For a small business, using freelance workers and independent contractors can have a considerable impact. Engaging gig workers may be as straightforward as hiring someone to do data entry for a short-term project, or using a freelance web developer. There are many ways businesses can benefit from the gig economy, and even cut costs as they keep business operations moving.
Here are some examples of creative ways companies have used the gig economy that could spark your imagination:
Get short-term work done
Think of all the work that may be time-consuming, but isn’t directly tied to your business’ bottom line. The list can include moving your business location, getting new computers and printers set up, cleaning out old files, and more.
If you have an employee who makes $20 an hour with benefits performing this work, it may not be the best use of their working hours. By contrast, it could cost $15 an hour for a gig worker to come in and complete a one-off project, which could be a better decision when it comes to your bottom line.
Bulk up your headcount (for a day)
Worried because you have a VIP visiting your office, but half your workers are out sick or on vacation? Businesses have “hired” stand-in workers to come in and look busy for the day.
Katie Zechar tells CNBC that a medium-sized tech startup in San Francisco brought her in as an "extra" for the day because a vice president of the company was in town. She spent the time entering data onto a spreadsheet for another client and walked away with $100.
Add extra impact for an event
Hiring gig workers can be a great way to add some style to a company event without incurring a large price tag. Perhaps your company party doesn't need a professional caterer, but you could hire a gig worker to tend the bar. You may even bring in a few wait staffers, or someone to play piano at the holiday party.
Work with influencers
Large companies often have bigger budgets than small businesses do for areas of the business such as marketing. For instance, small businesses may not believe they can engage in influencer marketing and line up quality reviews of their products and services. But that perception has been changing as individuals in the gig economy focus more on small businesses, LSEO founder Kristopher Jones wrote in Forbes. There are many influencer marketing companies that connect businesses with working professionals who can offer their social influence.
How do you pay gig workers?
When you work with gig workers, it's important that you pay them correctly. For example, you aren’t required to withhold taxes from independent contractors who are correctly classified or pay the employer portion of social security, Medicare, and state unemployment taxes, as you do with employees. However, you are required to keep track of independent contractors’ earnings and report those earnings to the IRS on a 1099-MISC tax form for all contractors who earned more than $600 in a calendar year. You must send out Forms 1099 to independent contractors on or before January 31 each year for the prior calendar year.
All companies that use freelance workers need to make sure they are properly classified and paid correctly. If you need help determining if a worker should be classified as an employee or an independent contractor for tax purposes, or under other applicable laws and regulations including wage and hour laws, consider consulting with a human resource professional or legal counsel in order to mitigate exposure to misclassification issues.