Employees are the biggest expense of about any business. Won’t line it all out, but having worked in a payroll firm, the business’ actual cost is nearly double your hourly wage, especially for lower skilled/paid employees. You make $15, they’re paying $25. (worker’s comp, unemployment insurance, taxes, payroll overhead, on and on)
If you hire to meet demanding times, what do you do with those people when business slows? Yes, the monster companies have no issue laying off thousands, but very few of us actually work for such outfits. Small business is loathe to have to layoff. During COVID our CEO was more than a little emotional when he pulled us all into Zoom to explain. Predictably, HR was totally cold blooded.
Speaking of, from a purely cold-blooded perspective, layoffs can (almost always?) crank up state unemployment insurance rates. In any case, here in Florida they have to pay $7,200 out during an employee’s first year. (7-yo info, probably higher now.)
Worker’s comp insurance companies don’t like to see turnover, bad sign you’re a safety minded employer when you constantly have new people. And whoever is handling your payroll is going to factor turnover into your rates.
And I haven’t even touched on the loss of tribal knowledge, moral and future turnover when you enact layoffs. Training and any required certifications are another factor. Hell, even Lowe’s put me through 2 weeks of computer classes before I hit the floor to sling mulch.
Yes, many dipshit companies hire and fire with no regard to what all I just said. They don’t often do well, especially in the long run. Our local Lowe’s vs. Home Depot is a great example. The Lowe’s is well run, employees are fairly happy, many have been there for years and years, managers from the top down worked their way up. They do loads of business. Local Home Depot employees seem miserable and as if they’re brand new. Their parking lot is empty compared to Lowe’s.
tl;dr: Don’t hire more than you absolutely have to. Initial costs are high and there’s no good path to layoff or fire people.
(This is an American perspective. European companies operate under even higher costs and tighter restrictions.)
All these expenses need to be kept in context. Sure, they’re on net paying $25 for your $15 of wage, but in turn they’re earning $40, $50, $100, or $200 off of your labor depending on just what kind of industry you’re in.
You see, a sane person would read all of that and question why a company would gleefully erase hundreds of jobs after years and years of productive employment.
You? You seem to want to defend the cutting of the “expense”, regardless of how much initial investment went in.
After all, you want to be, “Devil’s advocate”, do you not?
Devil’s advocacy here:
Employees are the biggest expense of about any business. Won’t line it all out, but having worked in a payroll firm, the business’ actual cost is nearly double your hourly wage, especially for lower skilled/paid employees. You make $15, they’re paying $25. (worker’s comp, unemployment insurance, taxes, payroll overhead, on and on)
If you hire to meet demanding times, what do you do with those people when business slows? Yes, the monster companies have no issue laying off thousands, but very few of us actually work for such outfits. Small business is loathe to have to layoff. During COVID our CEO was more than a little emotional when he pulled us all into Zoom to explain. Predictably, HR was totally cold blooded.
Speaking of, from a purely cold-blooded perspective, layoffs can (almost always?) crank up state unemployment insurance rates. In any case, here in Florida they have to pay $7,200 out during an employee’s first year. (7-yo info, probably higher now.)
Worker’s comp insurance companies don’t like to see turnover, bad sign you’re a safety minded employer when you constantly have new people. And whoever is handling your payroll is going to factor turnover into your rates.
And I haven’t even touched on the loss of tribal knowledge, moral and future turnover when you enact layoffs. Training and any required certifications are another factor. Hell, even Lowe’s put me through 2 weeks of computer classes before I hit the floor to sling mulch.
Yes, many dipshit companies hire and fire with no regard to what all I just said. They don’t often do well, especially in the long run. Our local Lowe’s vs. Home Depot is a great example. The Lowe’s is well run, employees are fairly happy, many have been there for years and years, managers from the top down worked their way up. They do loads of business. Local Home Depot employees seem miserable and as if they’re brand new. Their parking lot is empty compared to Lowe’s.
tl;dr: Don’t hire more than you absolutely have to. Initial costs are high and there’s no good path to layoff or fire people.
(This is an American perspective. European companies operate under even higher costs and tighter restrictions.)
All these expenses need to be kept in context. Sure, they’re on net paying $25 for your $15 of wage, but in turn they’re earning $40, $50, $100, or $200 off of your labor depending on just what kind of industry you’re in.
You see, a sane person would read all of that and question why a company would gleefully erase hundreds of jobs after years and years of productive employment.
You? You seem to want to defend the cutting of the “expense”, regardless of how much initial investment went in.
After all, you want to be, “Devil’s advocate”, do you not?
The devil doesn’t need more advocates.
Perhaps we should be afraid of learning new things and be happy in our echo chambers? How very conservative of you!
Sure thing, buddy.