Small businesses rely on independent contractors for
skilled services
Author: Jenna Weiner
October 12, 2009

Many workers who have lost their jobs in the recession are turning to independent contracting, and more small businesses are coming to depend on them, said a recent survey by SurePayroll.

The June 2009 SurePayroll Smart Business Scorecard found that the Contractor Index - which tracks small businesses' reliance on independent contractors - is at an all-time high of 4.06 percent, up from 4.0 percent last month. It has been steadily increasing during the recession.

Meanwhile, self-employment grew seven times faster than wage- and salaried-employment from 2002 to 2006, according to recent research by The Enterprise Center at Salem State College.

Using independent contractors often allows small businesses to cut costs by outsourcing a certain service - such as graphic design, branding, custom printing or even accounting - while still getting skilled work.

"A small-business person in a company of one can look to the world like a very large company and have access to all kinds of services - and that's largely because of this kind of model," Thomas W. Malone, a professor at the Sloan School of Management at MIT and author of The Future of Work, told the New York Times.

David G. Javitch, Ph.D., president of organizational consulting firm Javitch Associates in Newton, Massachusetts, advised small business owners to set clear goals and expectations for independent contractors.

In a column in Entrepreneur magazine, he urged employers to stay in frequent communication with freelancers and continually evaluate the contractor's performance.