December 26, 2017

The Ins and Outs of Part-time Employee Benefits

Written by
Kaylee Riley

Offering benefits to full-time employees is typical. But what about part-time employees? Should you give them benefits too?

Before you decide whether or not to give benefits to your part-time employees, consider the pros and cons of offering them.

The Pros

Stronger candidate pool

Part-time employee benefits can improve your recruitment efforts by making working for your business desirable. You will attract more candidates, meaning you’ll have a larger pool to choose from.

Even if you cannot offer competitive wages, low-cost employee benefits can boost your business in the eyes of job seekers. For example, some workers might value a flexible work schedule more than greater wages. Fifty-five percent of employees are at least somewhat likely to accept a job with slightly lower pay if it has better benefits than another job.

More employee engagement

ALSO READ: 19 Really Obvious Signs Your Employees are Unhappy

Benefits might boost morale among part-time employees. Sometimes, part-time employees might feel like they aren’t connected to the rest of your team because they aren’t present as often. But, you can use benefits to show these employees that they are cared for and valued. You can even use benefits, such as company-sponsored events, to build comradery.

Some employee benefits might increase worker productivity. Fifty-one percent of employees agree that benefits impact their productivity. When employees aren’t distracted by health, financial, or family issues, they can focus on work.    

They can even increase attendance. Forty-three percent of employees say benefits impact their number of absences. You might offer personal time off so employees can schedule time off in advance instead of calling in at the last minute.

Increased retention

In one survey, 60 percent of employees said a benefits package is important to their employer loyalty. The same survey found that 36 percent of employees are more likely to stay at their jobs if their employers improve their benefits packages.

Sometimes, full-time employees might want to reduce their hours voluntarily. They might want to slow down before full retirement or have more time to care for children. If these employees lose their benefits when they become part-time, they might seek new jobs. You can encourage these workers to stay with you by letting them keep their benefits.

The cons

Costly for small businesses

Employee benefits can be expensive to provide. Depending on the type, you might need to pay setup fees, contributions, and taxes.   

Small businesses, in particular, are often at a disadvantage when shopping for packages. Small businesses may not have as many available plan options, and what is available might be more expensive than what a larger business would pay.

Plan administration takes both time and money. Someone must make sure all requirements are met and paperwork is filed, which could mean legal and personnel costs. The more you offer, the more time and money it takes to maintain the plans.

Caution around compliance

When you offer benefits to part-time employees, you will come across legal compliance concerns. Federal and state governments may dictate which part-time employees can be eligible. Making a compliance mistake might result in legal fees and other fines.

Using technology to help

If you do choose to offer benefits to part-time employees, software can make the process easier for employers, HR, and employees.

You must keep employees informed about relevant updates. Employee portal software is a great way to communicate benefits information to your employees. You can use online portal software to share details of who qualifies and how to take advantage. You can also post updates, newsletters, forms, and FAQs.

When you use an online portal software, employees can access their information at work and home. This is helpful to employees who want to discuss the options with a spouse, compare plans, or do some research.

Your business might participate in an annual open enrollment period for some offerings, such as health insurance. During this time, employees will opt into or waive certain benefits. You can use benefits administration software to make this process easier.

You’ll also decrease HR paperwork. Employees don’t fill out paper forms and give them to HR. Because everything is online, HR employees don’t have to copy, scan, or transcribe documents. They can easily send information to benefits providers or download information.

Your takeaway

If you think the pros of giving benefits to part-time employees outweigh the cons, make sure you check out your software options. Software might even help reduce the cons of offering benefits.

HR Software can speed up the time it takes to share documents and process paperwork. It can point you in the right direction with compliance issues.


Kaylee Riley is a content writer for Patriot Software Company, the parent company of Patriot Software, LLC and Top Echelon, LLC. Kaylee writes about payroll, accounting, software for recruiting companies, and other small business topics.