Service - Performance Gap: Employee vs. Contract
How can contracting executive / management services be so cost effective? The simple answer is that the service is a business contract not an employment contract. This focuses on pay for results not time. It also eliminates the associated costs of benefits, hiring and termination.
Item Employee Contract Services
Salary $100,000 $99,000
Statutory Benefits $18,000 Nil
Company Benefits $14,000 Nil
Hiring Costs $36,000 Nil
Termination Liability $50,000+ Nil
Pension Liability subject to Plan Nil
Total Costs $168,000 $99,000
Total Annual Costs $132,000 $99,000
Total Liability $50,000+ Nil
Performance Valuation $46,200 $99,000
Return on Services 36% 100%
Service Gap -$85,800 0.00
Service Performance Advantage to You: $85,800/yr.
What is your Service - Performance Gap? This is the real waste you are paying for employment of services which are more effectively delivered by contract.