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Small Business Owners Are Not Following Suit in the Gig Economy

Small Business Owners Are Not Following Suit in the Gig Economy
Credit: RawPixel/Shutterstock

The gig economy might be growing by leaps and bounds in the U.S., but small business owners are slow to embrace freelancers and independent contractors. A new survey released by small business marketing firm Manta found that most entrepreneurs prefer to employ traditional salaried employees rather than opt for more temporary or fluid work arrangements. Moreover, the minority of small business owners that do use gig economy labor don't offer benefits to those workers, the survey results demonstrate.

"With all the press the growth of the gig economy has gotten … we were expecting to see higher numbers," Dario Ambrosini, chief operating officer at Manta, said. "These results are more in line with what we've seen from small businesses in the past. They mainly hire contract workers for seasonal businesses or short term projects."

According to Manta's survey, two-thirds of small business owners do not currently employ any contractors or freelancers, and 85 percent have no plans on hiring those types of workers within the next year. Further, 73 percent said they do not utilize online labor marketplaces, such as Upwork, to find and hire freelancers.

Economists Lawrence F. Katz and Alan B. Krueger, research associates at the National Bureau of Economic Research, estimate the gig economy – defined as independent contractors, freelancers, or workers at temp agencies – grew from 10.1 percent of the employed workforce in the U.S. in 2010 to 15.8 percent of 2015. Still, Ambrosini said he has little expectations for small business owners to jump in on the trend like larger companies have. [See Related Story: The Gig Economy's Growing Influence on the American Workforce]

"Small businesses tend to buck the trend and do their own thing," Ambrosini said. "Large companies are definitely moving toward the contract worker, but this poll and everything else we've done shows SMBs won't embrace the gig economy –  and I wouldn't predict that they will until those numbers start to move."

Manta's survey is based on responses from more than 2,200 small business owners between March 28 and March 31. The margin of error on all numbers is +/- 2.08 percentage points.

Adam C. Uzialko

Adam C. Uzialko, a New Jersey native, graduated from Rutgers University in 2014 with a degree in Political Science and Journalism & Media Studies. In addition to his full-time position at Business News Daily and Business.com, Adam freelances for a variety of outlets. An indispensable ally of the feline race, Adam is owned by four lovely cats.