Is it cheaper for an employer to hire 1 full-time person rather than 2 part-timers?

[MrsBartlet]

I have just found out that I will probably be made redundant from my part-time job. Basically there are two administrators in our office - one full-time and myself. I only work 9 hours a week, term-time only. They have said that they can only afford one full-time person and that I can apply for this and then both of us would be in contention for the job. I can't (or don't want to) work full-time due to childcare committments so obviously I am going to be the one who goes! To be fair to my manager, she did seem keen for me to apply for the job but it just doesn't fit in with my family at the moment. When I asked if it would be possible to have two part-time administrators, I was told that it is more expensive for the employer to do this as they have to pay more in NI contributions and pension contributions. Can anyone tell me if this is correct?

I feel gutted as the other administrator has been quite unhappy and was on the point of handing her notice in and I thought I might actually get an increase in my hours and responsibilities.

Yes it is correct - you have to pay an employees stamp etc and so it will increase of you have two people part time.

Not sure about the redundency bit though of getting ride of both of you and employing one person to do the same job - I would query that part?

Gosh that was quick! Thanks - I earn so little that I don't even pay NI contributions so I don't really know how it works!

What they are doing makes perfect business sense as it is so quiet that the other administrator will easily cope on her own. I'm just sad as I really enjoyed my job and after 8 years as a SAHM I loved being back at work, albeit in a small way!

It is a little bit more expensive to have 2 part timers, yes. But if you were asking about 2 part timers, were you wanting them to recruit someone new as a job share for you? Or hoping your colleague wouldn't mind reducing her hours?

Recruiting someone new when there is already someone there who can cover the hours required wouldn't be reasonable if that's what you were hoping.

If your colleague is unhappy and was planning to resign anyway, does she actually want the job? WOuld she consider asking for voluntary redundancy or going ahead with her original plan to resign?

Then looking for a job share or similar wouldn't be out of the question in the same way.

Do they need a full time person if it is that quiet? Could you do it in school hours? That would save them even more money (though obviously does nothing to help your colleague).

Umm, actually I'm not sure that I agree with IvyKaty. Your employer has to pay Employer's NICs on your salary above the Earnings Threshold. If you split a full time role between two people then you have 2 lots of Earnings Threshold (£110 per week), so less NIC.

The rules on pension contributions will vary from company to company. Unless the overall salaries of 2 part-time posts would be higher than a full time post, then the only way in which pensions costs are going to increase are in terms of administration costs.

I do however think that 2 part-time employees rather than a single fulltime one may add cost in respect of administration, management and handover time, and obviously there may be office type costs if the hours overlap (extra pc, desk etc). But not usually in terms of direct costs such as NI and pensions.

I went from FT to PT job share when I came back from ML this year. Work are trying to terminate my job share's contract while at the same time offering me extra hours. So it must work out more expensive.

Sorry - had to go and deal with the Tesco delivery!

flowerybeanbag - I was sort of thinking my colleague might want to do less hours. She is nearing retirement age and as I said was thinking of leaving. If she decides to leave anyway, then yes, a job-share would be good. Personally, I think they would be better with two part-timers as one could cover holidays, sickness etc for the other.

bigstripeytiger - they probably do need one full-time person. My colleague has just had 2 weeks holiday and I covered for her by going in during school hours and it was a struggle to keep on top of things. However, when we are both there doing our usual hours there isn't quite enough to keep us both fully occupied!

That is interesting LadyMuck. As I don't pay any NI at all I was thinking that 2 part-timers wouldn't necessarily be more expensive but I don't know what the employer has to pay for each employee. As for pension contributions - they certainly don't pay any for me.

It is usually a little bit more expensive but to what extent and how much of it is direct/indirect costs obviously depends on lots of things.

But even if it does cost a little bit more there are lots of advantages to having two part timers. You've highlighted one of those in your post MrsB; cover for holidays and sickness.

To what extent have you actually properly explored it as an option with your employers and your colleague? It sounds as though your boss is quite keen to keep you if possible.

A well-thought-out proposal to keep both administrators on on a job-share basis, keeping flexibility, skills and experience and saving on any redundancy costs they may be incurring would be worth them considering I'd say. Why don't you talk to your colleague and see if you can put something together?

I haven't had a chance to explore anything yet, flowery. I don't normally work on Mondays so they had asked me to go in especially for this meeting. I then went home and my colleague went in for her meeting so I haven't had a chance to talk to her. I'm working tomorrow so no doubt we will talk it all through then. Thanks for your help.

For two people earning say £150pw the employer will pay just over £5 in NI each, so £10 in total. For one person earning £300pw, there is £24 employer's NI.

So for two people earning the same total amount, there is a saving of £14 per week for the employer (this assumes that there is not a contracted-out pension scheme, everyone is under retirement age etc.).

Now I don't know how your pension scheme works but I bet there isn't a fixed element to the contributions so this is probably the same whether there are one or two of you.

So the person you are talking to is wrong about NI, and probably wrong about the pension too.

The elements of remuneration that tend to be a fixed cost per employee are perks like medical insurance, company cars, gym membership etc. and there are usually mechanisms in place for part-time employees to contribute to the costs of these.

But the potentially big cost that they haven't mentioned is training. If two people have to be trained to do the same job, it will inevitably cost twice as much for the employer.

Thanks, MrA - that is good to know. It is a charity that I work for so there are no perks like medical insurance, gym membership etc to worry about!

My colleague is still deciding whether to hand her notice in or not (although obviously the management do not know about this). If she does it may change things, although they could still choose to make me redundant in order to employ one full-time person. At least I will be able to argue the case for them keeping me on and taking on another part-timer.