Part Time, Full Time, or Contractor? Weighing the Pros and Cons for HR Managers
Human resource professionals must determine the best combination of workers for their teams.
According to the Workforce Productivity Report (2016), only 31% of business leaders believe their company is as productive as it should be.1 To fill the gap, many human resource managers are turning to independent contractors or freelancers. The same report cites that nearly all companies (96%) use some type of contract labor—but how much of the workload should be outsourced to nonemployees? And how much should fall on part-time or full-time personnel? Often it’s up to human resource professionals to make those staffing decisions, based on the company’s specific needs, and decision-making often comes down to financial concerns and practical needs.
The Affordable Care Act (ACA) defines full-time employment as at least 30 hours per week, or 130 hours per month.2 But that number is not a legal requirement—companies have the flexibility to determine what constitutes full-time employment, as long as they apply the guidelines consistently within their organization. Full-time employees offer many advantages to companies. They give their entire attention to your organization and because they are salaried, you know exactly how much to budget each year for their retention. But if a company has 50 or more full-time personnel (or the equivalent, according to the ACA definition of a 30-hour work week), it must provide an employee-paid health plan or face a penalty from the U.S. government. On the other hand, a small business that offers a health plan to workers could receive tax credits.3
Employees who work less than 30 hours per week are typically termed part time. Most businesses pay their part-time employees by the hour, allowing for flexibility on both the worker’s and the employer’s side. Part-time workers might earn varying hourly rates depending on the type of tasks they perform, and they typically don’t receive paid time off, health insurance, or other benefits such as retirement plans. Hiring part-time employees can be a good option for seasonal or temporary needs—for example, when a construction company is starting work on a large building project but does not expect the labor needs to be long term.
Many companies, from small businesses to large corporations, hire contract workers to handle specialized projects. Contractors are paid by the hour or by the project, and employers are not required to withhold or cover payroll taxes as they do for full-time or part-time staff members. Knowledge-based contract workers, such as freelance designers, computer programmers, or writers, often work remotely, offering flexibility for companies with limited office space and the opportunity to choose from a larger pool of specialized workers.
In most companies, HR managers must work to find the perfect blend of full-time, part-time, and contract workers. If you’re interested in learning more about this and other factors in HR decision-making, consider pursuing a master’s in human resource management, which will prepare you to pursue professional certification with the Society for Human Resource Management (SHRM)—a valuable credential that will set give you a step up in the market.
Walden University is an accredited institution offering an MS in Human Resource Management degree program online. Expand your career options and earn your degree using a convenient, flexible learning platform that fits your busy life.
Walden University is accredited by The Higher Learning Commission, www.hlcommission.org.