelancers who know your brand and standards, allowing for smoother transitions between projects.
Looking Forward: A Call to Adapt
The NI tax hike is just the latest reminder that we’re operating in a shifting landscape where agility is invaluable. For agency leaders, the core/flex model offers a strategic way to remain competitive, manage costs, and deliver exceptional results—all without compromising on team cohesion or client service.
Now is the time to take advantage of this model, building a workforce that’s as dynamic as the projects and clients it serves. By adopting a flexible approach, agencies can ensure they’re ready not only to survive but thrive in an ever-evolving industry.
Tom Wilson is an Agency Adventure Guide He support agency leaders by sharing my experience and guiding them to a path of sustainable growth and helping them avoid some of the traps waiting for them as they do. Find out about Tom
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