As the economic and personal realities of workers change, more are choosing part-time over full-time work. What does this mean for the employee benefits marketplace?
The reasons that certain organizations and sectors employ higher proportions of part-time staff are wide and varied. Some industries rely on part-time employees because of the nature or seasonality of the work they are needed for. While some organizations accommodate part-time employees because they are the right people for the job, others need part-time employees because they are either unable to fill a full-time position, or don’t need to.
At a time when people are battling with the higher cost of living and increasing healthcare costs, we look into the demographics of part-time workers and how well served they are by the employee benefits marketplace.
Detail behind the numbers
Of the 27.5 million part-time employees – generally defined as working fewer than 35 hours per week – the large majority (63%) are women and by age, 40% are aged between 25 and 54.1
With 32% of part-time workers aged 16-24, and 28% aged over 55, the data suggest that people are more likely to opt for part-time hours in their younger or older working years as it provides an opportunity for them to supplement their income while studying, or in retirement years.2
In terms of industry, leisure and hospitality is out in front with 46% of workers being part-time, however in terms of numbers, the education and health services industries have the highest number of part-time workers. Other industries with high numbers of part-time employees include the wholesale and retail trade.3
27.5 million part-time employees in the U.S.
Distribution by gender
Distribution by age
Smaller companies from a variety of industries also value part-time employees or independent contractors, particularly if they need specialized help for a small period of time and do not have the budget for a full-time employee. For example, they may need a marketing specialist to support a product launch. Hiring someone part-time can provide a more affordable lifeline to a young business.
Reasons for and implications of part-time work
More than three quarters of part-time workers chose this type of employment for noneconomic reasons, according to the U.S. Bureau of Labor Statistics in the most recent published data.1
The number one reason why people choose to work part-time is so they can also attend school or a training program. Other noneconomic reasons for choosing to work part-time include taking care of children or other relatives, and post-Covid life re-evaluation.4
Working part-time isn’t a choice for everyone; some part-time employees want full-time work, but are unable to get it. In the hospitality industry, for example, work can be seasonal, and some organizations may cut staff hours for economic reasons. Because of this, part-time workers can struggle to make ends meet. According to the National Women’s Law Center, part-time workers are three times more likely than full-time workers to hold low paid jobs and one in 10 part-time workers live in poverty.4 At this level, part-time workers are less likely to be able to save for the future and more likely to be living paycheck to paycheck. In addition to this, part-time employees are often penalized in terms not just of pay, but also benefits, stability and advancement opportunities.
Changing work trends
The number of employees working part-time has fluctuated considerably in the last 10 years, and particularly since the start of the Covid-19 pandemic. Peaking at 27.6 million in 2013 and again in 2016, the number declined to 26.9 million in 2019 before plummeting in 2020 to 24.6 million. By 2022, it was back up to 26 million, reaching 27.5 million this year.5
The significant decrease is likely the result of pandemic-related shutdowns, which hit the big part-time markets of hospitality, leisure and retail particularly hard. These industries have since been hiring again.
Value in benefits for part-time employees
Offering tailored benefits to part-time employees, who are often excluded from traditional benefit options, provides employers a way to create equity in their benefit plans and can be a tangible way to improve diversity, equity and inclusion outcomes by organizations.
There are many reasons that organizations should provide part-time employees with benefit options. Among them are:
Attract and retain employees:
Staff turnover, whether full or part-time, is detrimental to an organization, costing both time and money. This issue can become particularly acute if an organization only has the budget for part-time staff and therefore benefits packages can also be a powerful tool for attracting and retaining employees by providing them with additional help and support around their health, wellbeing and financial needs.
Improve employee wellbeing:
Benefit plans for part-time workers can be customized to fit the needs of specific employee populations and offer options that include physician visits, emergency room visits, inpatient stays, outpatient benefits, prescription discounts, mental health services, telemedicine, network discounts and more. Companies that provide these benefits are helping to provide employees with an environment that helps promote productivity and wellbeing.
Offer additional financial protection:
Working part-time can mean less income and these workers may therefore be less able to handle an unplanned expense associated with an illness or injury. Benefits can help offset part-time employees’ out-of-pocket costs for medical expenses related to covered accidents and serious illnesses.
As specialists in providing supplemental and voluntary benefits to US businesses, especially in sectors with non-traditional and part-time staffing needs, we work closely with our producer partners to develop plans that are cost effective, flexible and provide ease of administration for our customers and their employees, whether part-time or full-time.