More and more employees want to work part-time

We’ve all heard the reports of companies shifting employees to part-time status in an attempt to get around the Affordable Care Act’s “employer mandate,” which requires employers with 50 or more employees to offer coverage to anyone working 30 hours or more per week or face big, non-tax-deductible penalties. Of course, there is a problem with this strategy: it’s against the law. ERISA says that employers that slash employee hours just so they don’t have to offer them benefits could be subject to a fine of $100 per day per employee.

It’s also difficult to cut ten or more hours out of a 40-hour-per-week employee’s schedule. For some companies, shifting employees to part-time just isn’t practical. Perhaps that’s the reason we’re not actually witnessing the massive migration to part-time that so many people predicted. In fact, several recent studies show that the number of people involuntarily working part-time – meaning they would prefer to work full-time but aren’t given that option – has actually decreased, not increased, since the ACA was passed.

But that brings up an interesting question: are there employees out there that actually prefer working part-time rather than full time? Interestingly, the answer is yes – a LOT of them. According to a recent Bloomberg Business report, which cites a study by the U.S. Bureau of Labor Statistics, about 6 million Americans are choosing to work part-time.

The report says that many of these individuals are “young and college-educated” and aren’t working part-time hours “because personal or economic circumstances forced them to. Rather, many are abandoning the traditional career path their parents took and working just enough hours to pay the bills or pursue a passion.”

This also doesn’t seem to be a short-term fad. The number of voluntary part-timers has gone up by 12 percent since 2007, with a fairly steady annual increase:

What this means for employers

For employers, this trend could certainly have an impact on their hiring practices. At a time when many companies would prefer to hire part-time rather than full-time employees in order to get around the employer mandate, it turns out that much of the top talent out there is actually looking for part-time work – a win-win.

The Bureau of Labor Statistics study actually found that “More than 20 million Americans are working less than 35 hours a week for ‘non-economic reasons’.” As the Bloomberg article explains, “it’s a deliberate choice—not because they can’t find full-time jobs. Two-thirds of the 20 million are working part time because they have family obligations, are attending school, or are semiretired.”

Of the 20 million, though, 6 million “are working part time because they don’t want to commit to one job or employer.” For these employees, a flexible schedule and a healthy work-life balance are more important than a high income or employee benefits.

As Deloitte’s chief talent officer, Mike Preston, explains in the Bloomberg article, “as much as 40 percent of the workforce may toil part time” by 2020, and employers “focused solely on traditional full-time hires are missing out.”

What this means for brokers

Some brokers have advised their employer clients to shift employees to part-time status in order to avoid an employer mandate penalty. This is terrible advice since it could be an ERISA violation, leading to possible fines and civil penalties. On the other hand, informing clients that a portion of their existing and potential workforce may actually prefer the flexibility of working part-time hours could be really good advice that could help the employer save money on both payroll and benefits while attracting talented workers who may not have considered a full-time position.

What it also means, though, is that brokers who have historically specialized in group health insurance need to consider selling individual policies. If you’re going to encourage your clients to hire fewer full-time employees, you want to be able to make some money off the part-timers. That doesn’t, however, mean that you need to start working one-on-one with the part-timers; that would be a tedious job and an inefficient use of your time. Instead, consider setting up a private exchange website to allow these employees to shop for coverage online and talk through their options with licensed agents in a centralized call center. The employees will get excellent advice and won’t feel abandoned by the employer, and you’ll be able to help your clients and earn a nice commission without doing a bunch of one-on-one enrollments.

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