A complete guide to the types of employment and employee categories

It is vital for Human Resources to have a thorough understanding of distinct types of employment such as apprenticeship, probationary employment, freelance work, etc. HR (Human Resources) is the core team that ensures efficient talent procurement in any company. Therefore, detailed employment-related information and employee categories help them streamline and enrich the decision-making process.

This guide offers an overview of employment, employment status, employee categories and more.

Out of the many people management responsibilities, fulfilling staffing needs is a highly crucial one for HR professionals. It is one of the reasons why understanding the types of employment is indispensable. It helps offer specific jobs and responsibilities to the right talent.

The staffing needs of the company get fulfilled through the different employment types listed in this section. The ultimate benefit of employment bifurcation is to cut additional costs and elevate profits.

Probationary employment

Probationary employment prevents companies from taking the risk of offering a permanent position to individuals before assessing their performance. This type of employment enables employers to make informed decisions to achieve long-term goals.

During the probation period, employers:

• Closely monitor and assess the probationary employees’ performance. The aim is to ensure that the employees are competent enough to handle a permanent position.
• May choose to reject probationary employees for valid reasons while adhering to legal mandates. Companies need to get probationary employees’ consent before extending the probation period.

The probation period is also known as the trial period. The general rule is that the probation period should not exceed six months when the candidate starts working in the company. After the period, the employer decides to retain or terminate an employee based on performance.

It is the HR’s responsibility to clarify probationary conditions in offer letters. The recruits’ understanding and consent are mandatory before they commence work.

Fixed-term employment

Fixed term employment involves contractual relations between the employee and employer. It is valid for a specific period. After the contract deadline, employees are automatically relieved from their services to the company.

Highlights of this type of employment:

• The contract specifies the working hours, wage structures, and time duration. The employment type is suitable in cases where the company wants individuals to work on specific time-bound projects.
• Fixed-term workers are the categories of employees who:
  • May work as part or full time and are entitled to the benefits as permanent employees. The latter may depend on pro-rata and employment duration.
  • Possess rights equivalent to the rights of permanent workers. However, these types of employees in a company are exempted from dismissal laws.
• Fixed-term employment allows companies to hire talent to step into the roles of professionals who may be on a long leave. The payout is fixed in advance and does not modify until the project ends and when the term expires.
• In a fixed employment contract, employers can terminate the contractual agreements with employees on justifiable grounds before expiry or agreed on a date.

Apprenticeship

Apprenticeship is a type of employment in which the employer provides an opportunity for apprentices to gain real work experience in a professional environment.

Apprentices are the types of employees in a company who join to learn and grab knowledge in the chosen field to shape their careers. They usually need regular instruction and direction to perform the duties assigned to them.

• They possess a similar set of rights to those given to other employees. The only exception is the employment type has a prep-planned end date.
• Hiring apprentices is an effective way to acquire fresh and productive talent to contribute to workforce quality. Moreover, HR does not have to make decisions in the areas of promotion, retention and demotion of trainees.
• It is the responsibility of the HR department to design training programs for apprentices. The aim is to infuse knowledge within the apprentices so that they can produce outcomes in a well and effective manner.

Permanent or regular employment

Permanent or regular roles are among the types of employment status that define permanent relationships between the employer and employee. There is no predetermined termination date and employees receive regular compensation including maximum benefits for their contribution to the company.

• A permanent employee usually works 35-40 hours per week. These employees are entitled to all the benefits valid under the Employment Act. They are also eligible to switch job designations within the organization.
• The company is liable to develop policies for leave limits, leave encashment, holidays and fringe benefits. Being a permanent employee instils job security among individuals and is a huge motivating factor.
• This type of employment is crucial to motivate individuals for engaging in current job duties rather than hunting for new jobs.

Casual employment

Casual employment is an employment classification that refers to situations when employment is activated at a need-based duration. It depends on fluctuating business requirements and there is no guarantee of constant inflow of projects.

Highlights of this type of employment:

• Employers look for professionals who can work for them temporarily, under unusual circumstances. For example, retail stores need extra workers on Christmas Eve to handle the increase in store visitors and provide sales assistance.
• Casual employees are not obligated to accept the work offered to them. They do not have a paid leave policy and are not obligated to serve a notice period before ending their tenure.
• Acquiring casual employees is one of the effective ways to meet suitable candidates who can serve the company for an extended period. These employees can become permanent to meet the long-term objectives of the business.
• Hiring casual employees may happen at any time of the year and for an unexpected duration. The company does not guarantee the amount of work handed over to casual employees in the future.
• Employers offer compensation only for the specific duties undertaken by the recruits. Therefore, there is no fixed long-term pay structure.

Seasonal employment

Seasonal employment refers to temporary employment opportunities offered to employees at the same time every year. The companies pay wages based on the contractual duration with the seasonal employees. The criteria for paying wages do not depend on the amount of work done. This type of employment is highly popular in industries like tourism, agriculture and hospitality.

Full and part-time employment

Employees work at least 30-40 hours (about 1 and a half days) per week in full-time employment. In part-time jobs, workers contribute a few hours to perform assigned tasks. Companies require full-time employees more as compared to part-time employees.

Part-time professionals comprise types of employees in the workplace who enjoy higher flexibility in working. In contrast, full-time professionals are those who work in nine-to-five and similar formats where employees must work and manage time schedules based on the company culture.

Freelance employment

Freelance employment, also known as self-employment, involves professionals selling their services by the hour/day, etc. instead of receiving a fixed salary. Companies contact freelancers who are specialized within specific fields and skill sets. The primary benefit of hiring freelancers is that the companies do not have to set up workspaces for them to provide their services.

Specializations like digital marketing, SEO, videography, financial advice, copywriting, editing, accounts and translation hugely benefit from hiring freelance employees. The latter are not entitled to company policies around leave and incentives.

Furthermore:

• Freelancers are the on-demand types of employees in the workplace. Hiring them is a cost-effective way of accomplishing project goals.
• There are times when the companies need to perform rare and distinguished functions in a small duration. For this, hiring full-time employees may incur extra costs. Freelancers, therefore, are the best for performing these duties.
• Most importantly, freelance employment enables companies to improve reach in acquiring talents from global marketplaces.

Offering job opportunities depending on the business requirement is the strategic way of cutting human resource management costs. That is where employment bifurcation plays a vital role. There are times when companies need skilled professionals for a limited duration. Awareness about various categories of employees helps define recruitment decisions in such a scenario.

Most significantly, it communicates expectations to both the parties (employer and employee) based on the nature of the employment type.

Every company desires relevant human resources. A proper understanding of the diverse types of employment enables organizations to bifurcate the roles and duties effectively thereby improving cost-efficiency and talent management. It is also important to note that clarity about employment statuses and available options allows HR to focus on other vital functions within organizations.

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