Are you really pricing the cost of your team?
Hiring new team members is part and parcel of life for a growing business. It often is a sign of success that things are going well – but it can also create a financial strain if not planned properly.
If you run an MSP, tech firm, or service-based business, you might budget for a team member's salary and be done.
But the true cost of hiring can be 25 – 40% higher than just the salary alone. If you’re not planning for that, you could be in for a bit of financial trouble and be on the road to draining your financial reserves.
5 things to factor in:
Employer national insurance contributions (currently 15% of the salary above an annual £5,000 – there is an annual allowance up to £10,500 that can be claimed if you meet certain criteria National Insurance rates and categories: Contribution rates - National Insurance rates and categories: Contribution rates - GOV.UK
Pension contributions (minimum 3% of qualifying earnings)
Software, hardware and equipment (laptops, licences, even a desk if you’re office based)
Training and onboarding time
Holiday pay, sick pay, and coverage
The fix
Make sure you forecast the real cost before you hire.
This should include full salary +NI + Pension + an allowance for tools, software and support and a 10% buffer for inefficiencies.
When you plan properly you can make sure you price accordingly and know that you are hiring with confidence.
We help clients build hiring costs into their forecasts so they know exactly what they can afford and what additional revenue they may need to generate to sustain or increase current profit levels.
Want help? Book a discovery call here and let's plan for your growth. https://calendly.com/hayley-corbar/new-client-discovery-call
