The True Cost of Your Employees
Traditionally, January is the most popular month for changing jobs1. Whether it’s the effect of the Christmas holidays (and a reassessing of the usual work routine) or the idea of “New Year, New Start”, it means that over the next few weeks, many organisations are likely to see a number of staff handing in their notice.
This leaves employers with quite a headache. All companies strive to retain their best employees, and with the on-going skills shortage in digital construction, doing so is crucial to the success and financial stability of the business.
Look for the Hidden Costs
Staff salaries together with generous benefit packages have always been far and away the largest expense for any company. But it goes beyond this. To assess the true cost of each member of staff, we need to see the bigger picture.
Online calculators such as goodcalculators.com/hrm-calculators look at the top line salary, tax and employer’s NI. For instance, a skilled and experienced BIM technician working in London/South East can earn in the region of £40,000-£50,000 per annum2. Even taking the lower figure, the employer’s costs on this will already be an additional £4,000+ per year. Benefits such as private medical insurance, annual bonus, and company pension schemes all add to the equation. For those SMEs who in the past may not have had their own pension scheme, the recent introduction of auto-enrolment must also be taken into account (both the statutory 3% contribution and the administration fees).
Other expenses which may be incurred include upgrading IT equipment and program licences. With the increasing trend in working from home, there is a further need to consider appropriate software/hardware to ensure employees are set up to be as efficient when working remotely as they are in the office.
However, when it comes to recruiting staff, the hidden costs are even more surprising. Research suggests that taking on a new employee can cost around £30,0003. This consists of advertising and agency fees, any additional training requirements, and time spent by other employees in reviewing and interviewing candidates. But a much more significant factor is the loss of productivity before the new employee is ‘up to speed’. According to hrreview.co.uk this can take around 24-28 weeks – which means that a new member of staff starting work in January may not be working to their full potential until the summer!
The current skills shortage within the digital construction sector seems likely to continue despite many schemes designed to attract talented graduates into the industry. For the time being, demand still far outweighs supply. In order to comply with government regulations and new initiatives, more and more businesses will need to recruit skilled staff in order to fast-track their digital capabilities. Together with the need to retain their experienced employees – with enhanced benefit packages and flexible working opportunities – staff overheads are only set to increase. In order to remain profitable, companies must carefully consider the way they use their resources, and if necessary, look at alternative ways to increase both their skills-base and their productivity.
One option growing in popularity is the outsourcing of highly-specialised work. Smarter, leaner and more progressive firms are realising the benefits of working with outside specialists on certain projects, drawing on their technical expertise as and when necessary. By leveraging in-house skills and talent in this way, businesses can greatly enhance the services on offer to clients – and keep overheads to a minimum.
Global sourcing is already established practice in other countries and is now gaining momentum in the UK. For companies wishing to explore this way of working, the first step is to engage professional support. Working in partnership with experts in this field provides not just confidence in the skill of the technicians and but also the reassurance that all work carried out will be subject to strict QA procedures.
With a proven background in sourcing CAD and BIM expertise, Digital Inc. are helping companies take advantage of this way of working, providing the support and advice needed to think globally and meet the demands of digital construction.