If you are looking for job, you are really looking for someone to adopt you. This might be a new concept for many people who are not familiar with the dynamics of a business entity. This might as well be the main reason for many people to be unemployed. 

I use the term adoption because many people are already familiar with costs, complexities and long-term responsibilities of adopting a pet or a child. So let’s see what it takes to hire someone and give him a job.

  • To start, you need to have an idea of how to make someone useful. Most people don’t know how to do that and if they knew, they would never look for a job. You need to have plans, job descriptions and a list of tasks to be assigned to your employee. Your ideas and job description should be good enough so that your employee can produce at least $200 for every $100 you pay him. The remaining $100 is for expenses such as rent, utilities, maintenance, advertisement and hopefully at the end a few dollars will remain for you that you call it profit and pay a part of that to government as taxes.
  • You need to have a commitment to pay to your employee. If your ideas are not working and your employee is not productive, you will still have to pay him. The financial commitment of employers is the main reason most people look for job. They want someone else to take the risk and they get paid regardless of the business productivity.
  • As soon as you hire someone, you will be a free slave (unpaid tax collector) for your government. You will be responsible to calculate and collect varieties of taxes from your employee and pay them to your government. You will not get paid for this job as a tax collector; however, you must maintain your tax collection and tax payment records for many years in case you are being audited by your government.
  • Wages or salaries are not all you pay. As an employer you must also pay 7.5% social security tax and pay workers compensation insurance for your employees. You will have to provide them with workstation, bathroom, drinking water, safety equipment and many more depending on your industry. You will usually see that an employee who is getting paid $100 per day is actually costing you $150 per day or more.
  • How about the hidden cost of having employees? Employees don’t come to work alone. They also bring their personal problems, family problems, sense of entitlement and all their beliefs and political views. Often these problems result loss of productivity and moral in the entire company.

You may be wondering why you need to know all these. To start, it will help you have a better understanding of how things work. As an employee you will have a better appreciation for the the job opportunities you have or you will have. As an employer, you will have a more realistic view to the cost and responsibilities of having an employee.

Author: Mohammad Hamzeh, Business consultant
Date: December 26, 2020