Understand The Real Cost Of Employing People

Let me preface this post by saying that you should be comfortable negotiating a salary that is appropriate for the experience and special skills you bring to an employer. You should never settle for an outrageously low salary that you A) couldn't live on or B) is far below the prevailing rate for that line of work in that locality.

However, many applicants are missing out on otherwise good job choices because they are unrealistic about how much they think they should be paid. Secondly, applicants fail to realize the costs an employer takes on in addition to the salary they are paying. When an employer decides to hire someone she must also weigh in the additional costs that come with that.

In fact it is not uncommon for the total cost of employing a person to be 40% more than their base salary. That means someone paid a salary of $30,000.00 per year could actually be costing the employer $42,000.00 every year. These costs are not typically seen by the employee, but the employer will have to pay them nonetheless.

Costs you may not see.
Examples of additional costs to an employer can include a variety of payroll related taxes, paying someone to train you, paying for the physical space you will need, travel reimbursement, retirement savings match, parking, uniforms, specialty tools and equipment, health care, and a variety of mandatory insurances.

Extra costs still sting more than before.

We are still not quite over what happened in 2008. All of these expenses may be more burdensome now then they were 5 years ago. This plays into the amount an employer can pay for a given position. That is a legitimate reason why job seekers are finding the same type of work they used to have but a less pay.

When considering the salary being offered to you remember to consider all the other expenses to the employer that comes with that pay rate. This doesn't mean giving an employer a pass just because they are cheap or trying to low ball you during a salary negotiation. Rather, it is a reminder to keep things in perspective given the realities employers face when hiring people. MB

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