The Impact of Part-time Labor on Firm Efficiency: The Role of Task Complexity

Organizations frequently employ part-time workers to facilitate agility in responding to changing demand patterns. However, this operational strategy introduces coordination costs, particularly in scenarios involving complex tasks. In this study, it is posited that the employment of part-time labor incurs coordination costs, especially in situations characterized by high task complexity. Conversely, in settings with low task complexity, such costs are diminished. Consequently, the overall effect of part-time labor on firm efficiency remains ambiguous in equilibrium. To address this gap, this paper investigates the influence of part-time labor on firm efficiency and examine whether this impact is contingent on the complexity of tasks undertaken by firms. The findings reveal a negative average correlation between firms’ utilization of part-time labor and operating efficiency, implying that, on average, any potential efficiency gains derived from employing part-time workers are counteracted by increased coordination costs. Furthermore, the analysis indicates that this adverse relationship is amplified for firms dealing with higher levels of task complexity. These results underscore the nuanced interplay between part-time labor, task complexity, and firm efficiency, providing valuable insights for organizational decision-making and resource allocation strategies.