There are many benefits to hiring full time employees. They will generally have a greater level of commitment and be more likely to perform a variety of different tasks and learn new skills. Also, the hourly wage is often much less than a contractor or casual employee because of the job security and entitlements. But when taking on permanent staff you need to be very careful that you take into account all of the costs involved. You then need to weigh up these costs against the expected increased productivity that this new employee will bring, and ultimately how this affects your business’s profitability.
You may find that the additional benefits outweigh the additional costs, or that you are better off leaving things as they are.
If you are time-poor then employing someone to help you at a lower rate than your own can leave you with more time for chargeable work & actually be financially beneficial
There are many hidden costs associated with taking on new staff.
• Recruiting – You need to consider the time and costs associated with advertising, selecting and interviewing applicants. For some businesses this could mean a lengthy process.
• Training – Then once you’ve decided on a new employee, there is the time and costs involved in ongoing training so they’re familiar with the systems and processes and can grow into their new job and work effectively with other employees. Setting procedures up to minimise supervision requirements is time consuming initially, but will pay off over time.
• Space – There may also be the expense associated with improving the infrastructure of your business premises such as creating space that another employee will need. The business may even need to move somewhere else in order to employ new people.
• Equipment – You also need to consider other factors such as the cost of the equipment they will require eg protective clothing, tools, extra workstations.
• On-costs – Apart from the obvious cost of paying a base salary, there are also the costs relating to employee entitlements such as setting up and preparing regular payroll in a compliant manner, superannuation, annual leave, sick leave, public holidays and workers’ compensation insurance. These additional costs can add 25% to 30% to the basic wage.
After careful consideration of these expenses, you will be in a much better position to decide whether or not it’s a good idea to take on permanent staff or to just continue resourcing your business with casual employees and contractors.