How much do full-time staff really cost?

Jake Phillpot

14 January 2015    |   

Being in the business of managing staff costs, we often hear people say that casual staff just cost so much more than their full time equivalents. I mean, that extra 25% is a killer, right? Especially for staff who work a fairly consistent schedule each week, it’s almost like free money. For a while there I went along with that, not really giving it much thought. But today the thought struck me – casuals miss out on plenty of benefits afforded to full and part timers, so are they really better off? I decided to investigate further. What follows may surprise you. First – how many days in a year does a full time employee work? Weeks in a Year: 52 Working Days in a Year: 260 So far so good. We’re going to ignore the 1 or 2 days that we’re off by, for the sake of a nice round number. Next, let’s look at this full time employee’s entitlements, in days. Annual Leave: 20 (4 weeks) Personal Leave: 10 (2 weeks) Public Holidays: 10 We’ll assume a 7.6 hour work day and 17.5% leave loading. So how many hours of leave are we paying? Annual Leave – Base: 152 Annual Leave – Loading: 26.6 Personal Leave: 76 Public Holidays: 76 Total Hours of Leave Paid: 330.6 Earlier we calculated how many days of work one can work in a year, now let’s subtract leave taken to get a more accurate figure. Days of Leave Taken: 40 Actual Days Worked in a Year: 220 Actual Hours Worked in a Year: 1672 Divide 330.6 (hours of leave paid) by 1672 (hours worked) and we get 19.77%. Remember, we are comparing this to the 25% loading paid for casual staff. So from this perspective, yes, your full time and part time staff are still cheaper – but only by 5.23%. And even that number is probably on the low side. We ignored long service leave and maternity leave because they are a bit more unreliable. Both they are also costs (or accruals) that can definitely add up! When you take into account the fact that you only have to pay casuals when you need them, it’s easy to see why more and more Australian employers are turning to casual staff. According to the ABS, this has been growing steadily since the 90’s, and today over 1 in 5 jobs in Australia are casual.

Being in the business of managing staff costs, we often hear people say that casual staff just cost so much more than their full time equivalents. I mean, that extra 25% is a killer, right? Especially for staff who work a fairly consistent schedule each week, it’s almost like free money.

For a while there I went along with that, not really giving it much thought. But today the thought struck me – casuals miss out on plenty of benefits afforded to full and part timers, so are they really better off? I decided to investigate further. What follows may surprise you.

First – how many days in a year does a full time employee work?

  • Weeks in a Year: 52
  • Working Days in a Year: 260

So far so good. We’re going to ignore the 1 or 2 days that we’re off by, for the sake of a nice round number. Next, let’s look at this full time employee’s entitlements, in days.

  • Annual Leave: 20 (4 weeks)
  • Personal Leave: 10 (2 weeks)
  • Public Holidays: 10

We’ll assume a 7.6 hour work day and 17.5% leave loading. So how many hours of leave are we paying?

  • Annual Leave – Base: 152
  • Annual Leave – Loading: 26.6
  • Personal Leave: 76
  • Public Holidays: 76
  • Total Hours of Leave Paid: 330.6

Earlier we calculated how many days of work one can work in a year, now let’s subtract leave taken to get a more accurate figure.

  • Days of Leave Taken: 40
  • Actual Days Worked in a Year: 220
  • Actual Hours Worked in a Year: 1672

Divide 330.6 (hours of leave paid) by 1672 (hours worked) and we get 19.77%. Remember, we are comparing this to the 25% loading paid for casual staff. So from this perspective, yes, your full time and part time staff are still cheaper – but only by 5.23%.

And even that number is probably on the low side. We ignored long service leave and maternity leave because they are a bit more unreliable. Both they are also costs (or accruals) that can definitely add up!

When you take into account the fact that you only have to pay casuals when you need them, it’s easy to see why more and more Australian employers are turning to casual staff. According to the ABS, this has been growing steadily since the 90’s, and today over 1 in 5 jobs in Australia are casual.

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Why you need better rostering for the new financial year

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Why Pharmacies Love Tanda

Tanda spoke to Jarred, Co-Owner of Marraboor Pharmacy about his experience using Tanda. Marraboor Pharmacy is a locally owned and operated pharmacy located in Swan Hill. They have been providing great quality service and health advice to the community for over 50 years. Known for their friendly and knowledgeable staff, Marraboor Pharmacy provides a range of health services. Immunisations and blood pressure recordings as well as a number of over the counter and prescription medications are available. “As a business owner and pharmacist, being part of the local community is really important. What I love about my job is being able to help people through the service we provide.” Jarred discovered Tanda when he went searching for better solution to manage and roster his staff across his busy store. Having previously used online systems and spreadsheets to roster, and paper time sheets to record staff attendance, Jarred was looking for a solution that could solve his rostering issues and make payroll processing easier. “Running a pharmacy, means that labour is my second biggest expense after stock. I therefore needed a simple and fast way to create rosters for my team, and forecast my labour costs. It needed to be easily visible, and able to connect to my Xero account so my wife could do payroll. “Tanda’s made a huge difference in how I roster. It was so easy to use with the drag and drop feature, and I could quickly see that I had my whole team covered with the colour-coded roster. “The integration has been so easy with Xero, and has made a real difference for my wife. She used to come in on a Monday to do payroll, and would spend hours chasing up staff who’d forgotten to fill in time sheets. Now she can come in, check the time clock selfies and time sheets, and do payroll in no time.” In addition to faster rostering, Jarred is also enjoying the Award interpretation and leave management features built into Tanda. “Being able to forecast my labour costs, plan my time and workforce through Tanda has really made a difference. I can see all my labour costs easily in Tanda, so I now know when someone is going into overtime on a Saturday, and how much that will cost me. “There’s already plenty of paperwork involved in running a pharmacy, so I’m a big advocate of paperless systems. Being able to track and approve staff leave requests electronically through Tanda, has made it much easier not only for rostering and payroll, but for tracking our leave accruals and leave costs in general.” Tanda is giving Jarred more time to spend focusing on his business and his patients. “As a Pharmacist, health professional and business owner, the less time I spent on admin, and more time spent focusing on running the business and providing excellent customer service to my customers, the better. Tanda is helping me to get out of the back office and away from the paperwork, to spend more of my time on pharmacist related work, which is what’s important. “Any pharmacists or business owner for that matter, should be using a cloud-based system like Tanda. It’s a great product and the customer service is excellent. I’d highly recommend giving it a go.”   Marraboor Pharmacy is a locally owned pharmacy in Swan Hill, that has been providing exception customer service and health advice to the Swan Hill community for more than 50 years.

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About the author

Jake Phillpot

Director: Jake manages Tanda's end-to-end customer journey and market growth.

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