4 Payroll Challenges for Seasonal Businesses

October 18, 2018 | posted by Abacus Payroll

Hiring any employee is an involved process, but taking on a short-term employee comes with its own set of complications. Whether you’re thinking about starting a seasonal business or you’re gearing up for this year’s madness, finding people to fill your positions is only one of the issues you’ll face. Here are a few ways to combat common pitfalls of seasonal hiring, both during the season and in the subsequent months.

Defining Seasonal Employees

A seasonal employee is, by definition, someone who works for 120 days (or fewer)—or no more than 130 hours per month for four months—in a payroll year. This is a good place to start when planning for your year, as some of your employees may automatically get disqualified from the “seasonal” category; if their workload exceeds the day or hour per month limit, the employee(s) in question will qualify for health coverage, thus putting them on par with your other full-time employees.

Once your employees qualify for benefits, you’re legally obligated to provide them with coverage in compliance with their positions along with state and federal requirements. Naturally, this can become costly quite quickly; fortunately, there are a couple of ways you can prevent accidental over-employment and benefit allocation.

The easiest way to avoid over-employing your seasonal workers is by hiring contractors for the year. Since contractors don’t require you to provide benefits or calculate their employment taxes, this is a quick fix best used for seasons during which you’re either short-staffed or low on cash. Unfortunately, hiring contractors also adds to the “temporary” nature of the seasonal work, so you may miss out on more permanent hiring (or re-hiring) opportunities

A more efficient way to prevent accidentally qualifying your employees for coverage is by using a reputable payroll platform to keep track of your various seasonal employees. This will take the stress out of your payroll management, allowing you to focus on what matters most: your season’s production.

Hiring and Re-Hiring

When looking for potential hires for the upcoming season, it’s best to start with what you know: look for reputable people who worked for you during the last season. Again, your metric will vary depending on your industry, but common traits to look for in re-hires include the following:

Aptitude for customer service (e.g., friendly, outgoing, pleasant)
Strong predilection for teamwork
Great conceptual grasp of the seasonal work itself
Good relationship with other long-term members of your team

These attributes will serve you well in virtually any field, so prioritize employees in this area when looking for re-hires. Of course, you should also advertise the position’s availability on any available channels such as social media, Craigslist, and/or your favorite telephone pole.

Once you’ve exhausted the re-hire pool, it’s time to start looking for people whose circumstances suit them to consistently short-term work. High school or college students are generally good choices, though keep in mind that any workers under 18 (and, if applicable, under 16) will bring restrictions which will lead to more of a time investment than you may like. Outside of this paradigm, any employees you can snag for the season will do.

It’s best to approach hiring with a balance between practicality and long-term thinking: while you can’t afford to pass up on employees who will fulfill adequately their job responsibilities for this season, make sure you’re always looking out for potential full-time hires.

Perfect Timing

Naturally, your season’s schedule will vary depending on your line of work; because of this, there isn’t necessarily a rule of thumb when it comes to hiring practices. Earlier is certainly better—a summer enterprise might start recruiting employees in late April or early May, for example—but you don’t want to begin looking for employees so early that they lose their motivation by the time your season actually begins.

Hiring isn’t the only area in which you need to get ahead of the curve. You’ll need to perform any administrative duties such as inventory management, payroll, and current staff paperwork well in advance so that you can focus on your season’s most important aspects as they come. Again, you don’t want to rush into checking all of the boxes too far ahead of time—doing so may cause you to miss an important step—but having your affairs in order a month or two before the season starts is a good idea.

Finally, you’ll want to ensure that your new-hire training is complete anywhere from a week to a month before your season kicks off. Doing this will ensure that the stakes are low enough to create a positive work environment during your new employees’ learning phase, and returning employees will have a chance to brush up on new protocols without the added pressure of learning on the job.

While it isn’t mandatory, structuring some team-building time—whether that involves a round of ice breakers or happy hour at the local pub—will help bring you team together before the mayhem sets in. Relaxation is important, and the team that relaxes together works well together.

Thinking Long-Term

Even though your business is temporary by nature, having access to a diverse group of employees is an opportunity you shouldn’t waste. While this season is, at its core, a time to make the most of what resources you have, it’s also a good time for you to begin evaluating your employees for potential long-term positions with your company. Take note of the workers who exceed when working alongside your full-time employees; they may make for excellent additions to your team.

This is also a time for you to monitor your inventory input and output for seasons to come. Much like you (hopefully) took stock of last year’s inventory, expenses, and/or lucrative time periods, make sure you’re tracking the cash flow in and out of your business. If you notice a positive pattern between two or more seasons, you can start planning a way to expand on that pattern for the following year well in advance.

You might even find that there’s a clear avenue for your business to expand into the off-season, making your employing scouting that much more important. As a general rule, thinking about the long-term goal while perfecting your short-term operation is a great way to keep your business running, your employees working, and your customers happy.

Recruiting new employees is always a hassle, but it’s especially difficult when they know they won’t be with you for more than a few months. If you’re interested in more information about how to make this season a successful one, call Abacus Payroll at (856) 667-6225 today!

About the Author: Abacus Payroll

Abacus Payroll, Inc. is a leading provider of payroll solutions for businesses of all sizes. Whether yours is a family-owned small business or a national corporation, we provide payroll, tax and other financial services on time and at an affordable price. Unlike other payroll providers, Abacus Payroll will assign your very own payroll specialist who will understand your payroll needs inside and out. So no more speaking to a different person each time, no more sitting on hold for hours and most importantly no more missed deadlines! Contact us today to see how we can help your business. You can count on us.