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The "Untethered Workforce": 1 in 4 Firms Are Quietly Walking Away From the Permanent Job

ended 04. June 2026

The permanent job has always been the default. The thing you tell your kids to go and get. Well, new data suggests a lot of bosses have quietly stopped offering it. Some 39% of UK businesses have cut full-time recruitment, and a quarter are deliberately hiring more freelancers and contractors instead, with no plans to stop.

That comes from YouGov research commissioned by Employment Hero and reported by HR Grapevine, based on more than 1,000 UK business leaders. Set against rising unemployment, it points to a jobs market that is changing shape under our feet.

Here is the bit that surprised me. This is not really about money. Among the firms moving to contractors, 49% said they were chasing flexibility, 43% wanted to dodge long-term commitment, and 40% needed specialist skills. Cost came in fourth at 34%, even though full-time employment costs have jumped almost 10% in a year. Employment Hero calls it the "untethered workforce", which is a polished way of saying businesses still want the work done, they just do not want the wedding ring that comes with it.

Kevin Fitzgerald, UK Managing Director at Employment Hero, reckons the old assumption that permanent work is the natural starting point "is being tested". His warning is aimed squarely at the people who can least afford it. "A graduate looking for a first role, a parent returning to work, or someone trying to move into a new sector may increasingly need to think about short-term contracts or freelance work as part of their career plan."

And here is why it should keep you up at night if you run a small business. This lands the very week the Government is consulting on guaranteeing hours for zero-hours workers. So just as one door closes on insecure work, employers look to be climbing out of the window marked "contractor", which sits neatly outside all those shiny new protections. I have watched SMEs reshape their hiring to cope with cost before, from the scramble for virtual staff to soften the National Insurance hike, to the perennial IR35 and off-payroll headache. This is the same instinct, just wearing a new outfit. 

We'd like your views:

  • Is the "untethered workforce" real freedom for workers, or just a tidy rebrand for shoving the risk, the holiday pay and the job security onto the individual?
  • Whose career does this actually favour: the in-demand specialist who can name their price, or the graduate with no portfolio and no safety net?
  • Bosses say flexibility (49%) matters more than cost (34%). Do you believe them, or is cost still the quiet driver everyone is too polite to admit?
  • If permanent roles keep shrinking, is HR's job now to look after employees, or to project-manage a rotating bench of contractors who owe you nothing?
  • Are reforms like the Employment Rights Act protecting workers, or quietly herding employers toward the freelance loophole they were meant to close?

4 responses from the Newspage community

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Kate Underwood
Founder & Chief People Strategist at Kate Underwood HR and Training
The "untethered workforce". A lovely phrase for a not-so-lovely trade. Bosses still want the work done, they just don't fancy being on the hook for holiday pay, sick leave or a redundancy bill when it all goes pear-shaped. For the specialist who can name their price, this is freedom. For the graduate with no portfolio, it's all of the risk and none of the safety net. And flexibility over cost? Pull the other one. When full-time costs jump 10% in a year, cost is still the quiet driver. Employers are just too polite to say so out loud.
And look at the timing. Just as ministers move to guarantee hours for zero-hours workers, bosses are eyeing the contractor door marked "exit, no obligations". The reforms meant to shut that loophole are propping it wide open. So here's my steer to small businesses. Contractors plug gaps; they don't build cultures. Hire flexibly by all means, but don't outsource your loyalty and act surprised when there's none coming back.
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Matthew Knight
Chief Freelance Officer at Freelancing.Support
There's long been this idea that freelancing is a "lifestyle choice", but our research has shown the number of people who are freelancing because they felt they had little other choice, double in the last two years. Within the creative industries, for example, over a third of the workforce are freelancers.

Where employers once provided support and training - freelancers will need to lean more heavily on each other, and communities and collectives are becoming the critical infrastructure to find work, build connections, and develop new skills.

Employers still need to build strong relationships with their freelancers though - retaining their top talent will be essential as the best freelancers will only go back to clients who treat them with respect, pay promptly and fairly and don't ghost. Those who do not, risk increasing talent costs, as they have to continually find new people to join their network, as those who were treated badly will stay away.

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Graham Nicoll
Financial Planner, Chartered FCSI at NCL Wealth Partners

For workers, especially the 401,000 relying on zero-hours as full-time income, regularising hours can be a financial planning game-changer. It can unlock access to stable workplace pensions, standard employee benefits, and verifiable earnings needed for basic financial security like mortgages.

Yet for SMEs, forced rigidity can backfire. If compliance is too complex, firms may choose not to hire, which removes optionality for workers who are keen on these type of arrangements.

Success hinges on a balanced reference period. True security requires protecting worker income without choking the flexibility small businesses need to stay viable.
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Colette Mason
AI Ethics Consultant at Clever Clogs AI
As someone who is highly risk-tolerant, the cost of being tethered to unfulfilling employment was far higher than the "security" of a job that stole the joy of freedom to choose your life direction. I've only had a permanent job for 11 months and would never consider one.

I have sympathy for genuine businesses who need to reallocate or adjust headcount to stay afloat or improve their offering, and red tape cripples their ability to be nimble.

That said, job instability is thoroughly unsuitable for most workers and they need some protections to secure a place to live and raise a family.

I would prefer a two-lane job market, a freer one for those who want the freedom to opt in and out of the labour market as it suits their lifestyle goals. The contract economy was good for this til IR35 ruined the maths and scuppered it. For those who need stability, they need more protections. The problem is these two needs are mutually exclusive and many employers seek to abuse the gig economy.