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Casual, Part-time, Full-time, Fixed Term - what is best for your business?

Updated: Oct 21, 2023

When it comes to building a successful business, one of the most crucial decisions you'll have to make is determining the type of employees you need. The workforce today offers a variety of employment options, including casual, part-time, and full-time positions. Each option comes with its own set of benefits and considerations. In this article, we will explore the advantages and disadvantages of hiring casual, part-time, and full-time employees, helping you make an informed decision that aligns with your business goals and needs.

I’ve also created a FREE checklist to take you through the 10 steps of defining the right employment type for your business.

Casual Employees

Casual employees are those who work irregular hours on an as-needed basis. They may be called in when there's a spike in demand or to cover for other employees' absences. Hiring casual employees can be beneficial for businesses in terms of flexibility and cost savings.

Flexibility: With casual employees, you have the flexibility to scale your workforce up or down according to demand. This can be particularly advantageous for businesses with seasonal fluctuations or unpredictable workloads. For example, a retail store might hire casual employees during the holiday season to handle increased foot traffic.

Cost Savings: Casual employees are typically paid on an hourly basis and may not be entitled to (most) leave entitlement. This arrangement can help businesses save on labour costs, especially if they don't require a full-time workforce throughout the year. A small business that experiences occasional surges in orders might find it cost-effective to hire casual workers during those busy periods.

However, there are some considerations to keep in mind. Casual employees may lack the same level of commitment and familiarity with your business as full-time or part-time employees. They may also have limited availability, depending on their other commitments, which can pose challenges during peak periods or when there are sudden staffing requirements. Also, casual employees’ minimum rate attracts a 25% casual loading to compensate for the lack of benefits and entitlements. This additional cost factor should be taken into account when budgeting for casual employees.

Part-time Employees

Part-time employees work fewer hours than full-time employees, and are on a regular schedule. They work a fixed number of days or hours per week. Hiring part-time employees offers a balance between flexibility and consistent availability.

Flexibility with Consistency: Part-time employees provide consistent coverage during specific shifts or days each week. This ensures that your business has a stable workforce during those periods. For instance, a restaurant may hire part-time servers to cover evening shifts on weekends.

Cost-Effective: Compared to full-time employees, most part-time employees entitlements are proportionate to the hours they are hired for. This can help manage labour costs while still maintaining a regular workforce. A startup company with limited resources might find it financially advantageous to hire part-time workers for various roles.

On the flip side, there are a few considerations when it comes to part-time employees. Their availability may be limited due to other commitments, such as education or another job. This may require more planning and coordination to ensure adequate coverage. Additionally, part-time employees may not have the same level of engagement or investment in the business as full-time employees, which can impact their commitment and willingness to go the extra mile when needed.

Full-time Employees

Full-time employees work an average of 38 hours per week and they're usually employed on a permanent basis or on a fixed term contract (more on that below). A full-time employee is entitled to paid leave, including:annual leave, sick and carer’s leave, family and domestic violence leave. They are usually entitled to written notice when their employment ends, or payment instead of notice.

Hiring full-time employees can bring commitment, reliability, and consistent availability to your business.

Commitment and Loyalty: Full-time employees are more likely to be committed to your business and its long-term goals and strategy. They are likely to have a deeper understanding of your operations, resulting in higher productivity and reliability. For example, a marketing agency might hire full-time graphic designers to ensure their creative team is fully invested in the company's projects.

Consistent Availability: Full-time employees can provide consistent coverage throughout the week, ensuring a stable and reliable workforce. This can be particularly important for businesses with regular customer demands or tight deadlines. A manufacturing company may rely on full-time employees to maintain uninterrupted production.

However, there are some considerations to keep in mind with full-time employees. Hiring full-time employees comes with increased costs, including salary and other entitlements. For small businesses or those with fluctuating workloads, this can be a significant financial commitment. Additionally, full-time employees may require fixed schedules, limiting your ability to adjust staffing levels based on fluctuations in demand.

Fixed Term Employees

Another option to consider when building your workforce is hiring fixed term employees. Fixed term employment refers to a contractual arrangement where an employee is hired for a specific period of time, with a defined end date or upon completion of a particular project or task. They can work full time or part-time hours. Here are some advantages and considerations of hiring fixed term employees:

Project-Based Flexibility: Fixed term employees can be valuable for businesses that have specific projects or tasks that require additional support for a predetermined duration. For example, a software development company may hire fixed term employees to work on a particular software upgrade or implementation project. This allows businesses to have the necessary expertise and resources without committing to long-term employment.

Seasonal Demands: Similar to casual employees, fixed term employees can be beneficial for handling seasonal fluctuations in demand. If your business experiences peak periods during specific times of the year, such as holiday seasons or summer vacations, hiring fixed term employees can help you meet the increased workload without the long-term commitment.

Specialised Skills: Hiring fixed term employees can be advantageous when you require specialised skills or expertise for a specific project or task. Instead of investing in training existing employees or hiring permanent staff, you can bring in professionals with the required skills for a fixed duration. This can be cost-effective and efficient, especially for businesses that need temporary access to specialised knowledge.

In this case, what you need to consider will be different. Firstly, it is important to clearly define the terms and conditions of the employment contract, including the duration of the fixed term and the scope of work. This helps to manage expectations and avoid any potential disputes or confusion. Additionally, fixed term employees may have less attachment or loyalty to the organisation compared to permanent employees, as they are aware that their employment will end at a certain date. This may affect their level of commitment and engagement with the business.

Be aware that the new bill “Secure Jobs, Better Pay” It will be limiting the use of fixed term contracts to minimise job insecurity for employees when they are used for the same role over an extended period, or where employees are subject to rolling contract renewals for jobs that would otherwise be permanent. Changes will take effect from 6th December 2023.

Deciding between casual, part-time, full-time employees or fixed term employees depends on various factors specific to your business's needs and goals. Casual employees offer flexibility and cost savings, part-time employees provide a balance between flexibility and consistency, and full-time employees bring commitment and reliability. Consider the nature of your business, the level of predictability in demand, and your budget constraints when making your decision. It's also worth exploring a combination of employment types to maximise the advantages each category offers. Ultimately, the right choice will align with your business's unique requirements, helping you build a capable and efficient workforce that drives your success.

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