Xan Hood's small clothing company relies on seven workers -- but not a single one is on his full-time payroll.

He's got two artists, two accountants, a photographer, a web consultant and a customer service representative -- and they are all freelancers.

If they were on Hood's payroll, their combined salary would probably have cost him $300,000 last year. Instead, he paid closer to $30,000.

His cash-strapped startup, Buffalo Jackson in Charlotte, N.C., doesn't need them working full-time. At this point, there just isn't enough work to do.

"We need to be efficient and resourceful with the little we have," Hood said.

Relying on freelancers saves him time and money in all sorts of ways. There's less government paperwork. He doesn't have to pay the federal payroll tax that funds Social Security and Medicare, 7.7 percent of workers' wages.

And there are no worries about North Carolina's unemployment insurance rate, which ranges between 1.2 percent and 6.8 percent of employee salaries. Even with just a few employees, these taxes can quickly add up to thousands of dollars a year.

"That's how we've kept our company lean and mean," Hood said. "I'm watching every dollar coming in or out of the company."

Buffalo Jackson, which designs clothes and contracts with manufacturers to produce them, is expanding quickly and might make $1 million in revenue this year. But Hood, who pays himself a small salary, still says his enterprise is in "survival mode."

Buffalo Jackson is part of the boom in temporary work. After all, why take on the cost and risk of hiring an employee if you can get one without strings attached?