12 Employment Types You Need to Know: A Guide for Employers

We often hear about common employment types like full-time, part-time, freelance, contract, internship, and traineeship. But do you know there are other models too?

If you are employer, understanding these types is important to match business needs with the right kind of job.

Employment type means the different ways people can be hired to work.

It decides how they are paid, how many hours they work, and what benefits they receive.

By knowing employment types, employees can organize their workforce and decide which type of employment that suitable for the current company situation.

On the other hand, workers are able to know their rights and responsibilities.

In this article, we’ll explore 12 types of employment in Malaysia. Curious to know more? Let’s dive in!

1. Full-Time Employment

Full-time jobs are the most common type of employment.

People in full-time roles usually work 35 to 40 hours a week on a set schedule.

These jobs often come with benefits like paid leave, health insurance, and retirement plans.

Mostly employers hire these for industries like finance, education, healthcare, manufacturing, and technology.

Typical positions include managers, engineers, educators, and administrative staff.

Advantages:

Eight working hours per day
Comprehensive benefits attract top talent.
Long-term engagement fosters loyalty and expertise.

Disadvantages:

Higher costs for salaries and benefits.
Limited flexibility for scaling workforce during low-demand periods.

2. Part-Time Employment

Part-time jobs involve working fewer hours than full-time roles, often with flexible schedules.

Part-time workers may get some benefits based on the hours they work.

Employers also use part-time roles to adjust staffing during busy or slow periods and manage costs.

Typical positions include cashiers, data entry, delivery driver, teacher, event organizer, etc.

Advantages:

Cost-effective for employers needing limited hours of service.
Greater flexibility in scheduling.

Disadvantages:

Limited engagement and availability.
May lack the commitment seen in full-time employees.

3. Apprenticeship

Apprenticeships are for people starting in trade industries like carpentry or electrical work.

They combine hands-on training with classroom learning.

This kind of role lets people gain skills while working with experienced professionals.

Employers must provide hands-on training, mentorship, and a safe working environment. Apprentices are expected to learn and contribute under guidance.

Typical positions for this employment type are Technician, Chef, Electrician, Plumber, Carpenter, Hairdresser, Tailor, Welder, IT Support, Administrative Assistant, etc.

Advantages:

Builds a skilled workforce tailored to industry needs.
Creates a talent pipeline for future full-time roles.

Disadvantages:

Time-intensive for trainers.
Limited short-term productivity.

4. Traineeship

A traineeship is similar to an internship but focuses more on practical training for a specific job.

It’s often used to prepare people for roles in non-trade industries, like banking or media.

Traineeships usually have a structured training plan, but they are shorter and less formal than apprenticeships.

Trainees might start working on simple tasks and gradually take on more responsibility as they learn the required skills.

Common traineeship roles include finance assistants, IT support, or junior sales staff.

Advantages:

Develops career-ready talent.
Easier integration into permanent roles post-training.

Disadvantages:

Limited productivity during training.
May require additional investment in resources.

5. Internship

Internships are temporary jobs designed for students or people just starting their careers.

They provide hands-on experience and help interns learn about a specific industry or role.

Internships often last for a few months and can be paid, unpaid, or offer a small stipend.

Interns are typically not considered full-time employees and usually don’t get benefits like health insurance.

Advantages:

Cost-effective way to access fresh talent.
Offers companies an opportunity to identify potential hires.

Disadvantages:

Requires significant mentoring.
Interns may lack expertise or industry knowledge.

6. Casual Employment

Casual jobs have irregular hours and are usually short-term.

Businesses hire casual workers as needed, making this type of work common in industries like retail and hospitality.

For example, a waiter is hired for the holiday season when the restaurant is busy.

While casual workers might not get benefits like full-time employees, they often earn a higher hourly rate.

This type of job is good for people looking for temporary or flexible work.

Advantages:

High flexibility to meet fluctuating demand.
No obligation for long-term benefits.

Disadvantages:

Limited worker loyalty.
Inconsistent availability of staff.

7. Employment on Commission

Commission-based jobs pay workers based on their performance, like the sales they make. These jobs are common in sales and marketing roles.

Some roles that use this type of employment are real estate agent, insurance agent, and multilevel marketing.

They earn a percentage of the sale price of each product they sell. While this setup can lead to high earnings, it also comes with financial uncertainty as income depends entirely on results.

Advantages:

Drives high performance and productivity.
Reduces fixed costs for employers.

Disadvantages:

Earnings can be unpredictable for employees.
May lead to high turnover.

8. Contract Employment

Contract employment is when a person is hired for a specific project or for a fixed time, such as six months or a year.

Once the project is done or the period ends, the contract concludes unless renewed.

Contract employees are not part of the company’s permanent staff.

They might not get benefits like full-time employees do. However, they are often hired for their specialized skills.

Typical roles for this type are Project Manager, Software Developer, HR Specialist, Graphic Designer, Marketing Coordinator, Finance Analyst, Data Scientist, Customer Service Executive, Sales Representative, Administrative Assistant, Research Assistant, IT Support Specialist, Event Coordinator, Business Analyst, Procurement Officer, etc.

Advantages:

Flexibility to scale workforce.
Access to specialized skills for projects.

Disadvantages:

Lack of long-term engagement.
Potential challenges in managing multiple contracts.

9. Probation

Probationary periods are trial phases for new employees.

During this time, the employer assesses the worker’s performance and fit within the organization.

Probation periods usually last a few weeks to a few months. In some cases, workers might not get full benefits.

Successful probation leads to full time employment, enhancing job security.

Advantages:

Allows employers to assess candidates thoroughly.
Reduces risks of hiring unsuitable employees.

Disadvantages:

May cause anxiety or uncertainty for employees.
Short evaluation periods might overlook potential.

10. Seasonal Employment

Seasonal jobs are temporary roles for specific times of the year, like the holiday season or harvest time.

These jobs are common in retail, agriculture, and tourism.

Examples of roles in seasonal employment are workers on farms during harvest season, retail staff during holiday sales, and workers in the tourism industry during school holidays.

Advantages:

Efficient workforce management during peak demand.
Reduces labor costs during off-season.

Disadvantages:

Inconsistent workforce availability.
Training required for new hires each season.

11. Leased Employment

Leased employment involves workers hired through a staffing agency or outsourcing agency.

The agency manages payroll, benefits, and other administrative tasks, while the workers perform their jobs at the client company.

These employees are technically employed by the agency, not the company they work for directly.

The setup is common in industries with fluctuating labor needs, like manufacturing, construction, or logistics.

Usually roles that offer by outsourcing company are Human Resources (HR) Manager, Admin Assistant, Finance Officer, IT Support, Sales Executive, Customer Service Representative, Operations Coordinator, Marketing Specialist, Logistics Officer, Technical Support Engineer.

Advantages:

Reduces administrative burden.
Offers flexibility in workforce management.

Disadvantages:

Higher costs due to agency fees.
Limited control over employee selection.

12. Contingent Employment

Contingent employment refers to jobs that are temporary or project-based, such as freelancing, part-time work, or independent contracting.

Contingent workers have flexible schedules and are typically hired for specific tasks without long-term commitments.

They usually don’t receive benefits like health insurance or retirement plans and are responsible for managing their own taxes.

Some examples of these employment type are graphic designers, freelance writers, and event photographers.

Advantages:

Ideal for short-term or specialized projects.
Reduces long-term obligations.

Disadvantages:

Limited loyalty and availability.
Potential compliance issues with labor laws.

How to Determine the Right Employment Type for Business?

Choosing the right employment type depends on your company’s needs, the nature of the work, and your budget. Here is how you can decide:

1. Evaluate the type of work

If the job requires a consistent presence and long-term commitment, such as managing operations or leading a team, full-time employment is the best option.

For roles with limited hours or seasonal peaks, like retail staff during holidays, part-time or seasonal employment can be more practical.

On the other hand, specialized tasks or short-term projects, contract or freelance workers are ideal.

For example, hiring a web developer on a contract basis can help complete a specific project without long-term obligations.

2. Understand Workforce Flexibility Needs

Companies with changing workloads, like those in construction or event planning, can benefit from hiring casual or temporary workers.

These employees can be brought in when needed without requiring long-term commitments.

For industries like manufacturing or skilled trades, apprenticeships and traineeships are great options.

They let businesses train new workers in specific skills while tailoring their training to fit the company’s needs.

3. Consider Legal and Budgetary Constraints

Full-time employees come with higher costs, including salaries, benefits, and potential severance pay.

If your business is growing but has limited resources, part-time or casual employment can help reduce costs while meeting your staffing needs.

Keep in mind the legal obligations tied to each employment type.

For example, in Malaysia, gig workers and freelancers are not entitled to the same benefits as full-time employees, which can lower costs but may impact worker satisfaction and retention.

4. Align with Long-Term Goals

If you’re building a core team for future growth, offering permanent contracts with career development opportunities can attract and retain top talent.

For companies exploring innovation or new business areas, internships provide a way to identify potential talent while injecting fresh perspectives into your team.

5. Adapt to Industry-Specific Demands

Certain industries require specific employment types. Retail and hospitality often rely on seasonal or casual employees to handle peak times.

Creative industries may use freelance or commission-based workers for projects.

Manufacturing and construction might use leased employees to manage large-scale demands.

Common FAQs about Employment Types

Can an employee switch between full-time and part-time?

Yes, employees can switch between full-time and part-time roles if the company allows it, and the role's requirements can accommodate the change.

This flexibility often depends on company policies and the nature of the job.

For example, a full-time administrative assistant may transition to part-time hours to manage personal commitments. The workload can be adjusted.

What are the rights of gig workers in Malaysia?

Gig workers, like delivery riders or freelance designers, often lack the same legal protections as full-time employees. They typically do not have access to benefits like paid leave, health insurance, or job security.

However, governments are currently exploring ways to improve gig workers' rights, such as introducing minimum pay standards, social security contributions, and basic protections against unfair treatment.

How do employment types affect tax and benefits?

Employment type directly impacts taxes and benefits. Full-time employees often receive benefits like health insurance, retirement contributions, and paid leave, which are typically factored into their contracts.

In contrast, casual or freelance workers might need to manage their taxes independently and may not receive company-provided benefits.

Employers may also handle payroll taxes differently depending on the employment arrangement.

What is the difference between full-time and permanent employment?

Full-time employment focuses on the number of hours worked, usually 35-40 hours a week, with regular schedules.

Permanent employment refers to a job that continues without a set end date.

What is the difference between fixed-term and temporary employment?

Fixed-term jobs come with a specific start and end date, often used for projects or covering a temporary absence, such as a maternity cover position might last six months.

Temporary employment, however, is less structured and often ends when the task or need is complete. Temporary roles are more flexible but might not always specify an exact duration upfront.

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