The Gig Economy: How Small Businesses Can Benefit from Freelance Talent

More and more small businesses are entering the gig economy. Instead of traditional employment models, they prefer engaging freelance workers, contract workers, and other independent workers on a per-project, per-gig, or retainer basis.

Statista says that over 70 million U.S. workers will participate in freelance work in 2025, either as their primary job or alongside their full-time employment. That number is expected to increase to over 86 million — more than half the US workforce — by 2027.

For solopreneurs and small business owners, tapping into this talent pool offers a chance to reduce overhead costs while accessing a wide range of skill sets and pivoting based on market demands.

In this article, we’ll explore how small businesses can benefit from freelance talent, why it matters, and what to look out for.

Why the gig economy matters for small businesses

First, let’s talk about why the gig economy matters for your small business and your pocket.

1. Cost savings and overhead reduction

Hiring a full-time employee often means paying a salary plus benefits like health insurance, retirement contributions, social security, and paid time off. 

However, independent contractors handle their taxes, benefits, and office setup, slashing your payroll taxes and overhead costs.

This means:

• No office space or supplies: Freelance workers operate remotely, reducing rent, utilities, and office supplies expenses. If you’re a solopreneur or have a remote freelance team, you can avoid expensive corporate rent.
  
• Eliminate idle capacity: You only pay for billable hours, deliverables completed, or measured results, not for downtime between projects.
  
• No long-term commitments: You can engage contract workers for seasonal or one-off projects if you want to. No permanent headcount increases and no unnecessary costs. 

2. Access to specialized skills

Many small business owners struggle to hire permanent employees with niche or advanced skill sets, especially when those needs are rare. 

Tapping into the freelance talent pool means:

• Niche expertise: You can find skilled professionals for precise roles, from search engine optimization copywriters (SEO) to conversion rate optimization (CRO) specialists, or dedicated development team for your app or web development project.
  
• Wide variety of skills: Need someone who specializes in video thumbnails? A graphic designer, a developer, or a data analyst? Specialized independent contractors can fill these skill gaps quickly.
  
• Immediate availability: Avoid lengthy recruitment cycles. Depending on the skill and expertise, you can vet and onboard freelance workers within hours to a few days.
  

This model ensures you pay premium rates only when you truly need high-quality work, instead of maintaining a larger full-time workforce.

3. Flexibility and scalability

With the gig economy, you can scale your team dynamically based on your business and revenue targets. Here’s how:

• Busy seasons: If your business is seasonal, ramp up contract workers during product launches, holiday peaks, or special campaigns.
  
• Downturns: Reduce headcount or renegotiate deliverables when workloads dip, avoiding layoff costs and morale issues.
  
• Ongoing projects vs. one-off gigs: For special projects, like building and deploying a web service, you can opt for a one-off gig with milestones. For ongoing work, such as digital advertising or email list management, an ongoing retainer is typically the way to go to maximize revenue growth.
  
• Mid-term visibility: Traditional employment means looking ahead to the next 2 years to see if it’s worth hiring. In the gig economy, you can hire freelancers with just short-term or mid-term visibility. This allows you to stay lean and adapt to market conditions, especially if you’re testing various approaches or ideas.

Finding the right freelance talent

Let’s dive into how you can find and choose the talent that’s right for you and your business — fast.

Leveraging digital platforms

Here are a few of the top digital platforms that can match you with vetted freelance workers:

• Upwork: Connects you with thousands of professionals worldwide. You can hire freelancers for one-time projects, milestones, or on an hourly basis.
  
• Fiverr: Offers quick gigs across hundreds of categories. It’s usually better for very specific one-time tasks, like website design.
  
• Toptal: Vets the top 3% of applicants, onboarding developers, project managers, and designers in under 48 hours.

You can also look out for talent on specialized sites or social media.

For example, if you’re looking for a media buyer, you can check out media buying groups on Facebook. Even if you don’t hire from there, you might find posts about the latest techniques or even some of the top courses or programs. This gives you an idea of what to look out for so you can choose the right talent for your budget.

When comparing freelancers, consider platform service fees, contractor ratings, and platform policies on dispute resolution and intellectual property rights. Don’t forget payment terms and late-fee clauses.

Well-written descriptions reduce misunderstandings, speed up proposal reviews, and yield higher-quality matches, helping small business owners maximize the benefits of freelance talent.

Onboarding fast for faster results

To capture the flexibility and cost advantages of the gig economy, you must onboard freelance workers quickly and efficiently, often within the first week.

This gives them everything they need to do the job and complete it on time. It also gives you the confidence and trust that they’re taking care of it, leaving you to focus on more critical tasks. During onboarding calls or kick-off meetings, using an AI note taking app can help automatically capture action points, ensuring alignment and saving time on follow-ups.

If you’re dealing with a professional on a complex or long-term project, or maybe a domain that you’re not super familiar with, you may experience reverse-onboarding. This is when the independent contractor tells you exactly what information and access they need. They may also share their workflow so that you know what to expect and when. 

The best thing about reverse-onboarding is that it builds mutual trust and alignment from day 1. 

If you’ve ever worked with freelancers before (especially the cheaper ones), you have probably picked up on a few mistakes that have cost you time and money, and for them, any recurring projects.

Communication breakdown is arguably one of the top reasons these mistakes can happen. The good thing is: there are ways to minimize and pre-empt this. 

One of these is digitally onboarding freelancers on your (or a mutual) internal communication software. This makes it easy to quickly onboard freelance workers and get them up to speed with the workings of your business and what they need to know for their job. It also makes it easier to communicate with remote freelancers and synchronize updates.

Secure collaboration that protects your bottom line

Depending on what you’re hiring for, you may need to share passwords and platforms or environments.

For example, if you hire a funnel strategist, you’ll need to give them access to your funnel software and real-time analytics. There are two ways to do this:

• User control: If the application allows you, add the contractor as a new user with the privileges they need. This is the safest option as it limits access and human error. It also prevents them from accessing sensitive information, such as your billing settings.
  
• Password sharing: If the application doesn’t provide any user control or you don’t have the budget to pay for new user accounts, you can share your passwords. To do this safely, use tools such as LastPass, which give access to your account without the contractor knowing your password. 

You’ll likely need a better solution for complex environments: Cloud Infrastructure Entitlement Management (CIEM).

CIEM helps businesses manage data governance and who has access to what in cloud environments like AWS, Azure, or GCP. 

For small businesses that rely on freelancers—developers, designers, marketers—this is essential for keeping cloud resources secure without overcomplicating things. You may need to give a freelance developer access to a staging server or a marketing consultant access to analytics dashboards. 

CIEM allows you to grant precise, least-privilege access so they only see or modify what they need—and nothing more. Because freelancers often work on a contractual or short-term basis, you can easily set time-bound access or automate access revocation once the project ends.

Quality without micromanagement

One of the biggest dilemmas in traditional hiring is:

• Hire a junior for cheap and train them, but it will take months for them to perform at 100%.
  
• Hire an expert so they can perform their best immediately, but you have to budget for hundreds of thousands per year in salary and benefits.

That’s not the case with the gig economy, especially when you hire a professional.

Since you’re finding the right talent with the right skills for the right job, that talent is a potential expert without the hundreds of thousands in budgeting.

It also means a lot less micromanagement, especially when there are bi-directional feedback loops.

Here are a few things you can set up to minimize micromanagement and maximize their output and your free time:

• Key performance indicators (KPIs): Map out targets or minimums as acceptance criteria. For example, a 10% minimum open rate for cold outreach emails.
  
• Milestones: List key deliverables with timelines, especially if your project is time-bound.
  
• Short feedback cycles: Set up regular short chats or calls to get in sync. You can also use inline commenting in Google Docs, version control in Git, or task status flows in project management tools.
  
• Build a repeatable process: Document successful project workflows in standard operating procedures (SOPs) or templates for future hires. This can reduce onboarding time and improve the quality assurance. It could be as simple as a Google Doc and having all the necessary files in one place, categorized in different folders: images, testimonials, videos, etc.

The gig economy: A two-way street

Even with perfect paperwork, a freelance engagement can go sideways without mutual respect and clear boundaries:

• Stick to the agreed scope: Repeatedly adding tasks without adjusting payment or timeline frustrates freelancers and can lead to subpar results.
  
• Remember, they’re not employees: Freelance workers juggle multiple assignments—late responses or last-minute changes on your end can derail their schedules and sour the relationship.
  
• Communication is a two-way Street: Silence or vague feedback from you will result in guesswork, errors, and churned deliverables.
  
• Mutual respect: Just like you want on-time deliverables, make sure you pay the contractors on time and within reasonable payment terms. Not paying, paying late, or setting 60-day payment terms will only cause frustration and push them to replace you with another client. Paying late can also lead to legal troubles, such as New York’s Freelance Isn’t Free Act, which can penalize you 200% for underpayment, plus lawyers and court costs.
  
• Mutual dependence: Remember, the freelancer performs expertise you lack, but they rely on you for fair compensation and referenceable work. If they do a great job, reward them with a video testimonial. It helps them get noticed, get paid, and earn more respect.

Conclusion

The gig economy is great for small business owners. It gives them access to specialized skills, flexibility to scale, and massive cost savings compared to traditional hiring.

If you’re looking to outsource your least-rewarding tasks, hiring or partnering with freelance workers could be worth exploring.

Would you like a simplified way to track freelance spend and overhead cost? Try our software for free.