Employment - Everything that you should know about it
To survive in this world, all of us need to earn something in some way or another. One of these ways is to get employment. So what is the meaning of employment? Employment is the process of giving service in exchange for money. But the meaning of employment varies according to whose point of view it is seen from.
To the government, it sees employment as the total number of people who are employed. To the employer, they see employment means investing in the salaries and daily wages paid to the worker for their services. And to the employee, they see employment means to earn a livelihood and security.
- Benefits for employer
- Cost of hiring to the employer
- Temp work
- Temp work vs. Freelancing
- Unemployment problems and their solution
Benefits for employer
The benefits of employment for employees are varied. Some employers pay a hefty amount to their employees while some pay some kind of allowances or incentives apart from the salaries or wages. This is an act of appreciation to the employees for their skills, services, and loyalty. Such kinds of favor also boost the morale of the workforce. These are the following:
- Corporate discounts: The corporate discount refers to the discount on goods and services offered to the company's employees. The company also uses this offer to test the products internally before launching them to the public domain.
- Educational Allowance for children of the employed: Many organizations pay for the education of some or all children of the organization's employees.
- Insurance Plans: This is one of the best gestures shown by the company to its employees. Wouldn't you want to work for a company that cares for your future? This is to tell the employees that the company cares for the future and security of the employees and their families. These plans help cover the employee's expenditure in accidents, medical bills, sudden deaths, etc.
- Paid Vacations: This is a very attractive benefit to the employees, especially those who want to travel and explore places they dreamt of. For example, some companies offer one month of paid vacation after every three years.
- Paid sick leave and maternity leave: Companies offer employees this leave if they are not fit enough to perform their duties due to illness. Companies also offer this paid maternity leave to their women employees who are pregnant and expecting childbirth. This is usually six months from the due date.
- Incentives: Many competitive companies award their employees in the form of incentives. This incentive is a form of bonus for their hard work and for bringing more customers.
- Training: Good companies pay their employees to attend seminars and workshops so they can learn and grow. This increases their efficiency and performance. This is a great strategy used by companies to retain their employees since most employees want to work for a company that imparts new skills to stand out among other companies' employees.
- Profit-Sharing: Another offer that attracts and pleases the employees is that some of the profits are shared with its employees whenever the company makes a great profit. This keeps the employees loyal to the company.
Benefits of employment to employers
- Employers may obtain qualified experts who can handle and solve challenging problems by hiring personnel.
- Companies can boost revenues by hiring additional employees because productivity rises.
- By providing training to its employees, the company gains a higher capacity to keep up-to-date with changes in the industry.
- Employing workers also allows the firm to learn what talents to look for in applicants throughout the recruiting process. They'll be able to tell what sort of candidate is right for the position.
Cost of hiring to the employer
Hiring labor will cost a cash-strapped firm an arm and a leg. It's not easy to hire an employee without spending. It's not only about the salary that matters to the employer. It's also about the whole process of hiring cost. The cost varies greatly depending on the size and type of business and the employee's salary level. The following are the costs of hiring new employees.
Cost in recruiting
Firms pay a huge amount for advertisements in different forms. Most of which are in newspapers, social media, recruiting agencies, etc. There is also the cost of time spent reviewing the resumes and applications, time cost in conducting interviews, doing background checks, medical screening.
Cost of training
Firms also spent a huge amount in conducting training for their recruits. As a result, imparting and developing the desired skills can take months until they are considered ready. In addition, firms are sometimes forced to pay a significant amount of money for the trainee's food and lodging during the training process. According to some data, firms spent an average of $1,286 per person per year on training in 2019. Some even pay a high amount in internships and scholarships for the trainees.
Cost of spending on salaries
This is the bulk of expenditure of firms on its employees after the recruitment and training. A highly skilled employee, especially a technical person who can perform the hard tasks, can cost the company a great salary. There is also expenditure on various benefits and perks for the employees apart from the basic salary. Also, companies have to spend on various insurance policies.
The working space of every employee is also another thing that costs the company. The employer has to spend more on space so that the new employee can work in. And every square foot of the building can raise the renting price of the room. Unless the employee is working from home, this should be considered one of the costs.
Even after considering space, another expenditure is always required to be spent by the company. These are chairs, desks, electronics like computers, printers, software, etc.
Temp work is the short form of temporary work, and it is all about small work engagements where the worker is employed for a short duration. Temp work or temping or temporary work is a kind of employment whose engagements are only for a short period. This type of work is also called gigs. This type of work is also called contractual, casual, outsourcing, etc.
Temp work is different from Secondment, a state in which workers, generally professionals from one organization, are hired by another organization for some temporary work. Temporary workers may work full-time as well as part-time. Unlike long-time permanent employees, these kinds of work rarely come with additional benefits and allowance.
However, there may be extra payment if the work is remarkable and is beyond expectation. Nowadays, many small companies prefer hiring temporary workers rather than permanent workers as a cost-cutting measure. In addition, many clients and businesses have benefited from the availability of temporary employees since they occasionally engage specialists to do a task that is not necessary daily.
Temping also helps reduce unemployment to a certain level by providing informal labor opportunities to youths. Temp agencies usually run temp work. These agencies are hired by companies to recruit workers who fulfill the needs of the companies to work for a specified time at a certain payment amount. The workers may be working for the companies, but the temp agencies determine their salaries.
We have learned about temp workers above. But what about freelancers? Freelancer searches and hunts for clients independently and is not working under the shadow of any agencies. Instead, he gets paid directly by the client or companies. In these tough times where employment is very difficult to find, many have turned to freelance to tackle unemployment. According to data, more than 2 million Americans have turned to freelance since 2019.
Temp work vs. Freelancing
Both freelancing and temp work have experienced a boom in the last few decades, especially with the globalization of the internet. Although tempting and freelancing may seem similar, there are some differences between the two. Here are some of the differences between the two types of workers:
Many people think that being a freelancer is easy because they think they can work from their home's comfort and have flexible time to complete the project. However, as a freelancer, you have to depend on everything on your own. No one can give you advice. You have to solve problems on your own every time you come across one, and you are also pushed to learn new things merely to solve an issue.
On the other hand, being a temp worker, you have all the guidelines and a leader to lead you through a problem. Also, here you leave your work at work, you don't have to take home your work problems. You have specified time to work, and the responsibilities are as per your skills and capabilities.
As a freelancer, you must handle your tax computations and complete the essential documentation to manage your tax information and deductions. Your temp agency may have handled the procedure for you as a temp worker, and you simply received the tax-deducted amount as pay.
The workload of a freelancer might vary depending on the job and the time. Some projects need completion in a matter of days, which can be tiring, particularly if the project is large. However, as a freelancer, you have the final say on whether or not to take the assignment. Also, if time is not an issue, you have the choice to do the task as per your timing.
So you can also have time for family and to go out as you wish. Most freelancers have the luxury of working from home without gouging to the workplace if the work can be done online.
On the other hand, as a temp worker, the employer has already set the hours and tasks for you. In addition, most temp employees are recruited by businesses just to assist them during times of peak demand. As a result, we may anticipate that the amount of work that is outsourced will be limited.
The payment rate for a freelancer is more alluring, especially if you consider that you are getting paid directly by the client. You can also work on big projects that pay you heavily. But you should also consider the amount of repair and maintenance of the pieces of equipment you are working with. You also have to invest in new tools, software, and gadgets to increase efficacy and speed up your work.
However, working as a temp worker, you work at an hourly rate, so you get paid per your sitting hours. You also get paid extra for working overtime. Also, with temp work, you have the chance to work for long-lasting contracts, so there is little chance of sitting without work like in freelancing.
As a freelancer, there is no assurance that you will get work all the time. There are months where you will get so much work, while there are also drought months where you can't get any work. So you have to chase clients and be brutal to succeed.
Working as a temp worker, you will get to know how much time you'll stay employed and also if you're lucky you get employed for a long period. There is also a chance that the company will renew its contract with you if they find your work useful. Some temp workers even get hired permanently.
Generally, freelancers are not covered under any law that protects traditional workers like harassment, abuse, workplace harassment, etc. But there are laws that freelancers should know regarding copyright and other legal issues.
As a temp worker, the law applies in the same manner as it does to a company's regular employees, like the right to take appropriate rest per day and limits on the number of working hours, etc.
Unemployment problems and their solution
As we talk about employment, we should also talk about unemployment. This is a problem of the modern world that is rising day by day. According to words in the streets, more Americans are still out of work right now than during the great recession. Ten million Americans are still out of work today. There is also the effect of the pandemic where more and more people lost their jobs, and it is said that these jobs may not come back even after the pandemic. This issue must be addressed in some way.
This has been a topic of debate between industrialized and developing countries all over the world. If you’re one of those who lost their job, you may qualify for Unemployment Insurance (UI), which is temporary income to support you while you look for a new one. The US Federal Government has tried to minimize the intensity of the problem by assisting with state-run Unemployment Insurance.
This is done to make employers more responsible for their employees in times of hardship and difficulty. Even if you are a non-US citizen, you are eligible to apply for this provided you are legally authorized to work in the US. This UI is sought by workers who lost their jobs, especially during this pandemic. Through this, you can avail yourself up to a maximum of 26 weeks of assistance in a year.
This UI is funded by the Federal Unemployment Tax Act (FUTA), a tax levied on the employers as a portion or amount paid to the employees. But this insurance doesn’t cover the workers who voluntarily leave their jobs, people looking for their first jobs, and those who got fired from their jobs because of a just cause. In addition, students, self-employed, independent contractors, gig workers, and other undocumented workers are also not eligible to apply for this.
About the author
Dennis Hoinkis CEO, FSOM Group Corp.