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Small businesses' use of independent contractors more common

September 03 2013

Nearly one in five small business owners, 22 percent, are more likely to bring in an independent contractor today than a full-time employee, according to the SurePayroll Small Business Scorecard for August. However, 40 percent still would prefer a full-time employee, and 38 percent are not looking to hire at all.

“It’s a fairly dramatic change in the small business mindset we’re seeing,” said SurePayroll CEO and President Michael Alter. “Ten years ago, if you had told me almost one in five small business owners were more likely to hire a contractor than a full-time employee, I would have been shocked. However, now it’s become much more common.”

Of those more likely to hire independent contractors, 75 percent said it was because they simply don’t need a full-time person to fulfill specialized roles in areas such as marketing, information technology or administrative work. Thirty-six percent also said they hire independent contractors to reduce tax and benefits costs, and 23 percent said it’s to stay below the Affordable Care Act’s 50 full-time employee count.

SurePayroll’s Scorecard compiles data from more than 40,000 small businesses and exclusively reflects the trends affecting businesses with an average of eight employees.

SurePayroll Inc. provides online payroll services to small businesses. It is a subsidiary of Paychex Inc. (NASD: PAYX).

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