Providing a flexible approach to service provision for UK NFPs, businesses & organisations
COST
CALCULATOR
Hiring vs outsourcing cost calculator
Think hiring in-house is the cheaper option? Guess again!
Many business owners initially believe that hiring an in-house employee at £13/hour is more cost-effective than outsourcing. At first glance, that lower rate seems like a significant saving compared to our starting rate of £28/hour.
However, the true cost of hiring goes far beyond just their hourly wage...
THE COST
OF HIRING
To help you make an informed decision, we’ve collaborated with ARTEMA to provide this hiring vs outsourcing cost calculator, which breaks down the often-overlooked hidden costs of in-house employees.
HIDDEN COSTS OF HIRING:
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Training costs: Time spent onboarding and training new employees, including time taken by your current team.
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Ongoing IT support: Maintenance, troubleshooting and software costs.
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Administrative overheads: HR, payroll management and other internal administrative tasks.
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Unproductive time: Small breaks and personal tasks add up. With Dolphin Outsourcing, the clock stops when we take breaks, so you only pay for productive work.
LET'S BREAK
IT DOWN
INCLUSION | COST |
|---|---|
Basic annual salary | £ 26,000.00 |
Hours worked per week | 37 hrs |
Basic salary hourly rate | £ 13.51 |
Pension | £ 720.00 |
Total employers NI | £ 2,651.81 |
Software licences | £ 300.00 |
Training and memberships | £ 3,000.00 |
Share of overheads | £ 500.00 |
Administrative overheads | £ 2,000.00 |
Weekdays in a year | 260 days |
Holidays | 28 days |
Formal training | 5 days |
Sick days | 5 days |
Unproductive time | 15 mins / hr |
When you factor in all of these costs, the real cost of hiring jumps to £28.28/hour - which is a x2.26 multiple!
And that is likely a conservative figure!
UK BUDGET
ANNOUNCMENT
This calculator and workings do not include the Budget announcement for 2025. Other factors you should consider when trying to decide if you want to employ over using a company like ours (or a freelancer) are that there will be additional costs. Some of the key areas are:
National Living Wage Increase by 6.7%
National Insurance contributions by employers will rise to 15%
NI threshold to reduce from £9,100 to £5,000
We strongly recommend researching how the changes will affect your business. The above data has been found on the Simply Business website HERE.
