Small businesses are increasingly relying on part-timers andgig workers to meet holiday season workdemands, but not all of them are happy about it, fearing potentialregulatory and other issues.

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

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

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

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

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Business owners reported that top reasons to hire an employeeinstead 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).

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They have other concerns, too; they worry about the InternalRevenue Service when they hire part-time workers, lest regulatorsrequire them to categorize part-time contractors as employeesanyway, or that hiring part-time workers or contractors wouldcomplicate paperwork and bookkeeping.

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