The Actual Cost Of Employment

The actual total employment cost is usually 50% to 100% above the salary. True employment costs can be shocking. People often think of salary as total employment cost, but there is really more to it than just that, here’s why I say so.?

Employer Taxes, Insurance, Pension Contributions. Do these terms ring a bell? Most countries have private healthcare or some sort of healthcare contribution (in the UK we also have costs like SSP), and every employer is expected to cater for these costs,?

Then we move on to ensuring employee productivity, employer has to cater for office costs, infrastructure, hardware, and all the tools they may deem necessary for them to have whilst working.?

On top of all the basics are the recruitment costs, training costs, and also the costs of retention.

Thirdly, there are staff benefits and bonuses. In addition, all administrative and HR staff assist in managing internal staff and checking salaries and compliance.

As a little extra spice, you can reserve a certain amount for proceedings, claims, or employee grievances that may occur from time to time.

All of these basic costs can easily be added from 30% to 60% in addition to your salary. Office, infrastructure, and recruitment costs can easily be added from 50% to 100% in addition to salaries. So an $80,000 employee will probably cost between $ 112,000 and $ 160,000 in total.

When you add the Great Resignation, labor shortages, rising inflation, and soaring salaries - things are looking pretty expensive.

The recruitment of employees should not be underestimated. It's no wonder employers are sweating.?

And even if you have the money to hire it, finding the people you need is not easy ...

Heads Up!!

Are you aware that if you offshore to the Philippines, you still incur on top of the salary costs? It is pretty much the same as in your own country. The expenses you have to endure in the Philippines can also add roughly 40% - 90% of costs. Kinda makes you feel like it’s all the same right? Because you still have to pay their benefits, taxes, healthcare, and some proper office equipment to ensure productivity.?

Maybe it’s not the same, if one is to argue, because, in return, you get full-time dedicated staff, for a fraction of the cost, plus all the mechanics of employing someone and providing facilities and infrastructure - is all done for you.?

So yes, the costs also add up.? Even when outsourcing.? But remember: offshore staffing should still save you 50% to 70% on your all-in staffing costs.

However, if you offshore via YouPro Contact, with offices in Harare, Zimbabwe, the only thing that you pay for is the “hours worked” by the person/team that you hire.?

Question for your business:

What are the true all-in employment costs for your business? How much are you really spending??