9/28/2022 4:03:07 PM
Our analysis shows an annual cost savings of $5,692.96 per employee.
If a company is paying their internal worker $14.00/hour, their total yearly cost for employing the worker is $51,411.36.
If they pay the same worker $14.00/hour through a staffing company, and the staffing company has a mark-up of 36.5%, they will annually pay $39,748.80 for the same worker. Company costs for internal staffing include payroll taxes (FICA, FUTA, SUTA), company benefits, onboarding administration, worker’s compensation, etc. In parallel, prices continue to rise and make hiring more expensive. In many states and Commonwealths, SUTA tax rates have doubled or tripled, or states have extended the worker’s compensation threshold. In many cases, SUTA tax increases have increased up 2-8% per worker. Worker’s Compensation insurance, administrative costs, and healthcare benefit costs continue to rise – weekly. Thus, the cost of hiring an employee has become more expensive. (I have provided a full breakdown of costs below.) In the end, a company will likely save more than $5,692.96 per employee, if they utilize a staffing company. Hence, if they have 50 employees hired by a staffing company as opposed to internal hiring, they would have created a yearly savings of $284,648.00. *Please note that savings are likely much greater due to liability costs, bank interest rates rising and additional statutory benefits not listed. | Internal Staffing | | NOTES | Vendor Staffing | | | Hourly Rate | $ 14.00 | | Hourly Pay Rate | $14.00 | | FICA match | $ 0.07650 | | FICA match | N/A | | SUTA match | $ 0.06000 | | SUTA match | N/A | | FUTA match | $ 0.01500 | | FUTA match | N/A | | Sales/Other Tax | $ - | | Sales/Other Tax | N/A | | 401k Match | $ 0.03000 | Average Match for Companies | 401k Match | N/A | | Workers Compensation | $ 0.07000 | | Workers Compensation | N/A | | Medical, Dental, Vision | $ 0.25900 | (Low Cost Plan) | Medical, Dental, Vision | N/A | | Onboarding Administration/Payroll | $ 0.04000 | | Onboarding Administration/Payroll | N/A | | Advertising/Marketing | $ 0.00500 | | Advertising/Marketing | N/A | | Tuition, Life Ins, etc | $ 0.00500 | | Tuition, Life Ins, etc | N/A | | | | Onsite Manager | N/A | | Cost per hour | $ 0.56050 | | | | | Hourly Cost Multiplier | $ 1.56050 | 1 + 0.56050 | | | | | | | | | Company Total Cost Per Hour Worked | $21.85 | 11*1.56050 | Company Total Cost Per Hour Worked | $ 19.11 | | | | Bill Rate rate= $11(x) 36.5% Mark Up | | | Hours Per Year | 2080 | | Hours Per Year | 2080 | | Total Yearly Cost Per Worker | $ 45,441.76 | | Total Yearly Cost Per Worker | $ 39,748.80 | | | | | | | Cost Savings per worker | $ - | | Cost Savings Per Worker Annually | $ 5,692.96 | | | | | | | Number of Workers | 50 | | | | | | | | | | Total Yearly Savings | $ 284,648.00 | |
