For all businesses, the need to have professional and top-quality staff working for them is vital. Your staff are the face of your business and provide the service to your customers. This will have a direct impact on your company finances and whether you will be successful in the long term. As we all know, looking after your finances is key in both business and personal life. While full-time, permanent staff are still the default for many companies, there are other options that could help you work more efficiently and save money.
What are the different employment options you could consider?
Full-time, permanent staff
There are over 30 million people in employment across the UK – the majority of these are full-time, permanent staff. Permanent staff will give you a solid, stable base to build on and allow you to generate in-house expertise as you go along. You will also have greater control to an extent over this kind of worker as you set their schedule and directly manage their daily work.
However, there are also some drawbacks. Chief among these is cost! When you factor in sick pay, annual leave entitlement and annual salary, it can all add up. This is especially true if you have lots of permanent staff on your books who do not work to full capacity all year. Permanent staff are also less flexible in terms of controlling staff levels and do not offer businesses the same agility as other employment types.
Part-time, permanent staff
The next very common employment type within business is part-time staff who are employed on a permanent basis. This offers broadly the same in terms of pros and cons as their full-time equivalents. Naturally, employing part-time staff will be less costly than full-time staff as they will work fewer hours. Part-time staff can also be more flexible sometimes due to not working all day each week. This can prove valuable if you need short-term cover or a free person to help out at an event.
Many part-time staff will take the role as they have other commitments in their life to prevent full-time work though. This means that they may not always be able to help out at short notice as above. Some businesses can find part-time staff less committed or engaged with their role also as they are not there as much.
Slightly different from full-time or part-time, there is fixed-term, which is still a popular way to employ staff. These are good to use if you have a new role that you think will need a permanent person to fulfil but are not sure yet. If it goes as you think, then you can take them on permanently at the end of the term, but if not, then you do not have to renew it.
In terms of drawbacks, the major one is that fixed-term staff are still eligible for all the statuary benefits that permanent staff are. This has seen many companies fill short-term projects or roles with contractors who are effectively self-employed.
A very popular type of employment for many businesses to use now is contracting.
This essentially uses self-employed external people to complete a set project for you or work for a specified amount of time. Contractors are not classed as employees of your company, which is a great benefit to many businesses. This means that you save money on not having to pay sick leave or provide annual leave while also not having to deal with their tax or NI contributions each month. Using a contractor is also a quick, simple way to access specialist skills for a one-off job or to hire someone to give cover for absent permanent staff.
The only real drawback with using contractors is that processing their timesheets and payroll can be messy. It gets really time-consuming if you have more than a few to sort out! Trusting that the contractor you use is being fully compliant with their PAYE contributions each month is also a headache. For this reason, it is best to only use contractors who go through an umbrella company to handle their payroll and HMRC responsibilities.
Pick the right employment type for your business
Which kind of employee you hire largely depends on your business’s needs. It is generally wise to have a base of full-time permanent staff for stability, but beyond that, it is what works best for you. Many UK businesses now will head down the contracting route for the flexibility, control and cost reductions it brings. Whatever decision you make, be sure to think it through carefully first.