Project-Based Employment Meaning – What is Project Based Employment?

Sep 2, 2021

Interior designer working on a project for work

Project-based employment is essentially where companies employ individuals on a temporary basis to undertake specific projects or tasks. The engagement of the employee is for a fixed time frame specified at the time they were engaged and project-based workers’ pay is generally based upon the completion of the project rather than calculated by the number of hours worked.

Many industries make use of the contingent workforce through project employment and more and more this is being seen as the way forward, allowing workers and companies to become more responsive to an increasingly dynamic marketplace.

Construction companies for example make use of the contingent workforce to meet high demands for labor at certain stages of construction projects without having to pay for full-time employees when the demand for work is lower. The contingent workforce is also used heavily in the delivery and hospitality business for this reason.

In other industries, project-based workers may be used for all sorts of different projects from consultancy to graphic design. Freelancers may be brought in to overhaul whole departments, give training, or support regular staff in any number of other ways. Some companies have very few actual employees and work primarily with temporary workers while others will simply use this resource to bring in specialist skills when needed.

The Differences Between Project-Based Employment and Regular Employment

Understanding the difference between project-based employment and regular employment is vital for both businesses and workers. Differences between contractors and full-time employees include the duration and scope of the relationship, compensation and financial obligations, how and when workers complete the work they have been assigned to carry out, and the nature of employment contracts.

Long Term Employment Definition

Long-term employment is the regular status of most employees. Employees are given an employment contract and are required to provide their services personally in return for an agreed salary or hourly wage, they remain employed until the employment has been lawfully terminated.

Project-Based Employment Definition

Project-based employment is becoming more common due to its flexibility for both companies and workers. However project-based workers are not actually employees. Instead, they are independent workers and the nature of the agreement must reflect this. Generally, project-based contracts will outline the work that is to be completed and the responsibilities and obligations of both parties but the worker regains control of exactly how they complete the task.

Project-Based Employees

Project-based employees often known as contingency workers, giggers, freelancers, or contractors are employed for a specific project or undertaking. Once the project or undertaking is complete they are no longer engaged by the company as would be the case for a regular employee. In fact, they are generally not actually employees at all, rather they are contractors or self-employed workers.

Employees who are hired for a specific project often have specific skills that the company does not need all the time. Project workers will also generally be paid by the project and receive payment on completion of the project. These details will be specified at the time of the engagement so both parties are fully aware of where they stand.

The nature of project-based hiring can make the contingent workforce a cost-effective option for companies and work in favor of the employee or contractor at the same time. The project-based workforce is able to be more flexible with hours determined or determinable by both parties at the start of the engagement and companies know where they stand with costs. Plus unlike a company worker, contractors are responsible for their own taxes which can mean lower costs for the company.

Where employment has been fixed, employees generally work at determined or determinable times and companies have greater control over the tasks that can be undertaken within those determinable times. Although a job description is likely to have been given at the time they were engaged there is generally more flexibility to increase the scope of the role. An employee can be more easily asked to muck in where needed whereas a project-based worker would usually stick to the project outlined in their project employment contract, and not deviate that far from the scope of the project determined at the time of their engagement.

If you are looking to engage a more flexible workforce that can better meet the dynamic demands of your business there are many apps and platforms that can be used depending on the industry you are in and the type of workforce you are looking for. Shiftpixy provides a platform for both companies and workers that seamlessly links shifts with available shifters ensuring a high-quality workforce exactly when you need them.