3 Reasons You Need to Hire Part-Time Employees--and 3 Big Mistakes You're Making When You Do It

Until last summer, the only employee of personal injury lawyer Christopher Earley was a permanent part-time paralegal who worked 25 hours a week. When Earley decided to recruit an attorney who could work 20 hours a week, one candidate stood out. But there was a snag. Because of her extensive experience, that attorney wanted a higher salary than Earley had initially offered. He eventually agreed to give her a percentage of the contingency fees--an idea suggested by the applicant.
"Finding people who are not in it just to expand their résumés can be challenging, so if you find a good candidate, you and the interviewee need to think outside the box," he says. Sharing fees works well for both Earley and his new hire. Earley adds, "You can nuance a part-time position by offering, say, perks or an opportunity to work remotely to mutually benefit both parties." Part time can mean fully engaged, if you do it right.

1. Scale and Sale

If your company's strategy is to grow as rapidly as possible and then get bought by the highest bidder, efficient completion of projects becomes crucial. "Our liquid workforce and gig economy, in the form of ever-increasing numbers of contract workers and freelancers, make it easier for startups to scale, all the while keeping the company lean and relatively free of payrollees," says Louis Hyman, associate professor of economic history at Cornell University and author of Temp: How American Work, American Business, and the American Dream Became Temporary. "This type of fluidity--achieved by not hiring permanent part-time or even full-time employees--valorizes the founder as a 'company of one,' something funders find attractive."
Entrepreneurs who are in it for the long haul, however, may prefer to rely on a core group of team members, not all of whom are full time, to provide continuity and stability. Although "permanent part-time employees"--people who are on the company payroll and work a set number of hours--may sound like a throwback to an earlier era, it's an appealing option for many.

2. Keeping It Legal

Employers often hire permanent part-timers to avoid including them in company-paid health insurance plans, thereby making them an attractive proposition for budget-constrained firms. "However, many employers don't realize hiring permanent part-timers does come with the same legal requirements as permanent full-time employees," says Matthew Struck, a founding partner at Treadstone Risk Management, in Morristown, New Jersey.
Keep in mind that anyone who works an average of 30 hours a week or 130 hours a month is deemed full time by the IRS. Most states, he explains, mandate that all permanent part-timers be covered by workers' compensation--part of your property and casualty insurance. "Not disclosing part-time workers at the time you purchase this insurance may constitute insurance fraud and, in certain cases, may lead to fines, penalties, and even criminal charges," says Struck.
Confidentiality issues may also pose a concern. Permanent part-timers with highly specialized expertise, say, in finance or business law, are privy to significant amounts of confidential information about your company, which they may intentionally or inadvertently disclose to competitors, cautions Ken Taber, an employment attorney at Pillsbury Winthrop Shaw Pittman in New York City. To prevent any diversion of business by such part-timers, Taber advises having them sign an agreement that, if violated, may result in legal action by the entrepreneur. "Business owners can readily secure such nondisclosure-agreement templates from their legal advisers," he says.

3. Your Hidden Assets

One of the biggest mistakes companies make is viewing permanent part-timers as placeholders until full-timers come on board. DeeAnn Sims, owner and creative director of SPBX, a branding and public relations company in Los Angeles that focuses on non-profits and social enterprises, has a staff of three part-timers, each working three days a week. She regularly rewards their special contributions with a gift certificate, or contributes to an in-house personal education fund they can use for professional-development seminars. "These perks add value and help part-timers feel invested in your company," says Sims, noting that many entrepreneurs incorrectly assume that team-building presupposes having a staff only of full-timers.
"A wise entrepreneur sees the potential and growability of every job function and every hire, including part-time ones," says Carl J. Schramm, innovation and inter­national economics professor at Syracuse University and the author of Burn the Business Plan: What Great Entrepreneurs Really Do. Schramm cites an example of a college student whose part-time task is to take items he packs to the post office. Business owners typically err, Schramm notes, by communicating to this type of employee only the nuts-and-bolts nature of the task. However, by letting a new hire know you're open to fresh ideas and initiative, this person might suggest money- and time-saving shipping options, or have you more efficiently schedule his out-of-office activities when the postal lines are shorter.
Schramm advises entrepreneurs to constantly educate their employees and not marginalize those you may feel are expendable: "By putting part-timers into experimental situations that you have little knowledge about, they can educate you in growing your business."

Part Time, by Choice

The Great Recession turned a lot of people into part-timers--involuntarily. But that tide has turned. Even as labor markets tighten--a trend that should hold for the year-- the Bureau of Labor Statistics says the number of people voluntarily seeking part-time work is stable.

Finding the Part-Time Edge

1. Flexibility: "Entrepreneurs may feel stigmatized or diminished when financial issues keep them from adding full-time staff, but this blinds them to the advantages of permanent part-timers," says Baba Prasad, president and CEO of Vivékin Group, a management consultancy in Durham, North Carolina, and author of Nimble: Make Yourself and Your Company Resilient in the Age of Constant Change. Part-timers help ensure "operational agility," says Prasad, noting that in workplaces where some tasks are interchangeable, two part-timers--instead of one full-timer--can prevent workflow interruption through easy handoffs.
2. Specialization: It's often a challenge finding a full-timer with the diverse expertise that can make your business grow, so it's worth considering hiring several part-timers, each with a highly defined skill set, such as B2B sales or social media savvy, says Prasad. It's not uncommon for owners to water down their initial wish list and then settle for a full-timer with an incomplete mix of qualifications. In contrast, part-time workers--especially retirees--may have spent entire careers in the very specialized areas you need.
3. Audition: Eager part-timers who've proved themselves have saved you a job search. Jeff Rizzo, co-owner and co-founder of the consumer-product review company RizKnows, based in Reno, Nevada, made his second hire a part-timer. When his budget allowed, he was able to offer that person a full-time position. "It was a great trial period for both worker and employer," he says. To date, three of seven on RizKnows's staff have made that transition.

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