21 Types of Employment: Your Hire-To-Retire Guide

As the job market evolves, companies are experimenting with various employment types to build more flexible staffing models. One reason for this is the cost of slow hiring. On average, it takes 41 days to fill a vacancy. However, top candidates are usually off the market in just 10 days.

Blending different types of employment can help plug this gap by tapping into broader talent pools while also reducing costs, boosting agility, and nurturing future talent. This article looks at 21 different types of employment and how they can benefit your organization.

Contents
What are the 21 types of employment?
How to select the right employment type

What are the 21 types of employment?

Here are 21 employee classifications you can explore:

1. Apprenticeship

An apprenticeship is a structured training program that offers hands-on experience and technical skills under guidance from experienced professionals. Examples include an electrician’s apprentice who learns wiring techniques from a licensed electrician or a carpenter’s apprentice who learns woodworking or construction skills.

Key features

• Employment period: Typically between one and six years.
• Working hours: Often 35 to 40 hours weekly, which may include both on-the-job training and classroom-based instruction.
• Salary format: Hourly; apprentices may start at a lower wage, which can increase as they progress and demonstrate improved skills.
• Benefits: Apprentices may receive some full-time employee benefits—such as health insurance and paid time off (PTO)—especially in unionized industries.
• Taxes and deductions: Standard taxes and deductions (federal, state, and local) and Social Security and Medicare contributions may apply. Employers must also provide a year-end W-2 form.
• When to offer it: When your company requires highly skilled workers in specialized trades, you want to build a robust talent pipeline or prioritize long-term workforce development and retention.

2. At-will agreement

This employment type is the most common in the U.S., with 49 out of 50 states permitting it. It allows either the employer or employee to terminate the employment relationship at any time, for any reason, with or without notice. However, employers cannot fire workers for any unlawful reason.

Key features

• Employment period: Indefinite until terminated by either party.
• Working hours: Typically full-time but can vary by role and company policies.
• Salary format: Usually fixed or hourly, but can also include bonuses, commissions, or other forms of compensation.
• Benefits: Benefits vary based on company policies. Common benefits include health insurance, retirement plans, PTO, and sick leave.
• Taxes and deductions: Employers must provide a W-2 form at the end of every year. Standard taxes and deductions, Social Security and Medicare contributions, and employer-provided year-end W-2 form.
• When to offer it: When you want to maintain flexibility for both the company and employees. However, make sure you communicate clearly with employees and treat them fairly to prevent potential legal issues. You can also distribute clear employee handbooks to avoid any confusion.

3. Casual employment

This flexible work arrangement hires workers on an ‘as needed’ basis and offers no guarantee of regular work hours. An example would be a barista hired for occasional weekend shifts or a delivery driver called in to work during peak hours.

Key features

• Employment period: Short-term, often based on specific projects, seasonal needs, or peak periods.
• Working hours: Varies depending on each employer’s needs.
• Salary format: Usually hourly, but sometimes a capped flat fee for specific tasks or time-based projects.
• Benefits: Limited benefits that usually include compensation insurance. Some employers may offer additional benefits, such as health insurance or retirement plans.
• Taxes and deductions: Standard taxes and deductions, mandatory withholding of Social Security and Medicare taxes from pay, and employer-provided year-end W-2 form.
• When to offer it: If your company has fluctuating workloads or seasonal needs or has to reduce fixed labor costs.

4. Commission-based employment

This arrangement bases a worker’s compensation primarily on the sales or revenue they generate. For instance, a real estate agent would earn a percentage of each home sale, or a salesperson would receive a commission for each product sold.

Key features

• Employment period: Indefinite until terminated by either party.
• Working hours: Vary by role and company policies.
• Salary format: Either a fixed percentage of sales, a flat fee per sale, or a combination of both. Some employers may also offer a base salary in addition to commissions.
• Benefits: Common benefits include health insurance, retirement plans, and PTO.
• Taxes and deductions: Standard taxes and deductions, Social Security and Medicare contributions, and employer-provided year-end W-2 form.
• When to offer it: For sales roles and incentivizing high performance that impacts the company’s bottom line. Attractive, uncapped sales commissions can also attract and retain top talent in competitive markets.

5. Consulting

A consultant is a self-employed professional who provides expert advice or services to clients on a per-project basis. Examples include an external management consultant who advises companies on improving efficiency or a cybersecurity consultant who helps organizations protect their digital assets.

Key features

• Employment period: Varies according to each project or engagement.
• Working hours: Flexible, as consultants typically set their own hours.
• Salary format: Usually a flat project fee or hourly rate.
• Benefits: Self-determined.
• Taxes and deductions: Self-employment taxes and estimated taxes paid throughout the year. Clients must also provide a year-end 1099-MISC form.
• When to offer it: Whenever your company needs specialized expertise without having to incur long-term employment costs.

6. Independent contractor

An independent contractor is a self-employed individual who provides services to clients on a contract basis. They usually usually engage in structured, longer-term contracts with clients. Some examples are a freelance writer working on a client campaign for a marketing agency, or a web developer updating a company’s website or interface.

Key features

• Employment period: Varies based on each contract.
• Working hours: Flexible, as independent contractors often set their own schedules. However, contractors working closely with full-time employees may need to maintain regular office hours.
• Salary format: Usually a flat project fee or hourly rate.
• Benefits: Self-determined.
• Taxes and deductions: Self-employment taxes and estimated taxes paid throughout the year. Clients must also provide a year-end 1099-MISC form.
• When to offer it: If your company has short-term, specialized projects that don’t require full-time commitment. This employment type allows businesses to adapt quickly to changing demands while maintaining a lean workforce.

Regardless of employment type, it’s still important to think about these employees’ experience within the organization. Often, organizations neglect non-permanent employees, leading them to have very poor experiences. These employees tend to move around frequently and share their experiences, which can be either helpful or detrimental to your employer brand.

Dr. Marna van der Merwe, Subject Matter Expert, AIHR

7. Fixed term contract

A fixed-term contract involves a predetermined start and end date. For example, a researcher employed for a specific research project may sign a one-year contract with a university or company.

Key features

• Employment period: Anywhere from a few months to several years.
• Working hours: Typically 40 hours a week, though this may vary according to project requirements.
• Salary format: Fixed or hourly (the latter is more common for short-term contracts).
• Benefits: Some employers offer full benefits packages, and others offer limited to no benefits.
• Taxes and deductions: Fixed-term employees are subject to the same taxes and deductions as permanent/full-time employees.
• When to offer it: If your company prioritizes workforce flexibility, managing project-based needs, and assessing potential hires. It also allows you to align staffing with business objectives, reduce long-term commitment risks, and identify talent for future permanent positions.

8. Freelancing

Freelancers, such as graphic designers or videographers, are self-employed individuals who work independently and provide services typically on a short-term, per-project basis.

Key features

• Employment period: Determined by the specific project or contract. 
• Working hours: Freelancers have flexibility in setting their own work hours.
• Salary format: A flat fee, hourly rate, or commission, depending on contract terms. However, some freelancers may be hired on a retainer basis.
• Benefits: Self-determined. 
• Taxes and deductions: Self-employment taxes and estimated taxes paid throughout the year. Clients must also provide a year-end 1099-MISC form.
• When to offer it: When your company has short-term projects that require specialized skills it doesn’t need on a regular basis.

HR tip

If your company is seeking skilled freelancers, the gig economy could provide the talent it needs. Platforms like Fiverr and Behance offer access to a global pool of peer-reviewed talent. This approach can be cost-effective and efficient, especially for short-term projects or specialized skills.

9. Full-time employment

Full-time employees usually work exclusively for one company. Some employers even specifically forbid freelancing or part-time work for other clients or companies in their employment contracts.

Key features

• Employment period: Full-time employment is typically indefinite, with no predetermined end date.
• Working hours: The specific hours may vary depending on the role and industry, but full-time employees are usually expected to work a consistent schedule.
• Salary format: Full-time employees are typically paid a fixed salary or hourly wage.
• Benefits: Full-time employees often receive a comprehensive compensation package, including health insurance, retirement plans, paid time off, and other perks.
• Taxes and deductions: Standard taxes and deductions, Social Security and Medicare contributions, and employer-provided year-end W-2 form.
• When to offer it: Full-time employment suits core roles requiring a consistent and long-term commitment.

10. Internship (paid and unpaid)

An internship is a temporary position that allows younger individuals to gain practical experience and learn new skills. For instance, a college student may be an unpaid intern at a marketing firm to gain experience, or a recent graduate may take on a paid internship at a law firm.

Key features

• Employment period: Specific duration, such as a semester or a summer.
• Working hours: Internship hours can vary but often involve a part-time or full-time commitment.
• Salary format: Fixed or hourly, or a stipend to cover basic costs such as transportation for paid internships.
• Benefits: Companies are not legally required to provide interns benefits, though some may offer them.
• Taxes and deductions: Under certain conditions in the U.S., paid interns at for-profit entities are considered W-2 employees covered by the Fair Labor Standards Act (FLSA), so they’re entitled to minimum wage and overtime pay.
• When to offer it: When your company wants to attract and develop young talent, cultivate a pipeline of high-potential individuals aligned with its values, and enhance employer branding.

11. Leased employment

Leased employment involves companies contracting with third-party staffing agencies to hire workers. The agency acts as the employer of record, handling payroll, benefits, and HR functions. Examples include nursing staff temporarily assigned to a hospital or teachers leased to a school district for a specific period.

Another version of this is offshoring or insourcing. For example, a U.S. company could have a call center in India. This employment type allows certain roles or activities to be outsourced as a whole (e.g., a group of leased employees).

Key features

• Employment period: Varies based on the employer’s needs and worker’s skills and availability.
• Working hours: Usually full-time hours, but schedules can be flexible and adjusted to meet project or company requirements.
• Salary format: Typically hourly, though some may receive a fixed salary. Agencies set their own pay rates.
• Benefits: The staffing agency may offer benefits such as health insurance, retirement plans, and PTO.
• Taxes and deductions: Standard taxes and deductions and agency-provided year-end W-2 form.
• When to offer it: When your company must quickly fill temporary positions, scale its workforce up or down, access specialized skills without committing to a full-time hire, or outsource certain functions (such as IT or HR).

12. On-call employment

On-call employees are called in to work as needed, often on short notice. Examples include emergency room doctors available to work as needed or plumbers on call to respond to emergency service requests.

Key features

• Employment period: Ongoing, though continuous work is not guaranteed.
• Working hours: Vary depending on employer needs and employee availability.
• Salary format: Usually hourly. Occasionally, they may receive a monthly retainer.
• Benefits: Limited (usually health insurance), though it also depends on the number of hours worked.
• Taxes and deductions: Standard taxes and deductions and employer-provided year-end W-2 form.
• When to offer it: If your company has unpredictable workloads (e.g., event companies, healthcare facilities, and essential services) or is facing unexpected absences or peak demand periods.

13. Part-time employment

While part-time employment usually involves a fixed schedule like full-time work does, it involves fewer hours or days. For instance, a part-time barista may work 20 hours per week at a coffee shop, or a retail associate may work only on weekends.

Key features

• Employment period: Either ongoing or temporary.
• Working hours: Typically 20 to 30 hours per week.
• Salary format: Usually hourly.
• Benefits: Limited (usually health insurance), though it also depends on the number of hours worked and company policies.
• Taxes and deductions: Standard taxes and deductions and employer-provided year-end W-2 form.
• When to offer it: If your company must cover specific shifts or has fluctuating workloads. This helps manage labor costs and improve productivity by optimizing staffing levels during peak periods. 

14. Probationary employment

Probationary employment is a trial period at the beginning of a new job. It allows employers to assess a new hire’s skills, performance, and cultural fit. For example, a company may evaluate a new hire for three months before deciding whether or not to offer them a permanent contract.

Key features

• Employment period: Typically 30 to 90 days, but can be longer or shorter depending on the position and company policy.
• Working hours: Probationary employees usually work the same hours they would in a permanent role.
• Salary format: Same salary as permanent employees in the same position.
• Benefits: Limited benefits depending on company policy and probation length.
• Taxes and deductions: Standard taxes and deductions and employer-provided year-end W-2 form.
• When to offer it: When your company wants to improve its hiring outcomes by allowing HR to assess new hires’ suitability, identify potential training needs, and reduce the risk of low-quality hires. 

15. Seasonal employment

Seasonal employment involves hiring workers for a specific period (usually a particular season or time of year) to meet increased demand for products or services. For example, additional tourism roles are needed during peak travel seasons, and more agri-industry workers during harvest seasons.

Key features

• Employment period: Varies based on industry and specific job roles. 
• Working hours: Can range from part-time to full-time, often with fluctuating schedules to accommodate peak demand periods.
• Salary format: Typically hourly, with potential for overtime pay. However, seasonal workers may also be paid according to a piece rate based on the number of units harvested or created.  
• Benefits: Limited benefits, as seasonal employees are often considered temporary workers. 
• Taxes and deductions: Standard taxes and deductions and employer-provided year-end W-2 form.
• When to offer it: If your company has cyclical demand, such as retail during holidays, tourism during peak seasons, and agriculture during harvest. It allows companies to optimize labor costs by scaling their workforce up or down to meet changing customer needs and maintain operational efficiency.

16. Self-employment

Self-employment encompasses anyone who earns income without a traditional employer-employee relationship. This broad category includes business owners, freelancers, and independent contractors we mentioned above.

Accountants, writers, graphic designers, private tutors, and photographers are some common examples of individuals who are often self-employed.

Key features

• Employment period: Indefinite.
• Working hours: Flexible, determined by the individual’s business and monetary needs, as well as work ethic.
• Salary format: Derived from revenue generated minus expenses.
• Benefits: Self-determined.
• Taxes and deductions: Self-employment taxes (including Social Security and Medicare) and quarterly taxes.
• When to offer it: Some employees resign to start their own businesses, then contract their services to their former employers. If your company is on good terms with former employees who are now self-employed and would like them to take on assignments on an ad-hoc or retainer basis, you can consider this employment type.

17. Temporary employment

Temporary employment involves hiring workers for a specific period, usually to fill in for absent employees, complete short-term projects, or meet temporary workload increases. For example, a company may hire an office employee or a factory worker on a temporary basis to cover for an employee recovering from a prolonged illness.

Key features

• Employment period: Ranges from a few days to several months.
• Working hours: Can range from part-time to full-time, depending on the assignment.
• Salary format: Typically hourly, with potential for overtime pay.
• Benefits: Limited benefits, as temporary employees are often considered short-term workers. Some employers may offer minimal benefits, like health insurance or retirement plan contributions.
• Taxes and deductions: Standard taxes and deductions and employer-provided year-end W-2 form.
• When to offer it: When your business has short-term staffing needs, such as covering maternity leave, sick leave, or seasonal peaks. Temporary employment can provide flexibility and help HR manage labor resources and costs.

18. Temp-to-perm employment

Temp-to-perm employment involves initially hiring workers temporarily, with the potential to transition them to permanent positions based on business needs and their performance.

Key features

• Employment period: Begins as a temporary position, with the potential to become permanent.
• Working hours: Can range from part-time to full-time.
• Salary format: Typically hourly, with potential for overtime pay during the temporary phase. Once converted to a permanent position, the employee may transition to a salaried or hourly rate.
• Benefits: Usually limited during the temporary phase. Once converted to permanent positions, employees should be eligible for full-time benefits.
• Taxes and deductions: Standard taxes and deductions and employer-provided year-end W-2 form.
• When to offer it: When your business needs long-term staffing but wants to assess candidates’ performance and culture fit before making a permanent hiring decision. This employment type can help provide a pipeline of pre-screened candidates for future opportunities.

As employment becomes more fluid and less reliant on boundaries, it’s also useful to consider non-permanent employees in talent pools. If proactively identified and managed, this is often an overlooked source of skills available to the organization.

Dr Marna van der Merwe, Subject Matter Expert, AIHR

19. Tenured employment

A form of employment—typically in academia—where individuals such as university professors have job security as they’re employed indefinitely.

Key features

• Employment period: Generally long-term, often lasting until retirement.
• Working hours: Tenured faculty members typically have a set number of teaching hours per week, along with additional responsibilities such as research, advising students, and serving on committees.
• Salary format: Fixed annual salary, which may include additional compensation for research, publications, and administrative duties.
• Benefits: Comprehensive benefits package, including health insurance, retirement plans, and PTO.
• Taxes and deductions: Standard taxes and deductions, Social Security and Medicare contributions, and employer-provided year-end W-2 form.
• When to offer it: Tenured positions are typically offered to faculty members who have demonstrated excellence in teaching, research, and service and who are considered essential to their institution’s long-term goals.

20. Traineeship

A structured training program designed to equip individuals with specific skills and knowledge required for a particular job or industry. For example, a finance graduate may join a structured training program for asset management at a bank.

Key features

• Employment period: A few weeks to several months.
• Working hours: 40 hours a week, though this may vary based on the program and employer.
• Salary format: A stipend or low salary.
• Benefits: Limited (usually health insurance).
• Taxes and deductions: Standard taxes and deductions apply, but these can vary based on the specific terms of the traineeship and the individual’s tax status.
• When to offer it: When your company wants to develop a skilled workforce, especially if it’s in industries with high turnover or specialized skill requirements.

21. Volunteering

Volunteers work without receiving monetary compensation, typically at a non-profit organization.

Key features

• Employment period: Can range from a few hours to several years.
• Working hours: Usually flexible, determined by organizational needs and the volunteer’s availability.
• Salary format: Volunteers do not receive a salary or wages.
• Benefits: While volunteers don’t receive monetary compensation, they may receive benefits like training, experience, and networking opportunities.
• Taxes and deductions: None, as volunteers do unpaid work.
• When to offer it: If you work at a non-profit or a company with a non-profit arm and want to build community relationships.

HR tip

Whether intentional or accidental, misclassifying workers can lead to significant legal and financial penalties for U.S. businesses. These penalties include fines, back wages, tax arrears, and more. While the law is clear on these regulations, myths persist. If you’re unclear about how to classify your workforce correctly, click here to get up to speed.

How to select the right employment type

To choose the best employment types to meet your company’s needs while optimizing costs and remaining compliant with labor laws, consider the following factors:

• Legal compliance: Misclassifying employees can lead to costly legal consequences for your organization. You must understand the distinctions between different employment types to classify your company’s workforce correctly.
• Cost management: You must carefully weigh the costs of different employment types. For instance, full-time roles carry significant fixed costs, while part-time hires offer flexibility. Calculate these costs against the return on investment to optimize your workforce strategy.
• Flexibility vs loyalty: Full-time employees offer greater stability and loyalty but may limit flexibility. On the flip side, temporary employees and contractors provide you with flexibility but may lack the same level of commitment.
• Tax implications: The tax implications of different employment types can vary significantly. Understanding them is essential for accurate tax reporting and regulatory compliance.
• Strategic workforce planning: Consider your long-term workforce needs and how different employment types can contribute to developing your talent pipeline, increasing your hiring success, and serving your company’s overall business strategy.

To sum up

Some workplaces thrive on a mix of employment types, each vitally important in meeting organizational needs. By understanding the different options available, you can create flexible teams, manage costs effectively, and ensure compliance with labor laws.

Choosing the right mix of employees allows businesses to adapt quickly, fill skills gaps, and plan for the future. Whether hiring freelancers for short-term projects or building long-term teams with apprenticeships, the goal is to balance flexibility with fairness while keeping your company competitive and efficient.

Nicole Lombard is an award-winning business editor and publisher with over two decades of experience developing content for blue-chip companies, magazines and online platforms.