Pros and Cons of Hiring Full Time or Part Time Employees

Should a company hire Full Time or Part Time employees? Operational costs are a factor in running a company. Profits depend on the bottom line and streamlining operations will certainly help. Human Resource (HR) professionals and PEO personnel will take the cost of hiring and training employees in to account.

Beside the daunting task of finding and hiring the right people for the company and the job at hand, employers need to consider how to cut acquisition costs per employee without sacrificing the quality of service and production that their customers are used to. Small employers often underestimate these costs.

Reducing Costs

An often suggested way to reduce overall costs is to hire more part time employees and contractors. HR professionals, PEOs, business owners, and managers need to fully understand the trade-offs, advantages, and disadvantages of hiring a full time staff or utilizing more part timers and contractors. A contractor is not an employee. See this article about Employees vs. Contractors.

Part time employment and contract work saw an increase after the 2009 banking failure. Companies began keeping employment rosters to a minimum. Hiring part time employees and contractors meant big savings in taxes and benefits.

Part Time Employees – Pro and Cons

What constitutes a Part Time employee?

Most companies define part time employees as anyone working 35 hour or less per week. These workers don’t usually qualify for benefits like health insurance, paid vacation time or 401K plans.

Pros:

Lower Costs to Hire and Train
One perceived benefit of using part time employees is the lower costs for hiring and training them than for full-time workers. Is this always the case though?

Flexibility
Working fewer hours would seem to offer more flexibility regarding scheduling. In actual practice, results vary. If a position requires more than the usual 8-hour shift, hiring two part time people for 5 or 6 hours each can solve the problem. For example: Walt Disney World in Orlando hires far more part time workers than full time for various reasons and with great savings to the organization. Considering that eight hours in a hot costume in the Florida sun is not a good idea, by splitting those shifts up, everyone benefits.

Cost of Benefits
Many companies (Disney, larger airlines, for example) realize that part time employees are not eligible for most benefits, including health insurance. This is a controversial area but certainly offers significant cost savings to the company.

Diversity of Skills
If a company hires one full timer but wants to try out some other personal that might bring added skills, they can hire a few people for shorter hours and see how their skills might fit in and benefit the company without a big commitment. In the short term, this may work.

Cons:
Commitment to the Job
Full time employees are much more likely to consider their job a career. They have more long-term goals and seek to learn and grow with the company, perhaps with the hope of advancing over time. They’re more invested in the future of the company.

Flight Risk
Part time employees are more likely to come and go, can be less motivated and harder to train for future endeavors. A fair bit of time and money is invested in hiring and training, only to see that person move on to another position that offers them more hours, money, or benefits.

About Contractors

Contractors aren’t employees of the company. They are retained for one specific job or skill they bring for a project or for a length of time to cover a specific need. They may be retained by more than one client at a time or have a limited time frame that they are planning to work on any one task. they are not eligible for benefits, unemployment, or payroll security. Contractors are paid by invoicing the companies they work for on an agreed upon schedule and they pay their own insurance and taxes.

The pros and cons for part timers and contractors appear to be similar. Certainly, most contractors are not invested in the success of a company.

A PEO Can Help With Employment Decisions

Getting the help and expert opinion of HR professionals can help determine the options of hiring full time or part time employees. EmployerNomics is available to assist with these decisions and work out plans to seek out, hire, and train the right people for the right jobs.