How benefits affect the bottom line

Benefit costs are skyrocketing, but they're becoming increasingly essential to retaining a loyal and productive workforce. In the first of a three-part series, REMODELING looks at how benefits affect the bottom line.

9 MIN READ

Survey Says … Consider this example. A recent REMODELING survey put an average foreman’s or lead carpenter’s hourly wage at $25.50. At that rate, spending the nationwide average of 29% of a wage on benefits, the lead costs the remodeler $32.90 per hour.

Based on a 2,000-hour year, the total yearly cost of the lead comes to $65,800.

Now measure that against a potential expense of one and a half to three times base salary for replacing the lead if he quits. (The original annual base salary is $51,000.)

1.5 x $51,000 = $76,500

2 x $51,000 = $102,000

3 x $51,000 = $153,000

The annualized net savings is anywhere from $26,400 to $102,000. Even if you’re paying for a premium benefits package at 45% of the yearly wage, you only spend $74,000 on the lead annually, which means there’s still a net savings, even at the lowest replacement cost.

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