Bear in mind your experience is from a large national employer and mine is extensive from a multitude of various SME's, who are the majority of employers..
and my wife, who is the CFO of a multinational HR/Payroll provider....
Edit: when she woke up, I asked her what she thought....
She said a larger company would be looking toward 2-2.5x gross salary, a smaller one 1.25-1.5x gross salary with regard to employee costs overall. She said the absolute lowest will be 1.15x and that would be very unusual as it covers virtually only the Employers NI contributions and a bit of paperwork,(unless they are beneath the thresholds). She did point out that it is virtually impossible to give a formula as it depends on too many factors and each company will tailor their costs according to their needs, and many people forget to factor in retention and turnover when costing a new employee.
Oh, and she said we were a bit weird for discussing this so early in the morning.....(I didn't tell her, it is technically late at night for me....)
On the job, especially for unskilled manual work. Doesn't necessarily mean expensive outsourced training. And this is a short term investment, not an ongoing employee cost.
it doesn't have to be outsourced to be of significant cost to a company, On the job training still requires allocation of resources from the business and the costs applied to that, along with the added supervisory and management oversight and compliance and the various other factors that you are not considering. Also whie training may be a variable cost, it is not simply one that is a 'one off', especially as low paid manual employment is more likely to have higher staff turnover and with SMEs may need to train an individual on several tasks rather than one, as well as on going training in ancillary aspects such as Health and Safety, Manual Handling and so on...
SSP would only become an extra 'cost' if you employed someone else to cover that period. I've only known one SME that has to do this, and that's for a specific reason. Also a SME can generally recover part of the SSP if it is significant.
Yet is still costs to administrate, Unless you do this without charge? Not to mention lost productivity or the need to cover the workload, either by temping or by use of overtime or extentions of deadlines etc....all costing money.
SMP is little cost to any employer. Large companies can reclaim 98% of SMP and SME's reclaim 102%
one of the biggest complaints I hear my wife go ln about is Maternity leave and the costs to the business, hers and those they manage..(which range from multinationals to small locals)
Advertising is free on the job site or £50 in a local rag.
Again that is a very simplistic way to look at the overall picture, while you may get some feedback from local paper advertising, many firms are forced to go further afield or use more aggressive recruitment methods, and this increases costs overall, and like I said you can state, quite rightly, that this could only cost x, but overall the averages across a range of business models would increase that to y......
Apart from standard employers liability? which ÷ no. Of employees won't add much on to an individuals cost
Again with the minimum, while the more employees the lower the unit cost, it can still be a significant cost....
again, a cost to many businesses....both large and small.
Except when shades just mentioned size of business and you said no, not proportionally...
In many ways the impact on a small business is greater than that of a larger one...the converse can also be true.
Yes the extra cost is extremely variable, and in no way is the 'average' extra cost 100% of the gross wage, as you stated.
the rule of thumb when planning staff costs is precisely that......
Then you think incorrectly. See, I don't just run payroll in isolation but singularly run the full financial aspects of half a dozen SME's currently, ranging from a nursery, internet company, landscape gardener, event cater, so I have a perfect understanding of where every penny of expenditure is allocated.
no disrespect, but 6 SMEs doesn't constitute a representative overview of the 'average' costs to a wide range of businesses across a range of demographics.
We are discussing averages and how they relate to assessing whether the minimum wage is fair/warranted in the way it is stepped and addressing what Permabanned stated about the costs being the same if a firm employed two people on the lower rate as compared to the higher rate....
Do the figures you gave include ALL costs to the business in regard to employing two 17 year olds as opposed to a single 21 year old? And is it thetefore cheaper and more productive to hire the two 17 year olds over the 21 year old, and therefore is Permabanneds statements justified?
Which is another reason why they are paid less, not that it is an extra cost
I think you need to look at the post by permabanned to which I was replying before you continue tbh....
And tbh, the difference in the statutory minimum break requirements are minimal and have no real world impacts.
Not for a company with 5,000 employees it is not. Or one like my old one with 43,000....the financial impact of increased regulation can be significant. That is the thing about discussing an average, it isn't limited to half a dozen sole traders and employers with less than 10 staff.....
I am talking about an average across the gamut of industry, like I said, some SMEs and sole traders taking on staff for the first time will see their costs as low as 25% of the gross wage of their employee...maybe lower, but others will see that being as high as 150%.....which is why I clarified it is a rule of thumb, not a hard and fast rule......consider that many firms who employ young people in unskilled jobs are actually quite large, especially in the retail sectors and their overheads will be significantly different from the Nursery or Gardener on your books....
Source? Especially for the second statement.
Edit: I hate having these sorts of long conversations on a tablet, too fiddly with the quoting!
We paid all our staff the same rates for the same jobs...regardless of their age, an 18 year old who had just passed their PCV would go into service on the same rate as the 30 year old you passed 10 years prior.
And I agree, quoting is a pain on my ipad.....
And interesting calculator to mess about with:
http://www.itcenta.co.uk/it-support/employee-cost-calculator
And remember, I said there is no generic set rule for this, I gave a rough average that I think fairly represents the whole range of business models in the UK as a general rule of thumb when considering the true cost of an employee to a firm......some will be far less than this, and smaller low skilled smes will fall into this category, but conversely some will be far more than this, for different reasons....
There are plenty of sources on the net that will give fairly similar estimates. One gives a breakdown according to category/job type:
I'd like to share with you a turnover costs summary mainly sourced from Jack Phillips Center for Research. The study puts turnover cost ranges as percentage of annual base salary for different job types and categories:
Entry level-non skilled worker ; 30 - 50%
Service/Production worker; 40 - 70%
Skilled Hourly; 75 - 100%
Clerical/Administrative; 50 - 80%
Professional ; 75 - 125%
Technical ; 100 - 150%
IT Specialist; 200 - 400%
Supervisor ; 100 - 150%
Department Manager; 125 - 200%
http://humancapitalstrategy.blogspot.co.uk/2009/04/calculating-employee-turnover-cost.html
, This is going to be the beggining of an era - the TBAG ERA (TheBritishAsianGeezer)