Cost of employee

What is the true cost of an employee?

Employees are vital to business because they “perform the daily tasks,” the business needs. That can be anything from concept designs through to loading the dishwahser! 

We employ people to carry out roles that the business requires in order to operate and grow – it’s as simple as that. We don’t employ people because they look nice, we don’t employ people because we met them in the pub and thought “they were a nice guy”. We employ them because we need roles filled to operate and grow the business.

Now employees cost money, operating the business costs money, growing the business costs money. Its typically money well spent, although sometimes it’s not.

Just sometimes employees don’t perform well, sometimes they are ill, sometimes they have accidents at work, and sometimes they like to question us legally for the business decisions we have to make. 

These are all “Business Cost Risks” which as employers we mitigate as best we can. We will ensure our employees are happy and safe at work, feel fulfilled in their job role, gain development and growth plans, are paid a good wage, provided with a pension and other benefits, have a nice office to work in and time off for holidays. 

But what if you could totally mitigate those business risks. What if you could pay for a ready-made team that doesn’t need training, doesn’t need a pay rise for completing an exam and doesn’t need to be paid to sit in Benidorm with Sangria in hand? What if you can totally erase all the risks of the employer – employee relationship – No sick pay, no benefits to pay, no holiday, training etc. Surely you would do that. Wouldn’t you?

That is exactly what outsourcing is. Pay a set rate for the specific task – a rate relevant to the type of task, which 100% guarantees that task is completed in a timely and regulatory manner and to 100% accuracy. That’s what outsourcing is. And guess what – if one of those areas falls short – the accuracy drops to 90% for example – then YOU DON’T PAY for that task; you get it fixed and done properly, but this time for free.

You’d definitely do that wouldn’t you? 

What if you wanted to travel the world for 8 weeks and ensure your team still run your business and ensured the tasks were completed, clients were seen to and business operations maintained? 

You could easily do that if you used an outsourced team.

Surely image

Please do not think – she is so anti staff! That is really not the case after alI, there are 20 members of staff in our business and although we outsource some roles for efficiciency to obtain the best person at the most approporiate cost, we also love our employees and do everything possible to keep them happy and maintain great wellbeing and feeling of purpose. We have employees because that is the most appropriate fit for our business model. 

Whether you have no staff, some staff and some outsouring or just internal staff is a decision you as a business owner have to make. You need the most efficient for both cost and growth and your own personal freedom of stresses. We can and do support our clients in all these scenarios. Having Key people in the business as employees liasing with our team and acting as management of case work works very well. The blended option provides sustainabliltiy and freedom to grow or retract easily. If you have 1 or 2 key employees and then outsource the rest, you can easily turn off outsourcing or increase outsourcing as the business moves forward. 

Outsourcing image

Costs of Outsourcing Compared to internal staff: 

“Outsourcing costs more per hour than Sally in reception” –  “She gets £25,000 a year and has been in our business for years, receiving more holiday and pay as the years go by. She ONLY costs me £25,000.” 

Well no she doesn’t. Sally costs your business £45,462.89 a year!  

Let me show you how. The chart below shows a standard employee costing chart for the tax year 2013.  

Cost of employee image

Over £45k for Sally to sit in reception and answer the phone! WOW! How many times a day does she ACTUALLY answer the phone, 5, 10, 20? Let’s assume Sally receives a massive 20 calls a day. That’s a lot of talking. If we said each call took 15 minutes to talk, make notes and add a task to a back-office system that’s 5 hours a day sally would be talking and typing. 

If you outsourced Sally’s role to our team, the cost would be £37,800 over the year. At a rate of £31.50 per hour – or £7.87 per call and note taking. 

That’s for 5 hours of work a day every day. No holiday breaks, no sickness breaks, solid call answering every day. 

A cost saving of £7662.89 on just one employee. 

Now let’s assume you used our new virtual receptionist service. That’s simply a call answering service – no admin completion – just receive the call and make notes from the call. That service is only £397 per month for the first 50 calls thereafter £4.97 a call. 

So let’s do the math – this service would cost your business over the year the grand total of £33,638. 

This method saves your business £11,824.89 per year and comes with NO Business Cost Risk and NO loss of service! 

So I ask you again, if you could mitigate any Business Cost Risk, if you wanted to ensure constant service at 100% accuracy, if you could ensure the tasks are done and that you only pay for the time it’s taken to complete them, if you could relax knowing you don’t need to manage a team whilst on holiday, if you could get money back for when things go wrong…

Why wouldn’t you? 

outsourcing image

Share this post