Staff – The true cost of employment

When looking to recruit new staff the main consideration is the cost to the business, the impact of recruiting, and the knock on effect to the cash flow.

In the first instance, businesses need to evaluate the company’s requirements.

  • Do you need a full-time employee?
  • Maybe part time?
  • How would part time hours be best split to suit the business?
  • What  days or hours are staff required for?
  • What salary should the post hold?
  • Can the business afford it?

All of these questions need answering before addressing the issue of writing a job description and choosing which method to advertise. Which as a result brings more questions.

  • Do I employ a recruitment agency?
  • Maybe I advertise in the press or online?
  • Which medium of advertising is likely to attract the perfect person for us?

Once advertised the applications then start to arrive, and you have to shortlist suitable potential staff. Interviews have to be factored in. This again takes you away from focusing on your business which, subsequently, reduces your productivity in the short term.

So you’ve found the right new member of staff and have signed contracts of employment. As a result of this, you now face the time and financial costs of induction, the probationary period, and any training that may be required. And you thought all it was going to cost was the salary!

The starting point is the staff salaries. There are not only costs to recruiting and training a member of staff but there are also vast time constraints in doing so.

When your new staff member has started, and the training has been provided does the expense stop there? NO!

Hidden staff costs

An Illustration:

  • An employee on minimum wage would currently earn a salary of £14976.00 per annum.
  • Making the required contributions: pension, national insurance, holidays, sick pay and consumables, the employee would cost the company on average £19793.34 per annum.
  • If maternity pay was required, this figure would increase to £21132.06 per annum.
  • That’s 24% increase to the basic salary in additional costs.
  • When including the following costs: recruitment, training, jury service, redundancy, employment claims, bonus’s, equipment & support, company benefits.
  • When taking these costs into account the increase to basic salary could reach in excess of a 30% increase!

Question the effectiveness of employing staff. Would it be more cost effective to outsource to keep costs down and still provide you with consequently the same level of support?

In conclusion, if you want to reduce your existing staffing overheads, or you need more staff but can ill afford the extra expense, where do you go? what do you do? Do you recruit? Do you use temp staff? or rather outsource to a company who offers personalised knowledge about your business, who offers a highly skilled service, and provides you with a professional and dedicated service?

If you would like to know how much outsourcing your office service could save you please talk to us, and let us take the headache out of your most expensive overhead.

Do what you do best, and outsource the rest!



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