FINAL WORD
Hiring topnotch IT specialists for your enterprise
In a tough economy , hiring independent contractors allows for quick scaling of resources without restrictions of retrenchments or notice periods and this flexibility is invaluable , especially during high growth phases with fluctuating workloads explains Johann van Niekerk at Outsized .
Hiring talent is a crucial decision , and the question of hiring a permanent employee or engaging an independent professional deserves serious consideration . Below , we break down the cost and other implications of hiring permanent employees compared to independent contractors .
Let us take a look at the true cost of hiring a permanent employee . While the advertised salary of , for example , R50 000 per month , or R600 000 annually , may seem straightforward , this is not the whole picture .
Many companies offer performance-based bonuses , often around 10 % of the annual salary , which needs to be added to the cost .
Finding the perfect fit usually includes recruiters and their fees – on average between 15 – 25 % of the annual salary . This is typically spread over an agreed period , on average 12 months for new hires , adding an additional R45 000 – R60 000 to the annual cost . This takes our annual salary to + -R650 000 .
To obtain a true monthly cost , we must also consider paid leave and sick leave . Permanent employees are entitled to 20 – 22 days of leave per year , about a month , and then additional leave for sick days or family emergencies , add a week . Now deduct 1.25 months from the year and divide R650 000 by 10.75 months .
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