A majority of small-business owners are bullish on the economy and the outlook for their sales growth in the next year, but just 27 percent say they plan to hire full-time staff, according to the CNBC/SurveyMonkey Small Business Survey.
Freelance staffing could bridge this gap, especially as the Trump administration expands the definition of the freelance labor market. Earlier this month, Labor Secretary Alexander Acosta withdrew an Obama-era legal opinion that favored a broad definition of who is an employee versus who is a freelancer. The move allows companies to classify more workers as freelancers, meaning they are not subject to the same federal wage and hour regulations as salaried employees.
The freelance economy is booming. According to 2016 data from the Metropolitan Policy Program at the Brookings Institution, the number of workers operating as independent contractors has increased by 27 percent more than payroll employees.
But businesses on Main Street have been reluctant to embrace this growing, often inexpensive and flexible labor pool. Out of more than 2,200 small-business owners recently surveyed by Manta, only 36 percent currently use contract workers. Eighty-five percent, meanwhile, said that they have no intentions of hiring any contract workers this year. The reasons for this hiring reluctance range from general employer-staff relationship fears to legal and compliance worries.