Question: My business is having a growth spurt. I could add an employee, but what about a part-timer? It seems like many people are approaching me wanting part-time work. What are some things to know about using part-time employees?
Answer: This is a big issue right now, for several reasons. The people approaching you for part-time work may be doing so because the job market is so weak. It's possible they actually want a full-time job, but may view part-time as a toe in the door, or better than nothing. Let's talk about this.
First, there is a form of part-time work that's been around for decades, with pretty good success. It's called "job sharing" and it's just like it sounds. Typically two people with similar training share a forty-hour job. This has proven to be very successful in jobs like office receptionists, airline flight attendants and cashiers. Other jobs are less suitable for sharing, especially where tasks or projects need more coordination and communication.
Also, consider some alternatives to hiring a part-timer, like using a temporary job agency. In this arrangement, you "rent" a worker who is not technically your employee. Of course you'll pay a higher hourly rate. The employment service has to cover wages, payroll taxes, benefits and other costs, plus make a profit on the deal. You are free to use the worker on a short or long-term basis. A plus: you might find someone who's a really good fit with your needs, and hire them on.
Another common alternative is to outsource some of your functions to another business. For example, a retailer might use an outside bookkeeping firm. Or, a small manufacturing company might send out some parts to a paint shop, instead of staffing up.
A third option is to use outside, independent contractors. Warning! Be very careful about this. Both the IRS and our Washington Department of Labor and Industries have cracked down recently. Abuses were rampant. Here's the short story: regulatory agencies have very specific criteria for who can be classified as an independent contractor and thus not an employee. For example: a person who works at your business site; is there the hours you designate; uses your facility and a work station-this person is substantially under your control. He or she is an employee, no matter what you call the arrangement. On the other hand, someone who has a valid business license; does similar work for others; and keeps their own book -may be a legitimate independent contractor.
There are other reasons this is a problem. What if someone you call an independent contractor is injured on the job? They won't have industrial insurance coverage, because you haven't paid the premiums. If Labor and Industries deems them to be an employee, you're in big trouble.
The whole "part time" issue has big changes coming, especially in 2014. As the federal Affordable Care Act ("Obamacare") phases in, larger companies will have to provide healthcare coverage for workers, or face government penalties. But the requirement exempts employees who work less than 30 hours per week. There is some thought that large employers might cut weekly shifts back to 29 hours. Here's the deal: several very large employers, including Darden Restaurants, Inc., (owner of Olive Garden, Red Lobster, LongHorn Steakhouse and four other chains) are looking at this right now. Darden has over 180,000 employees, so as far as restaurants go, you could say the stakes are big. They would hire more people, but at reduced weekly hours each.
Currently, at least seven major employers offer some form of healthcare benefits for part-timers. Locally, these include Target, Starbucks, Home Depot, UPS and Costco.
Some reasons favoring hiring part-timers:
The part-time labor pool in this area is large. There are many workers available for entry-level jobs at minimum wage ($9.04 per hour).
Part-timers are great for seasonal businesses or for peak times, like a restaurant's lunch rush.
You have more flexibility in scheduling them.
They may be available on short notice to fill in, for example if another employee is sick.
They need substantially more supervision and communication.
They miss out on the "social glue" of the company and often have little commitment or dedication to your business mission.
Expect fairly high turnover.
They often leave with short or no notice.
So, bottom line for now: if you want to try part-time employees, plan on managing them very closely. Also, be sure you stay competitive with other employment opportunities.
To learn more about managing cash flow, and other small business matters, contact SCORE, "Counselors to America's Small Business." SCORE is a nonprofit nationwide organization with more than 13,000 volunteer business counselors who provide free, confidential business counseling and low-cost training workshops to small business owners. Call the local SCORE chapter at 360-685-4259 to schedule an appointment. For details about the organization,visit SCORE.org.
Ask SCORE is prepared for The Bellingham Herald by Bob Dahms, a business counselor with the Bellingham chapter of SCORE. Submit questions for this column to firstname.lastname@example.org.