Here  at ZenPayroll, we care a lot about how compensation is done, and the effect  compensation can have on the relationship between employers and employees.  Using the employment data we have as a payroll provider, we decided to look at  whether the 1099 economy, which has garnered quite a bit of media attention recently, is really growing as fast as people think.
The  short answer is that over the past year, the ratio of independent contractors  to full-time employees has meaningfully risen among small and medium-sized  businesses in states and major metropolitan areas across the country.
The  nature of work is changing given the decline of lifetime employment. Today,  very few people plan to work for the same company their whole life, and people  often have several jobs at one time. As a result, and as shown by ZenPayroll's  data, more small business owners are employing contractors as a part of running  their business. There are a number of other reasons for this general trend  toward a more flexible work structure.

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First,  employees want to have more choices when it comes to where and when they work,  but also who they work for. Millennials in particular are frequently asking  themselves whether they're fulfilled by what they're doing. Jess Ostroff,  founder of a full-service virtual assistance agency called Don't Panic Management,  said that some of her contractors in New York City are aspiring actors, and  they do contract work to support themselves as they pursue longer-term passions  and ambitions. 
Others  do contract work purely for the flexibility -- one of the first contractors to  work for the Don't Panic Management team is a mother of three who has her own  cooking show and also runs a photography business. She supplements those jobs  by contracting so she can earn money while spending time with her family.
For  some entrepreneurs, hiring independent contractors is key to their business.  Lina Pakrosnyte is the founder and owner of UrbanLeash, a professional pet care company based in  Chicago. There are four full-time employees on her team, but she works with  over 30 contractors for tech and marketing help, as well as dog walking and cat  sitting. With the high turnover in pet care professionals, Lina needs to keep  finding contractors to serve her UrbanLeash clients.
I've  also talked to many small business owners who prefer having a remote or  distributed workforce. Adam McLane, founder of a youth ministry resources  company called The Youth  Cartel, is one example. Because his business requires expert writers and  public speakers, he works with over a hundred contractors from all over the  country to produce content and events.
After  the economic downturn several years ago, many people who lost their full-time  jobs found contract and part-time work as a way to fill that gap. When  times are uncertain, employers also tend to prefer contractors. With the  government promising to crack down on employers who misclassify their workers  as contractors rather than employees, it's important for business owners to  know the distinction between the two. We published a post recently on the  ZenPayroll blog to help small business owners avoid  misclassifying their workers. 
The  future isn't set in stone, and there will be ongoing debate about the  responsibility employers have towards their workers, whether they are employees  or contractors. It is important to care of your people if  you want to attract and retain great talent.