How Much Does An Employee Cost? [AUDIO]
Your salary isn’t the only money that’s put out by your employer every year. When considering all the extras, some experts claim the total could end up being 30 percent more than what you’re paid.
The highest expense is the health care insurance paid by employers. Companies are also billed to cover unemployment insurance, Medicare and Social Security taxes, and 401(k) benefits if they choose to match employees’ contributions.
Training for new workers can also be expensive in terms of money and time, as well as the cost to replace a full-time worker.
Joy Schneer, professor of management at Rider University, said a boss is making a “real statement” when they decide to take on a full-time employee.
“I think employees need to realize that and understand the value and the investment the employer is putting into them,” Schneer said. “It’s not a given in this day and age.”
Schneer said because of the all these additional costs, some employers are trying to avoid hiring at full-time with all the bells and whistles attached.
“A lot of companies are hiring people on as contract employees, where they don’t pay all the benefits,” Schneer explained, noting two classes in the workforce – full-times and contingent employees.