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Categories: business case
Have you ever sat in a meeting that has started late and wondered how much money it has cost the company to have all those subject matter experts sitting around doing nothing? If you haven’t, maybe you should. It would certainly encourage you to be more efficient in meetings!
Whether you do timesheets or not, or cross-charge your client or not, your time on a project has a financial cost. Let’s look at what that is made up of.
Direct costs
Recruitment costs related to hiring you in the first place: placing an ad, holding interviews, preparing materials
Direct costs are the tangible ones that related to your pay and benefits. They include:
- Salary and ‘on’ costs such as national insurance and employers’ taxes
- Benefits like pension contributions, healthcare, car allowance, childcare schemes, discounted gym memberships and so on
- Cash benefits like a bonus
- Your phone bill (assuming the device is funded by your employer and they don’t operate a Bring Your Own Device scheme).
All pretty clear so far.
Indirect costs
These are costs of turning up to work and are incurred by all employees. They are quite hard to work out and you might find some financial whizz in the business has done it but normally you wouldn’t know about these.
- The cost of heating and lighting your workspace in the office
- Tea, coffee, sugar, mugs (including breakages), spoons, the dishwasher, washing up liquid etc
- Stationery like pens, printer paper, staples
- Software licences for the applications you use
- Hardware costs for your laptop, phone or tablet including keyboard, mouse, monitor, docking station, laptop bag, headset etc
- Insurance both for you as an individual for example when you are travelling on company business and also for any expensive kit that you have.
Still with me?
Hidden costs
Then there are other costs that don’t appear on any balance sheet. These are the hidden costs of being an employee.
- The cost of not being as productive or effective as you could or should (consciously like taking extra long tea breaks unconsciously or through other factors)
- The cost of not tackling poor performance in your project team, such as failing to deal with conflicts that lead to low morale and lower performance
- The cost of not being innovative. Who has time to factor in ‘innovation afternoons’ on a project? Lack of innovation (or the time to be innovative) can cost businesses a lot in terms of being first to market with a product or just generally working smarter
- The cost of bureaucracy. Layers of bureaucracy on your project slow things down or add expensive admin loops.
How do you prove your worth?
OK, we can’t put a financial figure on the total of all of these but you can see that on any given day it could run to a substantial amount. On days where you work really hard and effectively from your home office (and therefore pay for your own heating, lighting and tea) and sort out a lingering personnel problem on the project team you would cost your company less than a day where all your meetings started late so there was a lot of sitting around in the office.
Regardless of the figure – and it really doesn’t matter what it is – the point is that your time on a project is worth something. How do you prove this to your manager?
No one is going to ask you at the end of the year whether you have contributed adequately to cover your ‘worth’. Your employment is not a profit and loss account. But it is a good idea to have some ideas prepared to make it clear to them that you are a valuable employee. That could be anything from taking part in external conferences to raise the company’s profile locally to gaining a credential to increase your confidence to delivering a project that generates millions of dollars of revenue.
I can’t tell you what the answer is but I do know that subconsciously employers do think about these things and do know who is a valuable employee and who is less of an asset to the team. They might not use pure financial terms to quantify your contribution, but they will be aware of what contribution you make and how that compares to others in the department.
Can you justify your contribution if asked?
I’d be interested to hear if you have ever worked out the cost of a slow-to-start meeting or if you have calculated your contribution in financial terms. Why not let us know what happened in the comments?
Posted on: August 26, 2014 11:41 AM |
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