Before I made the jump to insurance, I was a salary earner like most people.
Now as I am becoming more “entrepreneurial”, I have to consider the cost of hiring staff.
There is this CPF Calculator located here: https://www.talenox.com.sg/cpf-calculator
If you were to look back at your salary slip, you will see such numbers.
- CPF – Employee Contribution
- CPF – Employer Contribution
- SDL (Skill Development Levy)
- Nett Salary
So if I were to hire a new staff with a salary of $4000, the actual out-of-pocket cost to me as an employer is: $4000 + $680 + $10 = $4690.
For an employer, paying this amount is fine – provided the staff is able to provide multiple returns of more than $4690.
So while you might feel that your net take home pay of $3200 is “small” compared to the contributions you made, your boss is actually paying a whole lot more.
He or she takes other risks as well like taking on an office / shop lease, drawing up sales & marketing plans (that may or may not work), paying company tax as well as personal tax and ensuring that the business doesn’t fail.
It’s like having 4 balls juggling in the air – your boss has to ensure that none of the balls drop.
It is rather eye-opening once you are operating on the side of the employer / entrepreneur.
The business owner or entrepreneur usually simplifies the metric to keep an eye on – which tends to be total revenue.
And when it comes to hiring decisions, there is an important metric that some employers look at – Revenue per Employee.
In some of the biggest tech firms in the world, the average revenue per employee is easily more than $1 million dollars.
So if you really want to know the value you bring in as an employee, look at your current salary.
And if someone else is earning more, it is highly likely they bring in more value (and revenue) to the company.
This is why top salespeople are highly remunerated – what they do directly impacts a company’s revenue.
But I Don’t Do Sales! How To Increase My Value?
The good news is that you need not have to do sales.
But what you need to be is nimble, open to having new skillsets and realize that the unwritten rules are changing to ensure you remain relevant in the workplace.
Lawyers could one day be irrelevant – thanks to this JPMorgan software that does in seconds what lawyers will take 360,000 hours. – http://news.fintech.io/post/102e1a2/jpmorgan-software-does-in-seconds-what-took-lawyers-360-000-hours
Even taxi drivers may have to consider the possibility of driverless cars.
Never ever be too comfortable being where you are – because when the rug is pulled under you in the form of unemployment, it will become very jolting and painful.
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