What is your Actual Per Employee Cost?
Whether your organisation is serious about considering to add-on the resources (i.e. Employee)? If the answer is yes in that scenario organisation overhead cost will increase up to $15/hour per resource. Which means an organisation needs to pay that additional cost of hiring an employee. It is recommended that always think twice before taking such a decision. Most of the time owner’s get surprised to know that on an average an employee cost will actually go between 25%-40% on and above to their compensation amount.
As the organisation is planning to hire next employee, there are additional costs which an employee needs to pay for its resource. These additional costs can come in any form out of the under-mentioned expenses.
How To Calculate Your Employee’s Actual Cost?
Employment Taxes: -
In addition to compensation, i.e. Wages/salary, owner is also responsible to bear the employment taxes. On an average, the mentioned employment taxes cost to bear by employers’ come to 15% of an employee’s wages/salary. Company owners are also responsible for paying social security, un-employment insurance tax along with workman’s compensation insurance etc. In addition to employment taxes.
Paid Holiday: -
A competitive employer also has to offer to employee the paid holidays. Paid holiday includes the vacation, sick leave, paid breaks as per the requirement of local laws. The cost of the mentioned benefits typically depends upon the employee’s compensation, i.e. Wages/salary, the size of the business and the industry standards.
Health Insurance Benefits: -
It is an employer responsibility to provide the health insurance benefits to its employees. It’s a mandatory responsibility falls on the employer, but at the same time it can add a huge cost to the employer. The Business owner has to add the additional cost with respect to premium paid for employee’s health insurance benefits.
Retirement Benefits: -
The Employer is also supposed to offer employee retirement benefits, i.e. Pension. There is equal contribution required in retirement benefits by the employer as well as employee. In precise words employer contributes the equal percentage of employee’s contribution. On an average the employer contributes the 3-6% of the employee’s compensation, i.e. Salary/wages.
Other Overhead Costs: -
There are other additional overhead costs, which employer may not be able to consider-
Office Space – Covers the computer desk, chair, fixed line etc.
Office Supplies – Covers the stationery i.e. Pens, papers and printer toner etc.
New Hiring – Trained the new hiring with respect to expectations.
Additional – Uniforms, maintaining the health club etc.
Now the question appears how an organisation can reduce the cost of an employee, the answer to this question is employer should outsource the work to Rayvat.
What we do: -
We also help in filling the payroll tax forms. By outsourcing the non-core work orgnaisation can expect to achieve cost reduction of as high as 50 percent. We are able to achieve this due to our economics of scale for the process – we spread fixed costs over large volumes of transactions spread across multiple customers. We also have the flexibility of going to the lowest cost locations to perform the job.
There are other reasons as well- examples of processes like those related to HR in a large multi-location company, there are low volume at each specific location but the volume increase considerably once one combines the volumes across all locations. Also, since we use the latest technology and best practice, can streamline the processes better and achieve optimum results in cost, quality and speed.
Even though the processes being outsourced may be non-core and non-critical, but they are core and critical for us. And it is this that makes us more successful at such activities than the company that such outsourced them.
Kindly connect with us on email id: email@example.com with respect to your outsourcing services requirement related to project specific or you can speak to us in person by connecting on the mentioned number (UK):- +44 203 608 9399.