Meet John and Sally

Let's just put all of our cards on the table: Here is a real life example of cold-hard facts for an in-house HR department vs. HR consultant.

We can start by saying this figure is based on a company with an average of 75 employees at any given time. With that being said, the national trend of average monthly hours for a company this size consist of 40 hours per month of HR manpower.

Meet John. John is an HR Director for Company XYZ. His current salary is $95,000 per year. Let's see what the total cost for John's employer is to keep him as an employee.

$95,000 John's Base Salary

$15,000 John's Insurance (company paid portion)

$ 4,500 John's 401k (company contribution)

$ 8,000 Payroll Taxes (company paid portion)

$122,500 John's Salary / Year (not including in-direct costs)

Meet Sally. Sally is an HR Consultant and is self-employed. Her current hourly rate is $85.00 per hour. Let's see what the total cost for utilizing Sally's services would cost for Company XYZ.

Sally charges a monthly retainer of $3,500. This retainer includes 40 hours of her time per month devoted to Company XYZ. (Average hours per month for a company size of 75 employees.)

Total Cost Per Year for Sally's Services: $42,000.

Which route would you prefer?

Reference:

toptal.com

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