5 Common Types of Employment and How They're Different

By Indeed Editorial Team

Updated 19 September 2022 | Published 6 December 2021

Updated 19 September 2022

Published 6 December 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

There are many types of employment that can benefit different lifestyles, and companies may offer one or all of them, depending on the industry and the size of the organisation. They use different schedules and are prevalent in some industries more than others.

If you're interested in finding employment, learning about the different types and their advantages can be beneficial. In this article, we describe different types of employment structures, answer common employment questions and provide helpful tips for choosing the employment format that works best for you.

5 types of employment structures

Understanding different formats of employment can help you determine which might be best for you. Depending on the industry and position, different employment structures may work better than others. These are some different types of employment that companies can hire:

1. Part-time employment

Part-time team members are individuals who work less than 35 hours a week and are typically paid by the hour rather than salaried. These team members are legitimate staff but may not be eligible for benefits. Part-time employment is useful for those who have other responsibilities and engagements. This is a common form of employment that companies offer to diversify their team members and schedules.

Related: Part-Time vs. Full-Time Employment: What Are the Key Differences?

2. Full-time employment

Full-time team members are those that work an average of 40 hours a week and are eligible for benefits. Employers usually decide how to classify full-time employment within their organisations. Employers often offer health care coverage to their full-time team members and their dependents. Full-time work is best for those who have fewer engagements, higher financial needs and want to focus on developing their careers. This is a common form of employment that many professionals choose.

Related: Breaking into Full-Time Work with a Contract Background

3. Seasonal employment

Many industries experience busy seasons and off-seasons. This means they often hire seasonal team members to meet their staffing needs during the busy season. Seasonal team members are temporary but may return for many seasons in a row. Retail locations are good examples of companies that hire seasonal team members. There are many other industries that also hire seasonal team members. For example, a landscaping company may employ some staff during landscaping season and staff fewer people during the off-season.

4. Temporary employment

Temporary team members can work through an agency to find roles in which they fit. Companies often use temporary staffing when they fall short of staffing needs or experience unexpected absences. For example, a hospital may use agency nurses if they don't have enough nurses to care for their patients. An accounting firm may fill an accountant role with a temporary team member when another staff member goes on leave.

Read more: Temporary Employees: Definition, Benefits, Terms and FAQs

5. Leased employment

A leased team member is an individual who works with a staffing agency and then leases out to an organisation to complete a specific job. Leased team members typically work with the company for a year or longer. While still considered a team member, a leased worker is on the payroll of the staffing agency and also receives any benefits through the employment agency rather than through the organisation they're working for.

FAQs about different types of employment

Knowing more about different employment structures and options can help you determine which ones work best for you. These are the answers to some common questions about different types of employment:

What makes someone an employee?

Team members are individuals that a person or business hires to perform work for the person or business, also referred to as the employer. It's important that team members can control the work they perform to ensure it's proper employment. Additional factors that make someone a team member include:

  • the person is on the company's payroll and receives a specific salary or wage

  • the individual is eligible for benefits and other perks offered by the employer

  • a written or implied contract of employment

  • laws protect the person in terms of wages and employment rights

Related: Wage vs. Salary: Definitions, Differences and Examples

What are contingent workers?

Contingent workers are individuals who outsource to a business to perform specific duties on a non-permanent and non-employee basis. They may work remotely or in the office but aren't official staff members of the company. Contingent workers are typically experts in their field and complete certain projects based on their skill set. Examples of contingent workers include freelancers, consultants and independent contractors.

Contingent workers often perform under a statement of work provision that's agreed upon at the onset of the relationship with a company. Once a project is complete, the worker no longer works for the company. Companies may use the same contingent workers on recurring projects if they satisfy the company with their performance.

How are contingent workers different from employees?

Contingent workers differ from traditional team members in a few key ways, including:

  • Contingent workers don't have access to fringe benefits such as health insurance through the company.

  • Contingent workers are not salaried.

  • Contingent workers pay for and file their own taxes.

  • Contingent workers have control over how and when they perform their work.

Related: What Are Employee Benefits and 17 Types of Employee Benefits

What are the different types of contingent workers?

Depending on the industry and position you work in, you may fall into a different employment category. The following are the common types of contingent workers hired by individuals and companies:

  • contract workers

  • independent contractors

  • interns

  • consultants

Related: How to Get an Internship in 15 Steps

What is a contract employee?

A contract worker is a person who is retained by an organisation for a set period to perform a specific task or duty. How much the team member earns is also pre-determined. The worker may get their remuneration before, during or after completing their job. Freelancers are contract workers, and often specialise in graphic design, writing, editing and video creation.

Related: Permanent Employee vs. Contract Employees: Main Differences

What are the different types of contract employees?

If you enjoy work flexibility and setting your own schedule, you may be successful as a contract worker. Learning more about the different types of contract team members can help you determine which style may work best for your situation. There are many types of contractors, including:

Independent contractors

An independent contractor is a person or firm sourced by a company to perform work or services. Independent contractors may work permanently for the company, or they may work on a single project or as needed. These workers pay their own taxes and are not eligible for benefits through the companies they work with. Independent contractors may also be referred to as freelancers, subcontractors or contractors. Examples of independent contractors include actors, freelance writers and auctioneers.

Related: What Is Freelancing? With Advantages, Disadvantages and Tips

Interns

An intern is a person who performs work for a company on a paid, unpaid or partially-paid basis in exchange for the work experience gained. Many students take part in internships to prepare for their careers after school. Internships typically last for a few months, and after this time some interns may join as permanent team members of the company.

Related: Internships vs. Apprenticeships: The Main Differences

Consultants

A consultant is a self-employed person who offers professional advice in their area of expertise. For example, a consultant may specialise in education, law or marketing and provide companies with expert advice to help the company improve in these specific areas. Consultants provide their services temporarily but may be used repeatedly by a company based on the organisation's consulting needs.

Tips for choosing the best employment for you

If you're interested in finding the best type of employment for you, it's important to consider your situation, skills and current scheduling needs. These are some helpful tips you can use to choose the employment that works best for you:

  • Consider your other responsibilities: When determining which employment works best for you, consider the energy you have each week and how much of it you allocate to other responsibilities. If you're a parent or still in school, part-time options may allow you to manage your different responsibilities more effectively.

  • Use a schedule or planner: Using calendars, planners and schedules can help you visualise your time and understand when professional responsibilities can best fit. Write all your engagements and plans on a calendar and determine which days you can work.

  • Assess your financial needs: Full-time work often offers better and more reliable compensation than part-time or contract work. Assessing your financial needs can help you determine which employment option can work best for you.

  • Evaluate the benefits and perks: You may need benefits like health insurance, retirement plans or investment opportunities. Consider which of these each employment method offers before choosing one.

Related: The Main Differences Between Self-Employment vs. Employment

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