The Cost of Hiring Staff - Can You Afford This?

The Cost of Hiring Staff - Can You Afford This?

Dr. Linda Hancock

ABOUT THE AUTHOR

Dr. Hancock has written a regular weekly column entitled “All Psyched Up” for newspapers in two Canadian provinces for more than a dozen years. Over the years, her readers and clients have said that they have benefited from her common-sense solutions, wisdom, and sense of humour. Dr. Linda Hancock, the author of “Life is An Adventure…every step of the way” and “Open for Business Success” is a Registered Psychologist who has a private practice in Medicine Hat. She can be reached at 403-529-6877 or through email office@drlindahancock.com

Published

January 14 2011

Sometimes we can feel overwhelmed and believe that hiring staff for the business will help to reduce or eliminate our workload and therefore reduce the stress. There are so many costs that are associated with staff, however, so it would be very important that you first of all can be assured that the hiring will actually pay for itself by freeing you to generate more income and secondly not end up straining the business because of costs that you might not have considered.

Let's take a minute to think about all the costs of hiring staff

1. Wages - It doesn't matter whether you are thinking about an hourly, weekly, monthly or yearly rate of pay, the fact is that this is just the base amount that is required when hiring staff. You will need to review and probably increase this amount for merit and/or as time passes because the employee will likely be asking for or expecting this.

2. Benefits - Depending on what package you might be offering the staff; you are likely looking at a cost of at least 17% above the wage. Employers usually provide medical, dental, life and disability insurance for employees and their family members.

3. Vacation time - If you have paid staff, you will likely be required to provide paid time off each year according to government legislation.

4. Sick leave - Again, you will need to check legislation to determine if time off for illness is required.

5. Non-productive time - Even though it might be difficult to estimate at time of hire, there will likely be times when the employee might not be working such as if you are away from the office, during statutory holidays or when the business cycle is at a low. If you are creative and well organized, however, you might be able to set up specific projects that could be done during these periods of time.

Hiring staff means that you have quite a bit of responsibility. The person or persons who you hire might be depending on you to ensure that they can feed and look after their family. They will also need to know that you can offer them an opportunity to use their skills, grow in their careers and look forward to good employment in the future. It is therefore important that before you ever offer anyone a job that you consider all the costs that you will be required to pay.