The 6 Most Common Types of Employees (+What To Consider When Hiring)
If you’re looking to bring on employees, you probably already know you have several options when it comes to the types of employees you could consider hiring. With many different employee types to choose from and each with their own pros and cons for both you and your workers, it can be difficult to make a decision. So, how do you choose the best fit for your organization? We’ll break down the key differences here.
In this article, we’ll explain the 6 most common employee types, their potential advantages and disadvantages, considerations you’ll need to keep in mind when making hiring decisions, and factors that may impact the onboarding of the different employee types. After reading this, you’ll have the information you need to make the best hiring decisions for your company.
What are the different employee types?
As you start evaluating potential new hires for your organization, here are the six most common employee types to consider.
- Full-time Employees
- Part-time Employees
- Seasonal and Temporary Employees
- Per Diem
A full-time worker is one that meets your required number of hours to be considered full time. In many companies, that’s 35 or 40 hours a week but you can set a different threshold. For instance, you may decide that you’ll require only 32 hours to be considered full time. Whatever you choose, you’ll just need to make sure that the same threshold applies to all employees.
When it comes to their pay, full-time employees can be either salaried or hourly.
Pros and Cons
For employees, the upside of being full time is that they are eligible for the employee benefits you offer, such as health insurance, retirement plans, and paid time off. These may or may not be available to other types of employees and can be a differentiator when a worker is evaluating their job options.
As an employer, you’ll also reap the benefits of full-time employees in several ways. These workers may feel more secure in their employment and satisfied since they’ll have access to workplace perks, which can translate into increased loyalty. In addition, with benefits like health insurance or financial wellness offerings easing their stress, full-time workers may be more productive and focused on work. Lastly, you’ll have more predictability in your business operations in areas such as scheduling and consistency in workflow and your workforce.
The downside is that these workers will cost you more because of benefit-related expenses. Plus, these employees may not be cost effective to have on the payroll when workload or output decreases.
A part-time employee is one that works fewer than the threshold you decide on to qualify as a full-time worker. So, if your company establishes that employees must work 35 hours to be considered full time, a part-time worker would be one who works less than that.
Generally speaking, part-time workers are paid on an hourly basis; however, you may decide to offer them a salary instead. We’ll talk about the impact this decision may have in a bit. In addition, these types of employees typically have fewer company benefits than full-time workers, although you can decide to make these employees eligible for more.
Pros and Cons
Part-time employees often want the flexibility their hours afford to be able to balance their time at work with other commitments or interests, such as their family, hobbies, or school. The downside for those who want steady hours is that they may not be able to get the schedule they want.
For your company, the biggest advantage of hiring part-time workers is that you can save on the costs of employee benefits, unless you’re required to offer them such as health insurance, which we’ll talk about later. You’ll also have more flexibility in scheduling so, for example, you won’t have to guarantee a certain number of hours each week.
As for potential drawbacks of this employee type, because part-time employees only work occasionally, they may lack repetition in their roles, which could lead to higher error rates or inefficiencies in work processes.
Seasonal and Temporary Employees
These workers are usually hired for a set period of time based on your company’s needs. For example, you may hire seasonal employees during spikes in work such as around the holidays. Or you may need temporary employees if you have a one-time project to complete or need to fill gaps in your workforce due to an employee taking leave or terminating employment. Either way, you can hire these types of employees on either a part- or full-time basis, and may choose to hire them directly or go through a staffing agency.
Pros and Cons
Many workers who fill seasonal or temporary roles like the opportunity to get added income without a long-term commitment or full-time schedule. Others view this type of employment as a chance to test out different roles or companies they may want to consider for full-time employment in the future.
The downside for seasonal and temporary workers is that they likely won’t have access to employee benefits. And, if they’re looking for more hours, they may not have the option to get the schedule they want.
As an employer, the primary benefit of hiring seasonal or temporary employees is that they afford you the most flexibility to increase or decrease your workforce based on your company’s needs, which allows you to control your labor expenses. However, the potential disadvantage of this approach is that you likely won’t have the same employees available each time you need to hire so you’ll have to invest in training every time you bring someone on. And, since these employees aren’t long term, they won’t have the same level of knowledge about your company and processes as those who work year round.
An intern is typically a student or recent graduate you bring on to gain hands-on skills in a supervised work experience. They may work in the summer or during the academic year. Depending on whether they’re seeking college credit, you may or may not have to have more structure to your intern’s learning experience.
Pros and Cons
For an intern, the opportunity to work for a company can give them the real-world experience they seek to put the principles they’ve learned in their coursework into action. They’ll also be able to list their job and responsibilities on their resume, making them more attractive candidates to future employers. As for potential disadvantages for interns, one could be that the positions may be unpaid or not pay as much as equivalent full-time positions.
As an employer, hiring interns can help you access extra help to pick up tasks, easing the burden on your regular staff. Internships are also a good way to identify prospective full-time employees since they’ll already know your business, work, and culture. Lastly, younger workers fresh from school often have learned the newest best practices and can contribute to your organization’s innovation.
There are also some potential drawbacks to be aware of with interns. First, if you hire an intern for work that an employee would be typically paid to do, you’ll need to pay them. In addition, interns will require time on your part to both create a formal program and provide the onboarding experience to make the internships successful. And, like other types of temporary workers, they’ll only be with you for a short time, so you’ll have to continually recruit, train, and manage new interns.
A per diem employee is one that you hire on an as-needed basis. So, instead of having a consistent role with your company, they will work for you on a daily basis at an agreed upon day rate. A common example of a per diem employee is a traveling nurse.
Pros and Cons
Like other temporary workers, per diem employees have the benefit of being able to decide if, when, and where they want to work. This employee type may also be able to realize an increase in their hourly pay compared to what they would receive otherwise. On the other hand, there’s no guarantee of work so this type of employment may not be ideal for those who are looking to pick up hours.
For you as the employer, the upside of hiring per diem workers is that you can add employees to your team with little to no notice. And it can be less expensive to do so since you don’t have to offer them benefits. Per diem employees are also a good way to test if a worker could be a good fit for your company on a full-time basis.
One potential downside of per diem workers is that their availability can be unpredictable. In addition, you’ll need to make sure you correctly classify these employees to avoid compliance concerns.
What do I need to consider when hiring different types of employees?
In addition to the different employee types available, you’ll also want to consider several other factors that may impact your decision to bring on a particular employee. These include:
- Employee Classification: As you evaluate your options, keep in mind that under the Fair Labor Standards Act (FLSA), you’ll need to make sure you correctly classify workers as exempt or non-exempt. The Department of Labor provides tests you can use to determine exempt versus non-exempt status. Most hourly workers – who can be either part or full time – are classified as non-exempt under the FLSA. As a result, they’ll be entitled to minimum wage and other worker protections like overtime.
- Hours Worked: Depending on the employee type you hire, you’ll need to pay close attention to hours worked to stay compliant with employment regulations. For example, if you have a non-exempt employee, you’ll need to make sure you calculate any overtime for hours worked over 40 or whatever threshold you set for full-time status.
- Benefits: As you consider what type of worker to bring on, it’s important to remember that benefits may be required. The ACA requires employers with 50 full-time employees or 50 full-time equivalents to provide healthcare benefits to their employees for 30 or more regularly worked hours within a workweek. In addition, if you offer a 401(k) plan, long-term, part-time workers may be eligible to participate.
Tips for Hiring and Onboarding All Types of Employees
No matter what employee type you plan to bring on, it’s important to have a process in place that can help you find, recruit, and hire the best-fit workers. The last step in an effective hiring process is onboarding. Having a process for this stage as well is crucial to set your workers up for success by giving them everything they need to reach maximum performance in their new roles as quickly as possible. Our guide to creating an employee onboarding process outlines the key components to include in yours.
While these guides can provide you with a good foundation for hiring and onboarding processes for your company, you may not have the resources or time in house to manage these tasks. If you’d like to learn about how Complete Payroll Solutions can partner with you to bring on the right employees, visit our dedicated talent management page to learn about the solutions we offer.