With the new constraints and guidelines being placed on businesses to offer higher ranges of health benefits and to offer various forms of healthcare benefits, the idea of keeping part-time employment may actually cost businesses more. For this reason, many businesses are looking at the aspect and reality of offering a fewer number of employees and making the employees that they keep full-time. The question remains if part-time employment may actually be going to the wayside. The following are a few reasons why part-time employment may cost more for businesses.
Healthcare is one the main reasons that businesses are looking towards letting go of part-time employment and hiring full-time employees. For example, a part-time employee will not be able to work a full eight hour day or longer. This means that it could take several part-time employees to make up what one full-time employee could do. This change alone would offer the business a cost-effective solution. However, this is compounded when healthcare is added to this. If healthcare can't be offered for every employee on staff the cost of running a business can increase dramatically.
If a business can reduce the number of individuals they have employees by making the employees full-time only, letting go of part-time employees and only having to pay for the small amount of full-time employees they keep on then not only does the cost-effective the show but the healthcare costs are reduced. Companies such as Papa John's pizza company have actually utilized the healthcare reasoning for the reason that they will have to let go many part-time employees in the first and latter months of 2013.
The overall cost for having a part-time employee versus a full-time employee may not be evident until you look at the number of individuals on payroll. For example, many businesses find that it takes 2 to 3 part-time employees to make up what one full-time employee could do. Two part-time employees equal the same salary as one full-time employee. However, if you need to have a third part-time employee to do the job of one full-time employee then you are paying at least a third more out-of-pocket. If a business can reduce their employee payroll by a third or more they can actually reduce their payroll costs by half or more. This realization has made several businesses choose to go on a smaller amount of payroll and ploy ease on full-time salaries rather than expanding to several part-time employees.
Flexibility of Full-Time Employees Versus Part-Time Employees
One of the ways part-time employees can cost more is through the lack of flexibility of many part-time employees. For example, a part-time employee may hold down positions at other jobs, college or have other responsibilities outside of the business. For a full-time employee being flexible with the hours is a little easier. One of the biggest flexibility points that is a cost-effective saving for business is to move some of their employees to a freelance position. For a full-time employee this may cut the costs drastically. However, for part-time employees or several part-time employees the movement to a freelance at home-based position can actually cost more for the company than last. The training for several part-time employees would cost more workforce time and payroll time that the training for 1 to 2 full-time employees were moving to work-at-home option.
Overall, part-time employees can cost a third or more for a business than just having a well-rounded group of full-time employees it is dedicated to the business.