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Permanents, casuals or contractors: what is the right mix?

Permanents, casuals or contractors: what is the right mix? (Last Updated On: June 2, 2016)

Every employer will be familiar with the difficult decision of deciding whether a permanent, casual or fixed term employee is the best fit for their business. While permanent staff may be the default option for most employers, having the right mix of employment types will provide a degree of flexibility, while also ensuring your business’s needs are met.

Employsure believes determining the right employment mix involves a sound understanding of the different types of employment available, knowing where in your business specialist skills are required, and forecasting the future needs of your workplace.

The basic employment types

By having a sound understanding of the different employment types available, the process of determining which the best is fit for your business becomes easier. Each type of employment has key characteristics which determine the minimum and maximum hours the employee can work, their leave entitlements and their right to unfair dismissal protection. These key characteristics are summarised below.

Permanent (full-time or part-time): the employee is engaged for set number of hours per week.

  • Full time is guaranteed at least 38 hours per week
  • Part time is guaranteed less than 38 hours per week
  • Works agreed hours
  • Entitled to paid leave (including annual, personal)
  • Entitled to unfair dismissal provisions after qualifying period

Fixed Term: employee is employed for a specific period of time or task

  • Can be engaged either as full time or part time
  • The hours of engagement are guaranteed
  • Entitled to paid leave
  • The engagement is terminated at the end of the specific period
  • Cannot claim unfair dismissal at the conclusion of their contract (but may be entitled to unfair dismissal if the employee works beyond the fixed contract date)

Casual: the employee is engaged under a new contract for each shift worked and there is no continuity of service.

  • No guarantee of hours
  • No obligation to be available for work
  • No right to paid leave, but may be entitled to unpaid leave, in some circumstances
  • Entitled to casual loading
  • Could access unfair dismissal, if regular and systematic

Where in your business are specialist skills required? An example.

Every business has the need for a staff member who is a specialist in their field. Generally these employees occupy a higher level of management than non-skilled employees as a result of having more training, experience or a larger skill set.

For example, a hair dressing salon would most likely have a senior hairdresser who would be a permanent employee with a high level of skills, training and experience whereas their front of house employee may be a casual.

Knowing where in your business the need for specialist skills resides will allow you to determine where casual or fixed term employees are a viable option. In the example that follows, the employee at the top of the hierarchy is required to possess specialist skills. This employee may be in a position of management and most likely a permanent employee, with the staff being managed requiring less skills and / or experience. For the non-specialist roles, other employment types are possible.
specialistThis reasoning can be applied to all organisation structures to determine where a permanent specialise skilled employee would be required, and where alternate types of employment would be possible.

Forecasting your business’s future needs

When determining the employment mix for your business, a level of forecasting of future business needs is also required, but not always easy to do. Do you require an employee to fill a long term role, or simply to cover a particularly busy period such as Christmas? Knowing how long you require an employee will point you in the direction of the best employment type option.

This level of forecasting, combined with whether you need require specialist skills, also drives thinking on the right mix of employment types, with the table below illustrating some ways of thinking about this.

 

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Having the right mix of employment types is beneficial to your business’s productivity, as it ensures all the company’s needs will be met. Knowing the different types of employments available and their associated obligations will also simplify the hiring process of new employees.

If you have any questions regarding the employment mix for your business and the different types of employment options available contact Employsure today on 1300 651 415. We can advise on all employment types, their obligations and entitlements.

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