Your business has taken off and you’re overwhelmed with all the work that you have on your plate, the emails have not stopped pinging and the phone has not stopped ringing.
Which way do you turn?
So you think its time to hire a new member of staff how much is that going to cost? You think you have budgeted for this and have covered the salary in your forecasting for the year, but hang on have you factored in the on costs when adding a new employee to your business
Have you considered the other costs?
Starting with recruitment you can use a variety of social media platforms and job sites or a recruitment agency, who will take a whopping 20 to 30% of final salary.
Government has indicated that an average salary in the UK is in the region of £27600
Feeling generous and business has done well, you may want to reward your employee with a bonus, 6% is the average for bonus payments
Can’t get away from this one, National Insurance the standard rate is 13.8% (inclusive of bonus and overtime)
Pension – from April 2019 the expectation for employees is to pay a minimum of 3% towards an employee’s pension.
Training – this is dependent on the type of company / business you are, how much training is needed, or will you be funding external training. On average in the UK £1000 is the amount spent on training an employee.
You will need to provide a desk, chair, IT equipment, phone, and any other items necessary to support the employee in work space.
What are the costs?
Advertising costs –social media and job sites or use a recruitment agency estimated cost £3000
HR on boarding/off boarding maternity leave cover, sick days, company cars, software licences approx. £8000
Salary – government figures indicate average salary is £27600
Bonus – government figures indicate bonus paid at approx. 6% of pay, £1656
National insurance class 1 national insurance is 13.8% of pay, £4037
Pension auto enrolment, company has to pay 3% towards pension £828
Office space & equipment £4800 (The IPD Blue Chip Office index)
Training – a UK company spends on average £1068 per year on an employee’s training (Bersin)
Holidays – majority of workers are entitled to 28 days holidays per year, their work will need to be covered by another cost of £2,972
Oh and let’s not forget your time either, how many hours you have spent getting advert out, shortlisting, interviewing – add on what you pay yourself per hour.
So all in all the cost of £27600 that you had budgeted for has now risen to an estimated £54000 for the first year of employment.
Want another solution, of course you do,
Why spend all that when you can have me as a virtual assistant, I can smash those costs for you, delegate those tasks, it can be anything from data entry, process mapping, procedure development, copy typing, letters, reports, research, invoices, estimates, project management / coordination – whatever you want, plus you would not have to find the new employee work when they are scratching their heads looking for things to do.
Even if you took my top package of £20 hours a month at £540.00 pm, you would not be anywhere near the costs for a permanent staff member. I am responsible for my own National Insurance, Tax, equipment and office space, I won’t need a company car, (but if you wanted to get me one I would love it !)
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Note: these figures are based on 2017 -with information provided by BE Offices