How SMBs Are Protecting Margins Without Cutting Back

As the owner of a small- to medium-sized business (SMB), at some point this year you’ll likely find yourself asking: Should I hire, or keep pushing forward with a lean team?

So you’ll do the math — salary, benefits, taxes — and decide now’s not the time. For every problem a new hire solves, they don’t outweigh the costs. Especially not in an economy that feels like it’s softening — what happens in a few months, when costs have gone up, consumer spending has gone down, and there’s no longer enough work to justify the expense of that new hire?

That moment — the stage of the almost-hire — is becoming more common. Waiting feels responsible. Sensible, even.

Waiting avoids a new fixed cost, but it doesn’t solve the need to increase capacity now.

The unintended costs of waiting

When hiring stalls, most business leaders tell themselves it’s temporary. Waiting feels safer than adding a new fixed cost.

But the cost of waiting still creeps in.

For David Wrench, founder of datajoi, the cost showed up in how thinly he was stretched. “I had a few junior developers who were, and are, great,” Wrench said. “But I needed someone who could help them level up and make real architectural decisions.”

That person turned out to be Dmytro Serdiuk, a senior systems architect Wrench brought on through a short-term contract. “Dmytro’s ability to come on and see me struggling, and with his experience say, ‘Oh, this is what you need to do,’ was great,” Wrench said. “It allowed me to let go.”

In the following video, Wrench describes how waiting to add support affected datajoi.

See the full case study

Before that support arrived, Wrench had stepped into the gap himself, while also fundraising and pushing the product forward. “Honestly, without Dmytro, I may have continued struggling — or even sunk,” he said.

That pattern of trying to make do with the team you already have is common among small- and medium-sized businesses (SMBs). That’s when backlogs linger, leaders spend time on work that isn’t theirs, and projects slow down because no one has the capacity to fully own them.

None of those costs show up as a line item, but they shrink margins all the same.

Why this isn’t just a hiring problem

It’s easy to frame this as a hiring problem. There’s more work than the team can handle, but adding headcount feels like too big a bet.

What SMBs are really wrestling with is bigger than that: How to move work forward without taking on long-term costs they may not be ready to carry.

Brent Schuck, director of marketing at Demco Products, ran into that exact problem while modernizing his team’s tech stack. He explained:

“We needed specialists to set up and configure a new tech stack including Hubspot, AWS, and SharePoint. Hiring employees wasn’t the answer. We weren’t going to find someone who could wear 10 hats for 10 hours a week at first, and then maybe only 10 hours a month later. And if we added a full-time employee, we’d have to figure out how to keep them busy for 40 hours a week after the projects were done.”

Instead of adding more fixed costs, teams like Demco’s are being more strategic and choosing costs that are flexible. They bring in freelance specialists for specific work, only for as long as they’re needed. The work moves forward without tying the budget to a single full-time hire.

To be clear, the goal isn’t to replace employees. Freelancers are brought in to support teams when the work outpaces what it makes sense to commit to through full-time hiring.

When flexibility starts to break down

Using freelance talent occasionally is easy. To rely on it over time means finding the right people quickly and rehiring trusted talent. And that takes effort. So does paying them promptly and managing multiple projects at once. 

When those processes aren’t efficient, flexibility starts to feel like friction. And you can end up spending more time managing the work than you do moving the business forward. 

That’s where structure matters. Flexibility only holds up when there’s a system behind it.

Teams that rely on freelance specialists look for ways to streamline how they move from identifying a need to bringing in the right talent. And how they keep quality consistent as priorities shift.

Solutions like Upwork Business Plus are built for this stage — bridging the gap between the almost-hiring stage and the getting-work-done stage — when flexible hiring becomes part of how a business operates day to day.

For Schuck, having such a system made a noticeable difference. “It’s amazing,” he said. “A couple of clicks, a couple of video calls, and someone’s on your team within days. That kind of agility lets us compete like we’re a much larger company.”

Protecting margins without standing still

For many SMBs, protecting margins comes down to how costs behave over time. Fixed costs lock decisions in place. Flexible costs adjust with the business.

That difference matters when demand shifts, priorities change, or growth comes in uneven waves. It’s why more teams are finding ways to add capacity without committing to costs they can’t easily unwind, like hiring a full-time employee.

When teams can add and remove capacity as needed, fixed costs become flexible. That gives businesses room to scale work up or down, shift spend, and stay agile until long-term roles make sense.

‍See how real-world SMBs are using flexible talent to keep work moving.