The Gig Economy and Your Small Business: How To Make It Work


Prior to COVID-19, the gig economy became a useful resource for both large corporations and small businesses. Today, 36% of the U.S. workforce are in the gig economy, a number that continues to grow. If you run a small business, you may want to consider hiring gig workers if you’re struggling to find traditional full-time employees.

What is a Gig Worker?

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A gig worker is a type of skilled professional that receives wages based on one-time projects. Also known as ‘gigs’, they complete projects to make a living instead of receiving regular income. This makes for a flexible work setup, employers can pay gig workers for only the work that's available, and workers can have the freedom to create their own schedules. 

So, rather than trying to hire and train someone for a specific skill set, small business owners can source a gig worker that already has years of experience under their belt.

In this post, we’ll explore the benefits and potential drawbacks that small businesses can expect from hiring gig workers.

Benefits of Hiring Gig Workers for Startups

Export day-to-day tasks

As a business owner, many things can pile up or clog your daily to-do list, and hiring a full-time employee might not work if there’s a tight budget. If you need an assistant to help organize your day-to-day, then consider hiring a gig worker. Whether it’s a person who coordinates scheduling or someone who sources a delivery partner, there are tasks you can hand off to a gig worker that’ll open up additional time for business owners. 

Source people for special requirements

If a small business is looking to rebrand themselves or establish a presence on social media, hiring a gig worker with specialized skills can help.

Additionally, business owners can work with a variety of people. Just because an owner may use someone once, they can always work with new talent. Business owners should test the waters to find the right gig worker for their needs. 

Flexibility for busy and slow times

A small business owner can use gig workers when they need extra hands to help in-store during the holidays or a big project. Either way, hiring only part-time or short-term individuals can possibly help owners save money, especially on insurance or perks unless they choose to offer gig benefit options. Plus, owners can build a network of individuals that they can call on when that time of year rolls around.

Cut business costs

It takes a lot of money to find, hire and train an employee for a business. As a small business, every penny counts, so hiring a gig worker will help save money. How? Unlike traditional full-time employees, employers aren’t required to provide gig workers with full insurance and benefits. Rather than train a new full-time employee in how to complete a given task, a business can find an individual who already has years of experience.

Business owners who are thinking about hiring gig workers should review state and federal laws prior to hiring anyone to understand exactly how to do so properly. 

On that note, let’s segue into some possible negatives when it comes to gig workers.

Potential Drawbacks to Hiring in the Gig Economy

There are some trade-offs to working with freelancers and contractors. One of which is that they may not make the best partners for your business. If a gig worker gets hurt on the employer’s watch, the worker could try and sue the small business. In comparison, full-time employees are typically covered by workers’ compensation insurance and usually cannot hold their employer responsible for work-related injuries.

Additionally, employers could get in trouble with the law if they don’t understand some of the tax implications and laws unique to gig workers. You don’t have to look far to see examples of what negative impacts improperly compensating gig workers can have on a business. DoorDash has in the past been spotlighted for not paying their gig delivery drivers their full tips. Drivers for Uber and Lyft are lobbying for new laws to protect their rights as workers. Small business owners should take time to learn from the mistakes of these larger corporations so they don’t end up getting in trouble too.

The Bottom Line

Gig workers are a great resource for a small business. They can help small business owners complete one-off tasks, specialized jobs, and can potentially save owners money. However, it’s essential that owners remember to treat gig workers fairly and to compensate them correctly. Then small businesses and gig workers can thrive together.

Author Bio: Sara Carter is a co-founder of Enlightened Digital. She enjoys spending her days writing about technology and business, writing code or chasing her kids and dog.

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