Small businesses are increasingly relying on part-timers and gig workers to meet holiday season work demands, but not all of them are happy about it, fearing potential regulatory and other issues.

According to a report from PYMNTs, there’s been a 37 percent increase in small- and medium-sized businesses’ hiring of gig workers over the last six months—more than any other type of worker—as business owners look for specialized professionals.

In a survey from research capacity building program Support of Competitive Research (SCORE), hiring increased across all categories of workers among small businesses; while gig workers accounted for 37 percent, part-timers saw an increase of 22 percent in the last six months and full-time employees increased by 13 percent. Most entrepreneurs, said the report, told SCORE that hiring had become a challenge as they try to fill skills gaps for their companies ahead of the holiday season.

Nearly a fifth of SMBs said they had replaced employees of all types with a contractor over the last six months, and 47 percent of small businesses with only one employee said they have also hired more part-time workers to help run their businesses.

The top reasons business owners choose to hire a contractor/temporary worker instead of an employee include specialized expertise (50.8 percent), temporary or seasonal needs (41 percent), and cash reserves to comfortably make payroll (35.1 percent). And the top business functions they outsource to contractors are technology (42 percent), accounting (41 percent) and marketing (38 percent).

Business owners reported that top reasons to hire an employee instead of a gig worker or contractor include consistency of work (57 percent) and a full-time worker’s commitment to the company, vision and brand (53 percent).

They have other concerns, too; they worry about the Internal Revenue Service when they hire part-time workers, lest regulators require them to categorize part-time contractors as employees anyway, or that hiring part-time workers or contractors would complicate paperwork and bookkeeping.

Instant Insights /

Gig workers help small businesses, but bosses are nervous about it

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