When it comes to hiring and retaining employees in Hawaii, employers sometimes forget about the true costs of employment. It’s easy to overlook the fact that the total compensation package plus taxes and other expenses add up to much more than just employee wages or salary.
Employers also have the added expenses of insurance programs, payroll processing costs, and benefits, just to name a few. Add in mandated state and federal taxes, and this is the true cost of having an employee.
How much does an employee actually cost?
The significant difference between wages or salary and the true cost of employment matters for business owners in Hawaii. With Hawaii being a challenging place to do business, it’s important for employers to understand exactly how much an employee actually costs in order to control their costs.
According to a recent study from the MIT Sloan School of Management, employment costs fall into several broad categories:
• Basic salary
• Employment taxes
• Office space
• Equipment & software
• Employee benefits
One of the largest costs is associated with employee benefits. In fact, the U.S. Bureau of Labor Statistics estimates that each employee’s benefits alone will cost an employer 25-40% above each employee’s wages or salary.
The other costs outlined above can be considered either predictable fixed costs or variable taxes and insurance programs. Business insurance rates (TDI, EPLI, workers comp) are difficult to predict and may increase every year, which makes it increasingly costly to hire employees.
To help control these costs, ProService Hawaii is offering, for a limited time, a rate guarantee for Workers’ Compensation, Temporary Disability Insurance (TDI), and Employment Practices Liability Insurance (EPLI).
How is ProService able to offer this rate guarantee?
ProService Hawaii’s insurance, Headland Insurance Company, has consistently generated savings for customers with its Workers’ Compensation program since 2007. Due to its low cost structure and excellent claims management, the company is able to provide the best possible outcomes for injured employees.
Additionally, as the largest and most experienced Professional Employer Organization in the state, ProService Hawaii can guarantee the best EPLI rates on the market. Not only is this crucial for mitigating risk, but it will improve your business’ bottom line.
Employees are often the most expensive investment
Employers today have the ability to leverage best-in-class services to reduce the costs that come with bringing on new employees. By ensuring your rates won’t change, employers don’t have to think twice about hiring and retaining the talent they need to help their business grow.