The survey also found that only 12 per cent of respondents worried about the cost of getting rid of new employees if things go wrong with the business or the employee doesn’t perform.

The survey revealed that small businesses are already adopting flexible employment arrangements, keeping costs low by hiring skilled freelancers, and showing that small businesses are more innovative and faster moving than Government attempts to help them out.

The small business survey also found that 40 per cent of small businesses said for the same money they’d spend on one employee, they could hire a range of freelancers with different skills.

More than 60 per cent also disagreed with the Government’s assumption in their consultation on changes to employment law that small business were put off hiring their first employee by the burdens associated with employing someone. The respondents claimed that this was an outdated concept as most were now employing consultants and freelancers rather than full time employees.

50 per cent of small businesses stated that they were more likely to increase their capacity to grow by using a range of skilled freelancers compared with only 11 per cent that stated their capacity to grow would be increased by recruiting employees.

According to Matt Barrie, CEO of Freelancer.co.uk, the survey shows that small businesses are ahead of the Government in employment innovations. : “Government is playing catch up as small businesses change the ways they employ workers to suit their needs now not waiting for the Government to act. While the Government changes are welcome, small businesses see these changes as well past their sell by date. Most small businesses are already employing consultants and skilled freelancers as and when they need them rather than worrying about hiring and firing employees,”

“The survey found that small businesses get more for their money if they hire a range of skilled freelancers than one or two employees. The Government hasn’t yet accepted the fact that even small businesses are outsourcing today just like larger companies in the UK. As the most recent Labour Market Statistics showed, there are more freelancer self employed people in the UK than ever before – now more than 4 million – and they are working for small businesses up and down the country,” he added.