Cost of an employee

We employ people to carry out roles that the business requires in order to operate and grow – it’s as simple as that. We employ them because we need roles filled to operate and grow the business. However, Employees cost money, operating the business costs money, growing the business costs money. Its typically money well spent, although sometimes it’s not.

Just sometimes employees don’t perform well, sometimes they are ill, sometimes they have accidents at work, and sometimes they like to question us legally for the business decisions we have to make. These are what we call “business risks”.  

Outsourcing these tasks doesn’t just minimise these business risks – it eliminates them. 

Why have these risks? Why not let someone else deal with these risks – like us? We love employees!

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But it’s so expensive” 

Some advisers feel outsourcing is expensive. The reason being that they directly compare the hourly rate we charge to the hourly rate of an employees salary. But thats not accurate – that hourly rate of the employee isn’t what that employee actually costs you.


So what is the cost of Outsourcing Compared to internal staff?

“Outsourcing costs more per hour than Sally in reception – she gets £25,000 a year and has been in our business for years, receiving more holiday and pay as the years go by.

She ONLY costs me £25,000.”

Well – no she doesn’t. 

Sally costs your business 

£45,462.89 a year!

Let’s see how… the chart below shows a standard employee costing chart for the tax year 2013.

So you are paying £45,462.89 for Sally to work in reception and answer the phone. If that is Sally’s only task it starts to look a bit more expensive. Ask yourself, “How many times a day does she actually answer the phone, 5, 10, 20”? Let’s assume Sally receives a massive 20 calls a day. That’s a lot of talking. If we said each call took 15 minutes to talk, make notes and add a task to a back-office system that’s 5 hours a day sally would be talking and typing.

If you outsourced Sally’s role to our virtual receptionist service which is a call answering service – no admin completion – just receive the call and make notes from the call. That service is only £499 per month (Including VAT), or £5988 per year.

This method saves your business £39,474.89 per year and comes with no business risk and no loss of service.