If you decide to build your own full time inhouse team for your business to implement your internet marketing activities, then it is important for you to be able to calculate the real cost of employees when hiring.
Most business owners make the mistake of leaving out a lot of costs that should be taken into account.
That’s just the employee costs. Apart from that, there are other costs that are missed by business owners.
So, taking into account all of the costs, how does one know the real cost of recruiting employees for your own online marketing team?
There is no accurate standard formula for calculating the total cost of an employee across industries. That number is affected by too many factors (type of job, location, industry, and the perks the companies offer) for anyone to come out and forecast it with accuracy.
However, experienced recruiters would suggest business owners to expect employees to cost 25-30% more than their base salary annually.
Some startup entrepreneurs say that it costs them about $250-300 per month to cover all of the overheads for each employee. This seems to be standard across the startup world.
Estimates also range from 1.5 to 3 times the salary for the final cost of an employee.
Therefore, while adding an employee might cost you only $30,000 in salary, the additional costs to the business might be $90,000.
According to the DOL (Department of Labor), an average employee costs $25.93 per hour when you factor in costs of salaries, benefits, and taxes. This is the real employee cost after you factor in a multiplier for non-salary costs:
|Employee Cost||Multiplier||Salary of $50K||Salary of $100K|
|Benefits||0.2 – 0.4||$10,000 – 20,000||$20,000 – 40,000|
|Rent, Equipment, Training, Etc.||0.5 – 1.3||$25,000 – 65,000||$50,000 – 130,000|
|Total||1.7 – 2.7||$85,000 – 135,000||$170,000 – 270,000|
In the UK, it is estimated that the cost of a vacancy being filled is between £4333 and £7750 on average (2007)
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