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Why SMBs Are Nervous About Hiring Gig Workers For The Holidays

A new survey from research capacity building program Support of Competitive Research (SCORE) released this week suggests small- and medium-sized businesses (SMBs) in the U.S. are increasingly reliant on gig economy workers to get through the holiday rush.

SCORE, which operates a network of volunteer business mentors, published its “Small Business Jobs Report” survey data on Tuesday (Nov. 21), highlighting a 37 percent increase in SMBs’ hiring of gig workers over the last six months — more than any other type of worker — as business owners seek out specialized professionals.

Hiring increased across all categories of workers among small businesses, with hiring of part-time workers increasing 22 percent in the last six months and full-time employees increasing 13 percent. Most entrepreneurs told SCORE that hiring had become a challenge in the time frame, too, as they try to fill skills gaps for their companies ahead of the holiday season.

Nearly one-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 hired more part-time workers to help run their businesses, too.

Some businesses did highlight benefits to choosing an employee rather than part-time contractor, however, with more than half citing consistency of work offering the greatest benefit. Employees also offer a commitment to the company and reduce turnaround of professionals within the same position, SMBs told SCORE.

Employers also cited concerns with the Internal Revenue Service (IRS) over hiring part-time workers, with worries that regulators would require these businesses to categorize their part-time contractors as employees anyway, or that hiring part-time workers or contractors would complicate paperwork and bookkeeping.

Amid this hiring boom, and despite a struggle to fill all the necessary positions, small businesses say they are quite optimistic about the six months ahead, with 69 percent saying they have a positive outlook about their own growth. Millennials are even more so, with 82 percent reporting they feel at least somewhat optimistic about their companies’ growth.

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