There are two elements to the cost of having a FTE:
Direct costs
These are directly employee related (e.g.: salary / wages, non-monetary benefits, stationery, training etc.). These costs go up or down according to the number of employees
Indirect costs
This refers to the apportioning of the overall business costs such as premises, IT, management time and HR. These costs will not necessarily increase or decrease significantly as the number of employees change. Some may be seen as “step costs” (eg: premises – you maybe able to fit in 1 more person, but not 10, so at some point you will need more accommodation).
Direct costs
These are directly employee related (e.g.: salary / wages, non-monetary benefits, stationery, training etc.). These costs go up or down according to the number of employees
Indirect costs
This refers to the apportioning of the overall business costs such as premises, IT, management time and HR. These costs will not necessarily increase or decrease significantly as the number of employees change. Some may be seen as “step costs” (eg: premises – you maybe able to fit in 1 more person, but not 10, so at some point you will need more accommodation).
