Applied Consulting vs. Hiring a New Employee
How does hiring an Applied Engineering consultant compare to hiring a new employee, and which one provides the best value for your company?
This question was presented to Applied when a company asked for a proposal for engineering services. The company asked, “How do I justify the cost of hiring your services over hiring a new employee to do the same task?”
It is a common misconception that hiring a new employee would be less expensive due to the lower hourly wages compared to a consultant’s hourly fee, but there are other factors that should be considered when determining the true cost of hiring a new employee.
New Employee Costs
Applied identifies these inclusive costs as an employee’s “internal burden rate”. Because total labor costs, including the internal burden rate, may be as much as 50% higher than payroll costs alone, it is necessary to calculate the burden cost accurately. These costs include:
- Payroll taxes, 401k, benefits, social security tax, Medicare tax, workers compensation, general liability, unemployment insurance, bonuses, severance pay, uniforms or special work attire, usage of equipment, training, work supplies, office space, administration/IT time unloading, onboarding, CAD software, PTO, paid holidays, and sick leave.
Applied Engineering Consulting Costs
Through using Applied Engineering’s services, the above stated costs can be avoided. By hiring an Applied Engineering consultant, you benefit from:
- Straight rates (no PTO, holiday, or sick pay, no recruiting or onboarding costs) and a minimal time investment.
- You receive flexible resource management and a vetted Applied consultant that fits your needs.
- Applied Engineering can step in quickly with knowledgeable staff with the expertise needed by your company.
As you can see, hiring Applied Engineering can be a wonderful asset to your company for a much lower cost than hiring a new employee, and our consultants possess skills to help with a multitude of projects. If you want to learn more about any services that Applied has to offer, contact us today.