Should You Offer Benefits to Part Time and Contract Workers?

Employers who hire part time and contract workers usually appreciate the contribution these employees make and the revue they generate for the company. But that doesn’t always mean that employers can afford to add contract workers to their group health plans. At the same time, contract workers are not bound by full time commitments and can easily abandon or distance themselves from employers who don’t offer benefits in favor of employers who do. When contract workers leave, their skills and contributions leave with them.

So high turnover among contract employees makes it impractical to offer benefits, but the lack of benefits can encourage high turnover among contract employees. What’s a growing company to do?

The answer lies within each individual relationship between the company and a specific worker or specific position. Before you decide to offer benefits to a contract employee, ask yourself a few questions. First, how transferable are the skills that the employee provides? How much in-house training have you invested in him or her, and how complex was the hiring process that brought her on board? If her skills are unique, her other clients are competing for her time, and she’ll be difficult and expensive to replace, consider an offer of benefits as a long term cost-saving measure. In this case, turnover represents a greater expense than the cost of adding her to your health plan.

Offering benefits might be especially valuable for young companies or growing firms that hope to transition contract workers into eventual full time positions. If this describes you, consider the needs of the company above all else. Extended over the long term, the retention of a skilled, dedicated contract employee may far exceed the short term risk of an offer of benefits.

On the other hand, if employees for a certain position join and leave the company at a high rate, contract terms are short, skills are transferable, and each engagement involves minimal training and investment, think twice before you make an offer beyond a straightforward salary. The effort and expense may outweigh the value, both for the employee and for you.