Employees Cost Way More than Computers
A 2% productivity loss from even the lowest-paid employee in your company costs more than a new computer and keeping computers for five years results in over 6% productivity loss per employee!
It’s not just major computer crashes and viruses about which you should be concerned. It’s also the mounting costs of old, slow computers year over year. Let’s look at the numbers:
Cost of a New Computer
For a new, business-class PC including monitor, three-year warranty, battery backup, and an IT professional to set it up correctly for your business, you’ll probably spend around $1,650
Cost of a Salaried Employee
Hours Available – Based on a 40-hour workweek there are 2,080 hours available for employees to work in a year
Hours Worked per Year – Deducting company holidays, vacation, and sick leave, the average employee works about 1,800 hours per year
Average Employee Cost – With an average salary of $45,000 and overhead costs of 40%, a fully burdened employee cost per year = $63,000
Productivity Loss from Slow, Aged Computer
Years 1 & 2 – Your new computer is humming along, not slowing you down at all.
Year 3 – Starting to bog down from age, clutter, and newer software straining system resources. It’s slowing you down by at least five minutes a day.
Year 4 – Getting slower. You’re losing at least 10 minutes a day. On the upside, you’ve got more time to refill your coffee and catch up on Facebook.
Year 5 – It undoubtedly costs you more than 15 minutes a day. You’re tired of Facebook, on your fourth coffee refill, and ready to throw this stupid computer out the window!
Here’s what the 5-Year productivity loss looks like:
5-Year Productivity Loss per Employee
|Year||Hrs/yr.||Work Days/yr.||Productivity Loss|
5-Year Financial Loss per Computer
|Year||Labor Cost||Opportunity Cost*||Total Cost|
|5-YEAR TOTAL (per computer)||$3,938||$7,875||$11,813|
*Opportunity Cost is an important factor as it helps us understand the value of an employee’s time to the business if spent on valuable activities such as revenue generation, customer retention, closing sales, etc. For our example, we based it on a factor of 2x the Labor Cost.
“An ounce of prevention is worth a pound of cure.” – Benjamin Franklin
As you can see, even without factoring in the relative opportunity costs, the fully burdened cost of lost productivity over the five-year life of a computer is staggering! Applying the same concept to a slow network server, which affects everyone in the business, reveals an even more significant financial impact.
Many businesses aren’t considering this or implementing an IT Lifecycle Management plan. Instead, they’re hoping to squeeze another few years out of those old computers, waiting until it either breaks or they just can’t take it anymore before replacing it.
We can help you implement an IT Lifecycle Management plan to maintain your computers at peak performance, ensuring your business gets the most value from employees’ time and your IT investment. Give us a call at (423) 534-3418 or stop by our offices at 740 Volunteer Parkway Suite 2 Bristol, TN 37620. We would love to hear how we can help meet your business needs!