Nearly half of America’s small business employers have already figured out something the rest are still sleeping on: you don’t need a full-time hire to get full-time results.
The SBE Council’s October 2026 Small Business Check Up Survey found that 47% of small business employers use independent contractors to support their operations. That’s not a gig economy side note. That’s a structural workforce shift happening right now on Main Street, and if you’re still thinking about contractors as a fallback plan rather than a growth strategy, you’re behind.
The Real Story Here
Independent contracting isn’t a fringe arrangement anymore. The MBO Partners September 2026 State of Independence report tracked 74.9 million Americans engaged in independent work in 2026 — a record. Since 2020, the number of full-time independent professionals has grown by 114%. An estimated 5.8 million independent contractors now earn more than $100,000 annually, nearly double the 2020 figure.
And here’s the part that matters for small business owners: 78% of independent contractors plan to remain independent or build a larger business. These aren’t desperate job seekers waiting for a W-2 offer. They are deliberate entrepreneurs building their own books of business. When you hire one, you’re not getting someone’s backup option. You’re getting someone’s A-game — scoped, focused, and without the overhead of a full-time employee.
SBE Council President Karen Kerrigan, who authored the report, frames it cleanly: “For small businesses, independent contractors are a powerful force multiplier. They provide access to expertise and capabilities that smaller firms may not need on a full-time basis.”
That language — “force multiplier” — is the right way to think about it. You’re not filling a seat. You’re activating a capability you couldn’t otherwise afford to keep on payroll.
By the Numbers
- 47% of small business employers currently use independent contractors (SBE Council October 2026 Small Business Check Up Survey)
- 74.9 million Americans engaged in independent work in 2026, a new record (MBO Partners State of Independence, September 2026)
- 114% increase in full-time independent professionals since 2020
- 5.8 million independent contractors now earning $100K+ annually, nearly double the 2020 figure
- 78% of independent contractors plan to stay independent or grow
- 80% report that AI complements their work and improves productivity
- 1 in 3 independent professionals now serve customers outside the United States
That last number is significant: globalization of the talent pool means you’re no longer limited to contractors within driving distance. A specialist in your exact niche — whether that’s e-commerce photography, SaaS copywriting, or industrial equipment maintenance scheduling — is accessible and, increasingly, competing for your project.
The Hustler’s Library Take
Here’s what the SBE Council report doesn’t say explicitly but the data makes obvious: the independent contractor economy and the AI productivity wave are compounding each other in a way that dramatically expands what’s available to small businesses.
Contractors are already using AI to do more, faster. That 80% figure — the share saying AI improves their productivity — means the specialist you’re hiring in 2026 is delivering more output per dollar than the same person would have in 2022. Your $3,000 copywriting project might now represent work that would have cost $6,000 in time and deliverables just four years ago.
The model is shifting toward what you could call “scoped expertise” — bringing in a contractor who is deeply specialized, AI-augmented, and globally mobile. The businesses winning with this model aren’t just saving money on benefits and overhead. They’re delegating more strategically and staying lean enough to pivot faster than larger competitors with bloated headcount.
There’s also a regulatory moment worth watching: the U.S. Department of Labor submitted a new independent contractor classification rule for White House review on September 28, with publication targeted for October. DOL’s proposed rule would restore a cleaner, two-factor “economic realities” test — making it more straightforward to classify legitimate independent contractor relationships. If it publishes as expected, it reduces legal ambiguity for small businesses that have been cautious about contractor engagements under the Biden-era rule.
In contrast, New Jersey just imposed a strict three-part ABC test effective October 1 that makes independent contractor status significantly harder to establish. If you operate in New Jersey, that changes your calculus immediately.
What You Should Do
1. Audit your current hiring pipeline for contractor-ready roles. Before your next full-time hire, ask: is this a recurring 40-hour-per-week need, or is it a project-based capability I need on demand? Roles in marketing, design, finance, IT, and specialized operations are prime candidates. The biggest hiring mistakes happen when owners default to full-time employees for work that doesn’t require daily presence.
2. Get your paperwork right before you engage. Independent contractor relationships require a proper written agreement and a W-9 form on file before work begins. Given the DOL rule in flux and state-level variance (New Jersey is a live example), the agreements you use need to clearly document the economic realities of the relationship: who sets the schedule, who provides tools, who controls the work output. If you’re doing this without a written contract, you’re creating legal exposure. The six agreements every small business should have in writing include contractor agreements for exactly this reason.
3. Build a contractor bench, not just a contractor rolodex. The businesses getting the most from this model aren’t scrambling to find someone when a need arises. They maintain relationships with 3-5 trusted contractors in key disciplines — even between projects — so they can activate quickly when opportunity or capacity pressure hits. Think of it like a second-string roster: you’re not paying them to sit, but you’ve vetted them, they know your business, and when you need them they can step in without a 30-day onboarding ramp.
The 47% figure is a baseline, not a ceiling. As the independent workforce continues to grow and the talent pool deepens, the strategic advantage of this model only compounds — for the businesses that build the systems to use it well.
Source: SBE Council October 2026 Small Business Check Up Survey | MBO Partners September 2026 State of Independence Report | U.S. Department of Labor Independent Contractor Proposed Rule (2026)
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