On Nov 23, 2004, at 8:57 AM, Olin Lathrop wrote:

> A good rule of thumb is that the total compensation cost and directly
> related expenses for an employee is 15% above what is actually
> paid to the employee.

Really?  FICA by itself is 6+ percent, and there's the employer side
contributions to medicare, disability, medical, dental, and life
insurance.  That'd get up to about 15% of low-end employees pretty 
quick,
wouldn't it?  Then there's vacation/sick leave (5 weeks out of 52 is 
almost
10 percent by itself), retirement benefits (if any), and overhead costs 
(HR,
payroll,  etc)

I thought we used 50% as a guideline.  Or maybe it was $50k/employee?  
It's
been a while since I was a manager, and even then I didn't have to pay 
attention
too much to this sort of thing.  And of course we like to aim for 
something
like $600k of income (for the company) for each employee...


> This does not count use of electricity, floor space, equipment 
> required,
> etc, but that doesn't need to be anywhere near that high.
>
When was the last time you priced silicon valley floor space?  And 
maintenance
(including the gardeners, of course, since landscaping is required...)

Yeah, you can operate at lower overhead, but I don't think it's 
"normal" for
a company of any size to "only" spend 15% over a salary.  This of 
course is
one reason why "consultants" are so popular...

BillW


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