Business Operations
The Real Cost of Hiring: Looking Beyond Base Salary
Salary is only one line of the hiring budget. Here's how to build a more realistic employer-cost estimate and compare staffing models fairly.
OneTeam Editorial Team
A salary offer answers an important question: what will the employee earn? It doesn't answer a different one: what will the position cost the business?
Hiring decisions often involve more than base compensation. Depending on the employer and the arrangement, the budget may include payroll taxes, benefits, recruiting expenses, equipment, software, training, and management time. Comparing only a salary figure with a staffing service fee can misrepresent the true economics of either option.
A better approach is to compare total costs for a clearly defined scope of work, while documenting what's included and what's excluded.
Start with a reliable compensation benchmark
The U.S. Bureau of Labor Statistics (BLS) publishes occupational wage estimates, including median pay. As an example, its General Office Clerks profile reports a median hourly wage of $21.64 in May 2025. The Customer Service Representatives profile reports $21.53 for the same period.
Those are occupational wages—not fully loaded employer costs, and not necessarily what a particular business should expect to pay in its city, industry, or labor market. Role requirements, seniority, scheduling, and location affect actual compensation.
Use occupational data as a baseline, then adjust for the exact job you're hiring for.
What belongs in a fully loaded employer-cost model?
Employer taxes and statutory costs
U.S. employers typically have obligations involving Social Security and Medicare contributions, unemployment insurance, and other applicable taxes. The IRS overview of employment taxes explains core federal responsibilities. State and local requirements can add complexity.
Benefits and paid time away
Health coverage, retirement contributions, paid leave, and other benefits vary by employer and position. BLS's Employer Costs for Employee Compensation measures wages and benefits as separate components. In June 2026, average private-industry compensation costs across occupations were $46.89 per hour worked, including $32.82 in wages and salaries and $14.07 in benefits. That economy-wide average is not the fully loaded rate for an individual administrative role.
Recruiting and onboarding
Job postings, recruiter or agency fees, candidate interviews, background checks, reference checks, and manager time can create one-time hiring costs. Onboarding may also require software setup, training materials, access controls, and supervision.
Equipment, workspace, and software
A role might require a laptop, additional software seats, security systems, a phone setup, and possibly a physical workspace. Some of these are one-time costs; others recur monthly. Remote U.S. employees may not require office space, so avoid treating that expense as universal.
Management and turnover
Managers spend time reviewing work, providing feedback, and correcting errors. Vacancies and replacement hiring can create additional expense, although the amount is highly situation-dependent. Be cautious about adding a generic turnover percentage without evidence for your own organization.
A simple framework for building your budget
Instead of starting with a headline “cost per employee” multiplier, build your estimate line by line:
| Category | Frequency | What to document |
|---|---|---|
| Base compensation | Recurring | Salary or expected wages |
| Employer taxes | Recurring | Applicable employer contributions |
| Benefits | Recurring | Employer-paid coverage, retirement, leave, other benefits |
| Recruiting | Primarily one-time | Posting fees, recruiter fees, screening, interview time |
| Onboarding | Primarily one-time | Training and setup |
| Technology | One-time and recurring | Devices, software, security |
| Facilities | If applicable | Workspace and related expenses |
Calculate annual recurring costs separately from one-time setup costs. If you want a year-one comparison, add them together and label the result accordingly. If you want an ongoing monthly comparison, don't repeatedly count one-time recruiting fees as though they occur every month.
Illustration: equal staffing capacity, different cost models
Suppose a business needs approximately 2,080 scheduled work hours per year for a full-time role. An illustrative U.S. fully loaded budget of $30 per scheduled hour corresponds to $62,400 annually, or $5,200 monthly. The $30 rate is a planning assumption, not a BLS-published fully loaded rate for every position.
OneTeam's illustrative basic professional service fee is $2,500 per month, or $30,000 annually. Under those specific assumptions, the difference is $2,700 per month, or approximately 51.9% of the U.S. comparison cost. This example is not a guaranteed quote or a prediction of any particular business's savings.
This calculation excludes any separately billed costs, differences in working arrangements, hiring requirements, and other factors not included in the modeled service fee. It also compares scheduled capacity, not guaranteed billable or productive hours.
A higher U.S. cost assumption can produce a higher percentage difference; a lower one can produce a smaller difference. The inputs matter more than the headline percentage.
Questions to ask before comparing providers
What exactly is included in the monthly service fee? Ask about sourcing, administration, equipment, software, holidays, and support. Do not assume every vendor includes the same services.
Who manages daily work? Some arrangements provide recruitment and administrative coordination, while the customer retains day-to-day direction and training responsibilities.
What is the real scope of the position? A skilled specialist is not interchangeable with an entry-level administrative generalist. Make sure you're comparing the same responsibilities and seniority.
What happens when needs change? Review the proposed engagement terms, any notice periods, and how changes in schedule or scope are handled.
Which costs remain with your business? Depending on the arrangement, software, equipment, supervision, legal requirements, and other expenses may still apply.
Make cost transparency part of the hiring decision
A well-built comparison doesn't have to prove that one approach wins every time. Traditional local hiring may be the right choice for on-site, licensed, or highly location-dependent work. Dedicated remote staffing may be attractive when a role can be performed securely and effectively from another location.
Start by defining the job, required hours, expected outcomes, and full cost of each option. Then compare equivalent scopes with assumptions you can explain.
You can explore one illustrative scenario using OneTeam's Savings Calculator, or review our pricing overview. Actual engagement terms and costs should be confirmed in a personalized quote.
