Staff Cost

Do you know how to calculate a cost per employee?

Today, in the employment market people aim have high pay salary to maintain the life style. During the good economic environment time, people requirement easy to fulfil. If economic going on adverse, these basic requirement would brings bad effect. Finally, the unemployment cases increased and a lot of news about retrenchment.

Why every corporation takes retrenchment staff is the main agenda in the restructuring plan? Because,

“If a staff receive pay is 1,000 per month and bank interest rate is at 3%p.a. Its assume that the staff opportunity cost is about 330,000 per month.”

Base on the above, if company employed 30 employee at averaging salary per month of 1,000 per person, it was indirectly required about placement of Fixed deposit of 9,9 million to earn the interest income to support the 30 employees' monthly salary.

Of course, during at good economic period of time. The 9.9 million capital could help corporate earn a lot of money from business activities. But in the recession time, no business and just paying staff cost is burden. Hence, Company always considers the staff cost is main agenda to approach it in their restructuring plan.