Hiring your first employee can be an exciting and terrifying decision for a small business. I remember when I was contemplating making the leap - the thought of being responsible for someone else's primary income was a wee bit scary. Up til then, in those tight months where clients were slow to pay or the work had dried up I only had myself to think of - and paying myself less (or nothing at all) was a risk I often took. But with an employee that's not an option! Oh, the pressure!
When you hire an employee it's not just the direct salary cost that you have to take into consideration. A great new tool launched on business.govt.nz today gives you a ballpark estimate of the first year's employment costs. The Employee Cost Calculator allows you to see the additional costs such as ACC and Kiwisaver as well as the discretionary costs like recruitment, training, overheads and employee benefits. It converts this into an upfront cost and an ongoing monthly cost that you can feed into your budget.
Having a realistic budget for upfront and ongoing costs, and a strong cashflow, can certainly make the decision to hire easier.
|Posted in: Recruitment|