What do you *really* cost?

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I stated in What do you cost?, many of those in salaried positions do not take the time to sit down and figure out what their rate per hour is. But, what I did not mention is that a salary is only part of an employee’s cost to a business. In fact, from an employers perspective, full-time employees may, in fact, be a liability. Let me explain.

Salary alone is only part of what many employers call your total compensation package. This includes things like retirement matching, paid vacation time, company stock, and healthcare apportionment. Added all up, your salary may only be 50% (or less, or more) of what that employer feels they are actually paying you. But we are not done yet.

You see, there are human resources costs associated with employing you. You, being a human, use up commodities like they are going out of style ā€” like paper, pens, toilet tissue, etc. You use up utilities like water and electricity. Plus, you are often times inefficient and unproductive. They can’t even get rid of you without cost. They might have to pay unemployment insurance, severance, perhaps still contribute to a pension, etc.

The fact is, to many companies, employees are simply automation ā€” costly automation at that. You hire people to either do the tasks that you can’t do alone or the tasks you don’t want to do yourself. Therefore, more often than not, employers are always looking to streamline the cost, management, and efficiency of such automation. No wonder they would love to replace you with a robot (and often treat you as one). No wonder, as well, that as their profits and stocks continue to rise, they are in no rush to hire people back.

Now, I am generalizing here but I am also using some hard truths that can’t be denied. My goal here is to try to provide you with some understanding of how you might be perceived from an employer’s standpoint. Especially in a large corporation where the person making the choice of laying off a few thousand people next week likely only sees you as a number on the spreadsheet. It will do you well to understand what that number is and why it is likely far larger than you think.

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