Staff are commonly the most expensive element on your balance sheet after purchases. Regardless of whether you’re a high-street name or a disruptive online ecommerce retailer, calculating your exact ROI is essential, and omitting the less obvious overheads of employing staff, which are nevertheless always there, can have dire consequences.
If your peers are taking a leap ahead by advocating the early adoption of new technologies, and you still believe in a formula which has fundamental flaws, don’t be surprised when you see them taking customers away from you and taking a lead. Of course with the perpetual development of autonomous AI solutions, they could not only overtake you, but don’t be surprised to find yourself lapped too.
Below is an example based on a single person on £25k per annum. typically this is just a junior member of your marketing staff
. The taxes and rates may vary between countries, it also illustrates what you may have omitted, included to be seen to be fair and open.
| Working Hours / Hourly Rate | ||
| Hours worked per week | 37.50 | |
| Equivalent hourly rate | £12.82 | |
| Annual Costs | Cost £ | Running Total £ |
| Wages / Salary & NIC’s | ||
| Annual Wages / Salary including overtime / bonuses | 25,000 | 25,000 |
| Class 1 NICs | 3,430 | 28,430 |
| Optional benefits | £ | £ |
| Company car | – | 28,430 |
| Gym | – | 28,430 |
| Health care | – | 28,430 |
| Life assurance | – | 28,430 |
| Pension | – | 28,430 |
| Bonus | – | 28,430 |
| Subtotal for NICs calculation | – | |
| Class 1A NICs (P11D) | – | 28,430 |
| Employee specific costs | £ | £ |
| Software licences | 1,500 | 29,930 |
| Training | 500 | 30,430 |
| Computer & IT support | 500 | 30,930 |
| Apportionment of business costs | £ | £ |
| Share of general overheads (rent, rates, building maintenance, water, heat & light, telephone, insurance, etc) | 500 | 31,430 |
| Consumables (stationery, toner, tea/coffee, toilet paper, etc) | 100 | 31,530 |
| Administrative overheads (HR, payroll, secretarial, appraisals, etc) | 1,000 | 32,530 |
| Other financial costs and potential liabilities | £ | £ |
| Maternity/paternity leave | – | 32,530 |
| Unfair dismissal claims | – | 32,530 |
| Redundancy | – | 32,530 |
| Jury service | – | 32,530 |
| Sick leave holiday pay | – | 32,530 |
| TOTAL EMPLOYEE COSTS | £ | 32,530 |
| Actual productive working days | Days | Running total |
| Weekdays in a year | 261 | 261 |
| Deduct: | ||
| Holidays (minimum is 28 days) | 28 | 233 |
| Formal training | 5 | 228 |
| Sick days | 7 |
235
|
| Wasted/unproductive time (allow 10 mins per working hour) | 38 | 273 |
| The true cost of employee | £ | £ |
| Actual cost per hour | £23.66 | |
| Actual Cost per day (total costs/working days) | £177.49 | |
| Actual cost per year | £46,146.61 | |
| Multiple of salary paid: | 1.85 | times salary |
| NI Rates | ||
| Employer’s NI threshold (£ per week) | 144.00 | |
| Class 1 NICs: | 13.80% |
Hyper-personalisation to boost your marketing
It should be apparent, with the advent of AI technology being infused throughout ecommerce marketing, that solutions which provide wholly autonomous benefits – a means to eradicate human beings, both staff and management from the entire process of communicating with your customers, not only offer enormous benefits as far as cost implications are concerned, removes in the human facilities errors and omissions, and adds a massive increase in the effectiveness of the discipline, often over 5 figure returns.
Therefore before you resolve to harangue your staff again at this week’s meeting, consider instead introducing a hyper-personalisation solution to your stack. This will remove people from the equation, delivering the highest ROI in ecommerce marketing available today – according to both Forrester and McKinsey.
One Response
Thanks for this, it is an exceptionally helpful article. I had been using their gross salary, and completely forgot all the other things, like holidays, training and sick leave etc. It makes for much more detailed calculations.