Political Calculations linked to the post that I submitted to the Festival of Frugality a couple of weeks ago and in taking a look around the site I found this interesting calculator in a post called: How Much Does it Cost to Employ You?
The calculator allows you to enter some numbers which calculate how much it costs your employer to keep you on the payroll. It wasn’t as simple for me as I don’t work full time, I only work 32 hours. Ironman, the author of the Political Calculations blog explained that I could calculate my hourly wage and still use the calculator. I did do that, but the lower half still wanted to calculate a salary based on full time.
Also, it shows in the second portion how much is estimated that my employer pays for my health insurance. My employer pays almost six hundred dollars a month for each employee, which is nearly twice the estimate on the calculator. Based on my results, it looks like my employer pays $6.50 above what I’m paid. We do have health insurance, as I mentioned, but no retirement benefits.
The other costs for employers are the overhead of your office, electricity, phones, etc. A smart business owner who has had financial training would calculate these things down to the penny, to know exactly how much money it was costing them to keep one person versus another on the payroll.
Which leads me to ask the question, when does the amount employees are paid become a matter of hiring vs. not hiring?
Most employees at Walmart don’t bring in money for the company as say an automobile salesperson would do for a car company. But the Walmart employee can indirectly affect his value to the company in the way he performs his job. If he is asked where the mini-recorders are at, and he tells the customer they don’t carry such a thing, he just cost the company money, unless the customer is tenacious enough to peruse the store until the item is located. If the employee is grumpy while cashiering, maybe the customer will start patronizing Target instead rather than deal with the bad attitude.
At that point, it would behoove Walmart to have quarterly reviews of employees and regular training to make sure they know perform in ways that encourage customers to come back and shop there.
An auto dealer would definitely want to keep the highest selling salespeople on board as they are well able to earn their keep.
If your business sends out technicians to work with customers, you pay your technicians $25 an hour but the business can command $80 an hour, it would be a good idea – if there is enough demand – to hire more technicians. It would actually be a bad business move to try and keep only two technicians on board if you had enough demand to employ four. The more money your technicians make, the more money you would make in the end.
I’d be interested to see what you think Political Calculations’ calculator.