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Hourly Employee Cost

Would like to know what the general consensus is in obtaining hourly employee cost. We have been given a suggestion, using a formula to obtain the employee cost and then enter the result into staff cost per employee.

Would like to know how other companies handle this.

Thanks.

Melinda McLeod Bush Communications, Inc.

We use an average of the midpoint of salary range for the job description. We take the annual salary times 1.10 for taxes, benefits,etc. and then divide by 2000 hours. We use an average so that employee costs are confidential.

Jennifer Whittier Schiedermayer & Associates, Inc.

I used a formula of hourly rate (based on weekly salary) + insurance (broken down by hourly rate) + 35% = company cost rate per hour worked. Let me know if you have any future questions. Good Luck!!

Felica Sparks Office Manager Benton Newton & Partners Advertising www.cre8ive.com

We have found a problem with entering the staff costs into C&P. Here's the details. If you find a way around this, please let me know.

1. The AE's review the job summary reports prior to issuing invoices. 2. Net PO's must be included so the AE's know how much additional costs to expect. 3. The access privilege that puts PO's on the job summary is the same access privilege that allows staff members to see costs. 4. Therefore.....all my AE's see staff costs. 5. Obviously, we've chosen to NOT input staff costs.

There are several other reports this happens on. C&P has placed this issue on a wish-list. I haven't heard when it might be addressed.

Hope this helps.

Laura Karns Hanon McKendry Advertising

We divide the employee's salary by 2,080 (40 hrs/week x 52 weeks). That gives us the employees cost per hour. We then expect an average gross profit margin of 65% on closed jobs.

(Previously, the cost was calculated taking 32 hours/week x 47 weeks . We then expected an average gross profit margin of 50%.)

Jonathan Gundlach

We did that same calculation for awhile. Confidentiality was my concern too. Then I realized the account team did not need to see "costs" so I changed their privileges.

They are responsible for staying on budget by hours for internal labor. External costs (contractors & buy-outs) are estimated and entered with a budget & mark-up, so they don't need to see the cost on reports (as long as they stick to budget!).

Works great for us and I have more confidence in my net margin.

Roxanne Cowan

Our method is this:

We take the total cost of the employee (which includes salary, bonuses, health insurance, social security match (7.65% in NYC), unemployment insurance, retirement contributions, Workman's Comp, etc.). We divide this cost by 2000 and multiply by 3 or 3.5. You cannot lose using this formula.

Joseph Notovitz Notovitz Communications

Thank you for input from everyone, it will be useful in determining how we achieving our goal. Really appreciate the responses!!

Melinda McLeod Bush Communications, Inc.

Have you looked at the job progress report? We switched from summaries to progress reports for review because of confidentiality issues.

Tell me what you think. Would love some feedback about using that report. So far, it's been great for us.

Roxanne Cowan

It sounds like you need a different report and different access privilege.

First, it sounds like you don't want your users to have cost access. The access privilege to "Show cost amounts, cost rates on XX's windows, and reports" should be unchecked. Then the access privilege "Don't show time on XX's job cost reports" should be checked. These are the best ways to ensure that costs are not seen on the job ticket.

Next, the Job Progress report shows the job totals at gross but looks like the Job Summary. Everyone really needs to see how close the job is getting to the estimate, those are your gross numbers anyway.

Thanks,

Rhonda Brazelton Clients & Profits R&D