In a recent article, Jeremy Quittner noted that, though the U.S. is in the midst of a recovery, the rise of Uber, Task Rabbit, etc. points us to a major change in small business hiring since the last recession. Essentially, many new companies are relying on contract workers – instead of full-time employees – to fulfill their business needs.
In his piece, Quittner compares the hiring mindset of two business owners:
The first, Ean Murphy, relies primarily on full-time staff for her bookkeeping company. She prefers this setup because, “because it deepens her relationship with her workers and clients.” She also finds the on-demand approach to hiring “troubling” because “she feels a responsibility to her workers that includes helping them fund their retirements and making sure they get a decent wage.”
Jacob Wood, on the other hand, relies on contract workers to meet the 100% of the needs of his global online business. Even though his company has hundreds of thousands of dollars in sales, and he thinks of hiring someone full-time to deal sales, Woods “wants to be careful and stay flexible”. In Wood’s way of thinking, “I would rather have a more solid business and more money.”
So, are you more like Murphy or Wood? If you are still a relatively small business, then the on-demand workforce model might be more attractive. And, per Quittner, there are currently 3 million contract workers in the U.S. which, when coupled with the current rate of economic growth, offers enough flexibility in the labor market to make this business approach financially feasible. But beware! A recent government ruling made it easier for these contract workers to qualify for employee rights. In addition, many of these on-demand workers have been suing for employee rights in courts - and winning! Also, if the economy picks up and the labor supply dwindles, getting contract workers for your business might be a more difficult task.
Regardless of which hiring model you use, it’s good to keep these various factors in mind as you move forward.
