The aim of this exercise is not to put you off recruiting either permanent or interim and contract resources but to give you a true representation of the costs associated. Some of the costs are accurate estimates, others are drawn from experience and national average statistics. The example is based upon a £40,000 base-salaried position.

This figure of £72,460 equates to the staggering true cost of an additional 81%% of the base salary. The true figure of the permanent hire is approximately 181% of the base salary. Even this amount ignores management time and costs associated with permanent hires, additional HR and accounting costs, car costs and allowances, leasing costs for capital equipment and any further sundry costs. It ignores also any redundancy costs, pay in lieu of service and down-time on a project due to lack of qualified resource.

If we now convert this cost to the relevant hourly rate of a similarly skilled interim and contract resource, we see that the difference is not as vast as we may have initially envisaged. The cost per hour equates to approximately £37.02 (calculated by dividing £72,460 by 261 (the working days in a year) and then by 7.5 (the working hours per day).

So there you have it, contract and interim resource may not prove to be the most expensive recruitment solution available to you and your organisation. It may, with foresight and planning, be one of the more cost-effective mechanisms available.