blog

Comparing Labor Costs: Full-Time vs. Part-Time vs. Contractors

Written by Insight Solutions Group | Jun 27, 2025 12:45:00 PM

Understanding Full-Time Employment Costs

Full-time employment typically involves a comprehensive compensation package, including salary, benefits, paid leave, and other perks. According to the Bureau of Labor Statistics, the average cost of full-time employee benefits in 2023 was 31% of total compensation. These costs are significant but often come with increased employee loyalty and productivity. Businesses must consider these expenses when planning their workforce budget.

Evaluating Part-Time Employment Expenses

Part-time employment offers flexibility and cost savings for employers. Part-time workers generally do not receive the same benefits as full-time employees, which can significantly reduce labor costs. A survey by the National Federation of Independent Business found that 42% of small businesses employ part-time workers primarily to control expenses. This option is ideal for companies with fluctuating demand.

Contractor Costs and Flexibility

Contractors provide businesses with specialized skills temporarily. The cost of hiring contractors can be higher per hour compared to full-time employees, but companies save on benefits and long-term commitments. According to a study by Deloitte, 30% of companies reported reduced labor costs by utilizing contractors for short-term projects. Contractors are particularly valuable for businesses needing expertise without a permanent hire.

Benefits of Using a PEO

A Professional Employer Organization (PEO) can help manage employment costs across different types of workers. By partnering with a PEO, businesses can streamline HR functions and benefit from reduced administrative expenses. More information about PEOs can be found at insightsolutionsgroups.com.
  • Reduced administrative burden
  • Access to comprehensive benefits packages
  • Compliance with employment laws

Deciding the Right Mix for Your Business

Choosing the right mix of full-time, part-time, and contractors depends on the specific needs and goals of your business. Consider the following when making your decision:
  1. Evaluate your budget and financial projections.
  2. Analyze the skills required for your projects.
  3. Assess the flexibility needed for your workforce.
Each type of employment offers distinct advantages and challenges, and the optimal solution often involves a blend of all three.