Part time employee benefits: three reasons to extend perks to staff with non-standard hours

One of the key areas in our industry that gets very little attention is that of part time employee benefits. Part time and casual workers have long been features of every developed labor market in the world, and their numbers have been growing in the past decade – often at the expense of full-time employment. The problem here is, offering employee benefits to part time workers can be tricky. Requirements can often depend on the labor laws of the countries you operate in, as well as the type of company you are.

This week, Pacific Prime discusses the ins and outs of part time employee benefits, along with reasons why extending benefits to part timers can be a great move.

Part time employees – understanding the numbers

According to OECD data, part timers make up an average of 16.7% of the member countries’ labor market. The Netherlands (37%), Switzerland (27%), and Australia (25%) take the top spot for highest part time sectors, while Bulgaria (1%), Macedonia (3%), and Romania (3%) have the lowest. The French workforce is made up of 14.2% part timers, and Canada, Germany, and the United Kingdom have non-full time sectors between 20-25%.

Source: OECD

Men are far less likely than women to be engaged in part time work, and older workers make up a significant portion of the “flexible” workforce. Across the OECD, the average portion of men in non-full time roles comes to 9.4% – but for women it’s 25.7%. In the UK, a Unison study of local government and school support workers found that a significant 72% of their total part time workers were over the age of 40 (and almost 40% of those were over 50).

In terms of pay, Glassdoor shows the average base pay per year for part timers in the United States is USD 24,500, compared with USD 41,245 for full time employees. For the UK, median hourly earnings of part time employees rose from GBP 7.00 in 2006 to GBP 8.88 in 2016, while the full time median rose GBP 11.03 to 13.59 in the same period. Even in countries often viewed with progressive and generous social programs, Danish women are still found to earn less than men – and those with children even less so.  

The reality of the job for non-full time employees

A SEEK Australia article outlined that most people working in part time positions did so by choice. Key reasons for working part time included needing time to balance duties at home (30%), allowing for study outside of work (16%), and parental commitments (13%). Unfortunately, the part time sector still suffers from discrimination and negative perceptions in the workplace, with full-time colleagues and managers believing their part time counterparts:

• Aren’t as readily available as full-time workers (47%)
• Lack commitment to their company (38%)
• Are a burden to their full-time colleagues because of their “absence” (36%)
• Aren’t working if they’re “not seen in the office” (35%)

This lack of value from the rest of the labor market has led to more than half (58%) of part time workers believing that their positions were career limiting. In fact, part time workers often experience gaps in total compensation that their full time counterparts don’t. This can include restricted or no access to paid time off and sick days, insurance benefits, and less employment protections.

Some of this can stem from legislative minimum working requirements that part time workers can fall short of being eligible for. Other reasons are simply because part time employee benefits haven’t really been “a thing” employers have had to consider before. The time is coming, however, for the conversation to be had in non-traditional part time sectors.

The rise of part time roles in professional services

Many countries have seen an increase in part time positions. For example, according to figures from the Australian Bureau of Statistics (ABS), the country’s rate of part time jobs in the labor market has risen 3.1% between 1966 and 2016. Despite still being at the lower end of the increase, part time roles in the professional and technical services sector rose 3.9% over that same time (compared with 6.6% for finance and insurance services, and 18% in the administrative and support services sector).

Source: ABS

One interesting thing about the increase in part time positions is that we are not seeing increases in lower-ranked positions (e.g., entry and mid level). In fact, we are also seeing an increase in the number of part time senior positions. Last year, Timewise published a list of senior professional service individuals who worked less than full time.

This included the Trend Director of Amazon in Europe working 4 days per week, the R&D Director of Coty Luxury working 3.5 days, and a co-led Head of External Affairs role where two women worked 3 days per week for Age UK. Laurie Padua, Global Director of Technology at Alexander Mann Solutions, leads a team of 45 senior colleagues over a 3-day week, and manages clients including EY and Citi.

Charlotte Gascoigne at the Cranfield School of Management says that, in the Netherlands, part time work for professionals and managers is the new normal. Similar to the SEEK Australia article, people are seeking out non-traditional working patterns in more professional roles in order to rebalance that work-life seesaw, while developments in technology have supported the work “anywhere, anytime” opportunities that are disrupting traditional role expectations, and rigid schedules.

Offering part time employee benefits: Why should we?

With many industries seeing an increase in part time positions now would be a good time to recognize and reward your part time employees with employee benefits. Of course, doing so will largely depend on your budget, your company goals and values, and the type of work your non-full time staff carry out for your business. Regardless of these considerations, here are some reasons you might want to consider extending part time employee benefits out to those workers.

1. Workers value benefits and perks

Another Glassdoor survey found that nearly 4-in-5 employees in the US would prefer new or additional benefits over a pay increase. The most desired included health insurance (40%), paid time off (37%), and a performance bonus (35%). Women also favored new perks higher than men, with 82% preferring employers offer better benefits before pay increases (compared with 76% of men).

For part time workers, providing them with valuable perks can have the added bonus of creating a perception of equality with full-time staff. Granting health insurance, for example, to a return-to-work mother can often be more valuable to her and her family for its ability to reduce household spending on medical care.

2. Benefits engender employee loyalty

The definition of workplace loyalty is quickly becoming more transactional. Millennials, in particular, carry a mentality of “You pay me for X, I do X, we are even”, and the completion of that role to their best of their ability being a demonstration of “loyalty”. As such, this new generation are three times more likely to have changed jobs in past 12 months.

In Canada, only 54% of Millennials held full time positions. Some of those that had chosen part time roles did so to be able to continue to enjoy leisure and travel activities in their “off work” time, however many found the minimal access to health benefits or sick leave restrictive on just how adventurous they could be. Offering part time employee benefits could be seen by some employers as an opportunity to keep hard working young part timers looking for a role to work hard at, whilst having the flexibility to play hard.

3. Addressing the gender pay gap

Women earning less than men in the workplace has been a long and ongoing debate for many decades, however we’re only just now becoming more sophisticated in how we have the discussion. Starting this year, the UK has made it compulsory for employers of more than 250 staff to report their gender pay gap. While there are a range of talking points to be had around this topic, offering part time employee benefits can be seen as one way to addressing the challenge.

Because we know that the majority of part time workers are women, and that part time staff often receive less in hourly wages than their full time counterparts, any move to open access and increase compensation via employee benefits for part time staff would go some way to address gender pay gaps.

Opening senior and leadership roles to part time or time-sharing arrangements can also help, with female representation in top management adding USD 42 million in firm value to Standard & Poor’s composite 1,500 list. Providing part time employee benefits to those senior positions can make it easier for women to balance their work and home life.

What else should I know about offering part time employee benefits?

There are two things to keep in mind if you have part time employees; the first is whether or not their work arrangements meet your local legal requirements for being eligible for certain workplace benefits, and the second is about how part time workers are treated by employee benefits and wellness program providers.

More specifically for global companies and professional service firms with overseas offices, understanding your legal obligations to employees in each country can be tricky. What might be law in one country may be unheard of in another. In Dubai, all workers are required by the Dubai Health Authority to be covered by health insurance. For US-based workers, the ACA and the Fair Labor Standards Act determines what a part timer may or may not be entitled to.

Paying for part time employee benefits, generally and unfortunately, does not come with a discount. Despite working reduced hours or days for your company, granting them access to employee benefits means doing so at the same price as full time staff. This may seem unfair if comparing time worked versus benefits received, but it may simply be a case that your company has decided to value their contribution equally to those of full time staff.

How can I get assistance with weighing up offering part time employee benefits?

Your decision to grant perks to your part time staff will be one you’ll need to make yourself, but having an experienced employee benefits broker can help you do so with confidence. Our consultants and advisors have an intimate understanding of how employee benefits and wellness programs work, have access to current and accurate multi-jurisdictional knowledge, and can provide you with the best analysis of your benefit options in the market.

The team has an unparalleled market advantage as we work with a range of industries, with groups as small as start ups to multinational professional service firms. We have a presence in most major expat locations, six global offices in total, and are partnered with many of the biggest insurance and benefits players in the market.

If your desire is to stay competitive in the market whilst ensuring your employee benefits plan remains sustainable, Pacific Prime is the insurance partner you want in your corner. Contact our team to arrange a meeting, or visit our website to learn more about how we simplify insurance.