Understaffed organizations. Employee burnout. Stagnant HR budgets. Technology challenges. All are daily realities for businesses in 2025. That’s the word from the Society for Human Resource Management (SHRM) in its latest State of the Workplace report.
The numbers tell the story: 62% of HR departments operated beyond scoped capacity in 2024, while 57% reported being understaffed for the work they had to do. More broadly, 36% of surveyed workers reported increased workload due to short staffing, with 61% of these overburdened employees facing burnout.
There is a solution that can help ease the strain on organizations and employees: strategic outsourcing, particularly around IT. However, to know where and when it makes sense, you must understand precisely what your employees’ time is worth. Here’s how to make that calculation.
What Does an Employee Really Cost?
When calculating an employee’s true cost, it may be tempting to focus on salary and call it a day. The reality, of course, is more nuanced. Commonly used estimates reveal that the actual employer cost for an employee typically falls between 1.25 and 1.4 times their base salary. All in all, an employee’s cost includes:
- Base salary
- Benefits (health insurance, retirement plans, paid time off)
- Payroll taxes (Social Security, Medicare, unemployment)
- Insurance and workers’ compensation insurance
- Training and development
- Equipment and workspace costs
- Perks and stipends (education reimbursements, gym memberships, and more)
For example, an employee with a $60,000 base salary might cost your organization between $75,000 and $84,000 annually when accounting for all these factors.
But even these calculations don’t tell the whole story. Hidden costs can include:
- Recruitment and onboarding time
- Productivity ramp-up period
- Management overhead
- Administrative support
- Technology infrastructure and support
How to Calculate Employee Cost Per Hour
Understanding hourly costs is crucial for evaluating task allocation and outsourcing decisions. Here’s a straightforward method:
- Calculate an employee’s fully loaded annual cost (base salary × 1.25 to 1.4)
- Determine available working hours (typically 2,080 hours per year)
- Divide the annual cost by their available hours
Here’s an example calculation:
- Base salary: $60,000
- Loaded cost factor: 1.3
- Fully loaded annual cost: $78,000
- Hourly cost: $78,000 ÷ 2,080 = $37.50 per hour
This hourly figure becomes your baseline for evaluating how employees spend their time and whether certain tasks might be better handled through outsourcing.
Time vs Value—Not All Hours Are Equal
Here’s where things get interesting: not every hour of an employee’s time delivers equal value to your organization. Consider this scenario:
A senior financial analyst earning $100,000 annually ($63 per hour fully loaded) spends three hours weekly troubleshooting IT issues. That’s $9,828 worth of specialized talent annually devoted to non-core tasks—those that dedicated IT professionals could likely handle more efficiently.
The real cost isn’t just financial. It’s the opportunity cost of what that analyst could have accomplished in those hours. Could they have identified cost-saving opportunities? Developed more accurate financial forecasts? Created strategic financial plans?
When highly skilled employees spend time on support tasks outside their expertise, it creates a double penalty: paying premium rates for non-specialized work while missing out on the high-value contributions they were hired to deliver. Not to mention the hit to morale when employees feel underutilized, reducing productivity even further.
The Hidden Cost of Time Wasted at Work
Even more difficult to quantify, technology interruptions and inefficiencies create a cascade of hidden costs across organizations. Consider these common scenarios:
- Email issues delay client communication
- Slow network connections disrupt virtual meetings
- Poorly timed security updates force unexpected system restarts
- Shadow IT solutions (employees doing IT themselves) create security vulnerabilities that come back to bite the organization later
Each of these scenarios wastes immediate time and compounds inefficiencies throughout the organization. The impacts add up quickly.
Let’s do the math: If a team of 25 employees averaging $45 per hour loses just 5 hours per week to IT-related interruptions, that’s $292,500 in lost productivity annually. And remember, that figure doesn’t include the opportunity cost of stymied innovation, missed deadlines, or frustrated clients.
The Real Impact of Tech Support on Core Business Functions
Beyond the immediate productivity losses, inadequate tech support can seriously impact your organization’s ability to serve clients and maintain a competitive advantage. For example:
- Legal professionals missing court filing deadlines due to system crashes
- Financial advisors unable to execute time-sensitive trades
- Healthcare providers losing access to critical patient records
- Manufacturing operations pausing due to network issues
Technology disruptions can lead to compliance issues and potential penalties, especially in closely regulated industries such as healthcare and financial services.
The Hidden Benefits of Proactive IT Management
Along with the hidden costs of inadequate IT support, the benefits of proactive technology management often go unrecognized. Consider these advantages:
- Reduced downtime through preventive maintenance
- Faster problem resolution with dedicated support
- Enhanced security through fewer breach risks
- Improved employee satisfaction and retention
- More effective resource allocation for strategic initiatives
Outsourcing IT doesn’t just help non-IT employees. Supplemental IT services also empower in-house IT teams to dedicate their expertise to projects that move the needle. Instead of spending the bulk of their time on troubleshooting and updating systems, outsourcing lets teams implement new technologies, improve security protocols, and develop custom solutions that give the organization a competitive edge.
How to Maximize the Value of Your Team’s Time
The key to maximizing employee value lies in ensuring your staffers can focus on their core responsibilities.
Start with a comprehensive time audit
This isn’t just about tracking hours. It’s about understanding the true nature of how your employees spend their day. Use time-tracking tools or (less invasive) surveys to gather data, but also engage directly with your team. Ask them about their biggest time-wasters and the tasks that prevent them from doing their best work. Look for patterns that reveal systemic inefficiencies.
Identify high-value activities
What tasks directly contribute to revenue generation or cost savings? What activities build meaningful client relationships or develop critical intellectual property? The goal is to identify work that truly leverages your employees’ unique skills and creates lasting value for your organization.
Evaluate outsourcing opportunities
Look beyond simple cost comparisons to consider expertise, availability, and scalability factors. For specialized functions like IT support, consider whether internal staff are spending time on routine maintenance that dedicated experts could handle more efficiently (and affordably).
Consider technology investments
The right technology solutions can dramatically improve productivity, but only if properly implemented and supported. Consider both the direct costs of new tools and the indirect costs of training and adaptation. Most importantly, ensure that any new technology makes work easier rather than adding complexity. We can help with comprehensive IT consulting services.
The Bottom Line
SHRM’s latest statistics highlight an essential truth: organizations can’t afford to waste their employees’ time on tasks that could be handled more efficiently through strategic outsourcing.
The solution isn’t just about cutting costs. It’s about maximizing value. When you understand the true cost of your employees’ time, you can make informed decisions about where to invest in support services. And that frees your team to focus on what they do best, helping you build a more efficient, agile, and competitive organization with a more engaged and productive workforce.
Looking to optimize your organization’s IT support and free up valuable employee time? Learn how we can help with managed IT.
