How much do your ecommerce staff really cost? Staff are commonly the most expensive element on your Balance Sheet after purchases. Regardless of whether you’re a high-street name, or booming 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’re still believing 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 marketing automation, 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 marketing person. 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. If you want a more accurate calculation based on your own staff, there are many places online for your assistance.
| 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% |
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.