Hiring the services of an external all round office and administration professional such as Action Business, makes great business sense because in many cases, it is far more cost effective than employing someone internally. Not quite convinced?
‘How can that be?’ I hear you ask – ‘the hourly rate of a direct hire admin person is/would be less than the hourly you charge?’ But is that really true?
So How Much Does Your Office Assistant Really Cost You?
Lets calculate the hidden costs of hiring a non-income generating employee for your office.
Some estimates put the direct cost of an admin employee being paid around $45000pa at around $60-65,000.00pa. I can show you that the costs to you are actually much higher! I’ve run some quick numbers for you and come up with the following. These approximate total wage figure include Super (9%), leave & Holiday accruals (where entitled) and WorkCover.
Full or part time employee (30-38 hrs/wk)
- Rate of $22/Hr = $30.88/Hr Cost = $247.03/8hr day or $61,017.31pa
- Rate of $25/Hr = $35.09/Hr Cost = $280.72/8hr day or $69,337.85pa
- Rate of $30/Hr = $39.05/Hr Cost = $336.86/8hr day or $83,205.42pa
The direct hire is still looking ok based on these numbers (if you can find, hire and retain the right person with the right skills & dedication into your business). Right?
But – consider the following hidden costs of direct employees to the business. I’m going to add an approximate figure for the daily time consumed by these activities -remember each individual situation will vary & therefore time and costs will differ – we’re just hunting a general indicator here.
- Morning & Afternoon Tea & Coffee Breaks 30 Minutes
- Bathroom Breaks 20 Minutes
- Cigarette Breaks (extra to T & C Breaks) 25 Minutes
- Arrival & Settling in time 10 Minutes
- Office Socializing 20 Minutes
- Personal Business, Internet Surfing, Facebook, Phone Calls 30 Minutes (some place this much higher!)
- Total 2 hours 15 Minutes/Day!
8 Hours less 2hrs15mins = 5Hrs 45 Minutes of actual Productivity Time. Lets recalculate those hourly rates?
Full or part time employee (30-38 hrs/wk)
- $219.44/5.75 productive hours = actual cost of $38.16/Hour (Based on the initial pay rate of $22/Hour)
- $274.24/5.75 productive hours = actual cost of $47.69/Hour (Based on the initial pay rate of $25/Hour)
- $329.12/5.75 productive hours = actual cost of $57.24/Hour (Based on the initial pay rate of $30/Hour)
But Wait – There’s More!
Yes, unfortunately, the above is just the start of your cost commitment when hiring internal employees. Other hidden employer costs include:
- The number 1 biggie – Your Time. From advertising, interviewing, hiring, inducting, training, mentoring, motivating, incentivising to supervising your employee, consider the total hours you spend per week on these HR chores. Multiply those hours by your hourly income generation rate (calculated on the Calculate The Real Value Of Your Time page) and divide by the number of hours you work in a week. This is your time value in $$ that it costs you to employ this person. On average this will be thousands of dollars each year!
- Overtime rates
- A replacement employee when yours is on annual & sick Leave
- Physical Costs such as Office space, furniture, computer & technology, phone & electricity costs, office consumables, tea, coffee, toilet paper
- Extra insurances,
- Payroll tax if your organization is large enough
- Birthday & Christmas gifts
- WorkCover in the event of an injury
- The list goes on!
Spending your money on hiring an income-generating employee such as a direct assistant to yourself or sales assistant makes far more sense than hiring an internal administrative assistant – particularly if your business is not big enough to employ a productive full-time administration person.
Engaging Action Business to take care of your administrative requirements makes far better business sense.
We have:
- A wide-ranging suite of professional office capabilities, that you may find hard to find in a single, economically-priced employee
- You do not engender the sourcing, hiring and engaging costs that can come with a high turnover position (some sources estimate this cost to be $4-$5000.00 per employee to hire and get them up to speed and the average turnover rate is around 2 years – that’s around $2500.00 annually—not to mention your stress!)
- You use us only for the hours and things that you need us for. We can’t make you tea and a bikkie in the mornings, but neither do we stretch out our day waiting for finishing time
- We charge you a flat hourly rate with no hidden costs
- We bill you for only for the actual time we are working on your business. We itemize our work and bill in 15 minute increments
- There are no extra oncosts to you – we have our own office space, technology, phones, office consumables, tea, coffee and toilet paper!
- You can buy us a Christmas gift if you like, but we wont get upset if you don’t
