SCORE's small business jobs report and the gig economy

Written on Nov 30, 2017

SCORE, a nonprofit association that provides mentoring services to small businesses, released their fall Small Business Jobs report recently.

It has some very interesting data on small businesses and their use of gig workers.

According to the report:

  • Business owners reported a 37% increase in hiring gig workers over the past six months, compared to increases of 13% for full-time employees, 22% for part-time employees, and 12% for part-time independent contractors.
  • 19.8% of businesses surveyed reported replacing employees (of any type) with contractors over the past six months.
  • 47% of non-employer/solopreneur firms reported hiring part-time workers and/or contractors to help run the business, for an average of 3.2 workers, including the owner.

Respondents chose the following reasons as having an impact on their decision to hire a contractor or temporary worker versus an employee*:

  • Specialized expertise: 50.8%
  • Only have temporary or seasonal needs: 41%
  • Cash reserves to comfortably make payroll each month: 35.1%
  • Cost of employee health care: 30.7%
  • Less expensive: 25.5%
  • Complication of setting up employee health care: 20.4%
  • Cost of other retirement benefits: 20.1%
  • Having to manage a person versus a service being responsible for managing: 18.2%
  • Complication in setting up retirement plans: 16.1%
  • Try-out person to hire as employee: 15.4%
  • No available work space: 10.4%

*Respondents could choose all options that applied

Most people we talk to think cost is the main reason people use gig workers.

But as the information shows, cost issues are well below accessing specialized talent and the small business only having temporary needs.

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