How much does it cost your company to hire an employee? CottageCountryNow.ca writes about the true cost of employees in a small business and small municipalities. It defines the cost of hiring an employee vs. outsourcing to a professional, and their results say that in some cases, it’s just more cost effective to outsource (interestingly enough, they’re using one of our business services as an example—bookkeeping!). Although it concentrates on business owners in Muskoka, we can’t help but wonder if this is an issue for small business owners in our own City ofVancouver and the Lower Mainland.
Some interesting facts the article states, a full-time bookkeeping employee at $15 an hour, you would imagine, should only cost the business $30,000 in salary a year. But, the “true cost” they say, is more like $75,000 a year with all the hidden costs of an office, computer, telephone, stationary etc. We would add to this list, training and down time (employees are given vacation and sick time, but an outsourced professional bills the hours they work).
A big chunk of the time is allotted to supervising the employee; the article states 200 to 250 hours per year! This reflects in the cost of an employee, and that $15 per hour wage comes out to be more like $50 per hour. It goes without say that a professional service provider does not need to be supervised, and even though they charge a higher rate, their proficiency and expertise will reflect in the job, and make the employer’s life easier.
Now, does this mean that outsourcing is always the best way to go for small businesses? We would say no. There are many jobs in the company that are best done by full-time employees; but, when it comes to getting a specialist in to get best results for fair pay, our vote is for outsourcing.
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