You might think this is a simple question to answer. If you need a new employee it should be straight forward to work out the hourly rate or the annual salary…….. and bingo!
Well almost – but not quite. Have you thought about all the hidden costs and built them into your business figures?
You might think that you’re going to pay your new employee say £15,000 per year, but on top of you need to allow for Employer’s National Insurance Contributions.
And you might have told your new employee that they will work a 37 hour week, but how many productive hours will they really work during the year after you have taken out statutory holiday allowance, sick leave, training, and other non productive time (like visiting the loo, brewing coffee, surfing the internet, socialising).
Suddenly the picture starts to look quite different. That £15,000 a year you started with is growing bigger.
It’s no longer the £7.80 per hour (for a 37 hour week) that you budgeted.
In fact, it will be almost double that amount. A £15,000 per year employee is likely to cost almost £28,000 (that’s £14.51 per hour).
And if you offer company benefits (even simple ones like free tea or coffee) the cost will be higher.
To find out the accurate answer to the question “how much does it cost to employ someone?” and to test your own figures then go to our True Cost of an Employee Calculator
And then ask yourself whether taking on a new employee is essential for your business or whether you could contract the job to a specialist outsource service.