"Often, freelancers, consultants, contractors have much more subject-matter expertise than your permanent workforce, and are needed only for a short period of time. Thus, it makes much more sense to 'rent' talent in that situation versus owning it," he says.
Tech startups, in particular, are taking advantage of the 1099 economy - referring to the 1099-MISC form that independent contractors file with the IRS to report wages at tax time - as Kevin Roose outlines in an article for New York Magazine.
Workers Win, Too
Workers themselves benefit, too, from the flexibility and autonomy freelancing or contract work provides, says Joshua Boltuch, CEO of FancyHands, a virtual personal assistant platform that employs an on-demand workforce.
"For our assistants, FancyHands lets them choose both how and when they want to work. We have thousands of assistants currently. Some are stay-at-home parents, college students, retirees or part-time workers who want to expand their experience, their interests and develop different skillsets," says Boltuch.
Founded in 2010, FancyHands offers both business and consumer-facing services, and though the company does not disclose exactly how many assistants are currently working for them, Boltuch does say that there are "thousands," and that for more than half of those assistants, FancyHands work is their primary source of income.
"The Affordable Care Act, in particular, has liberated many in the workforce from being stuck in jobs they hate simply because of benefits," says Peter Harrison, CEO of hourly employment recruiting and hiring service Snagajob.com.
While FancyHands focuses on the virtual space, Snagajob has been a leader in the on-site, hourly employment market for call centers, restaurants, retail, hospitality and the medical care industry since 2000, but the last few years have seen demand for the site's services skyrocket.
"The hourly employment market is quickly becoming a major employer in and of itself -- a more flexible approach to working and allocating employees' time. We have more than half a million jobs available on our site, we add 15,000 more every day. We're seeing growth of 30 percent year-over-year and that is accelerating," says Harrison.
The Dark Side
While an hourly workforce is a boon for cost-conscious businesses and for certain demographics, for others, it can be problematic. Quality control is a major issue for some companies, as is the case with New York-based MyClean, which found, as The Economist reports, that "it got better customer ratings if it used permanent staff." And, of course, there are the numerous complaints about Uber's pricing, labor practices and drivers themselves.
To avoid this problem, companies like FancyHands use a pre-screening process and workers must be trained and mentored by existing employees, according to Boltuch.
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