The True Cost to Employ

The True Cost of Employment: How The Best Connection Can Help You Stay Ahead 

In today’s evolving business landscape, managing staffing costs efficiently is more important than ever. With upcoming changes to the National Living Wage (NLW) and increased National Insurance Contributions (NICs), businesses are facing significant increases in employment expenses. Beyond these direct costs, there are also hidden expenses that many employers overlook when hiring permanent staff.  

At The Best Connection, we specialise in helping businesses navigate these challenges by providing flexible staffing solutions that save time, reduce costs, and improve operational efficiency. In this blog, we’ll highlight some of the costs you might not have considered and discuss how partnering with us can help you develop a flexible staffing solution. 

Understanding the Rising Costs of Employment  

National Living Wage (NLW) Increases  

From April 2025, the National Living Wage in the UK will increase to £12.21 per hour, up from £11.44. This 6.7% rise means higher payroll expenses for businesses, making it crucial to evaluate cost-effective workforce solutions.  

Failing to comply with NLW regulations can result in severe penalties for employers, including backpay obligations, fines of up to £20,000 per worker, and potential legal consequences. 

Changes to National Insurance Contributions (NICs)   

Starting in April 2025, employers will experience two key changes to National Insurance Contributions (NICs):  

• The employer NIC rate will rise from 13.8% to 15%.  
• The earnings threshold for NICs will drop from £9,100 to £5,000 per year, meaning a larger portion of wages will now be subject to contributions.  

These changes will further increase employment costs, leading many businesses to reassess their staffing strategies. 

The Hidden Costs of Hiring Permanent Staff  

Beyond wages and NICs, there are many other expenses associated with hiring permanent employees, including:  

Direct Costs  

• Holiday Pay (Working Time Directive compliance)  
• Employers’ National Insurance Contributions (ENICs)  
• Pension Contributions  
• Apprenticeship Levy  
• Parental Leave Costs  
• Employee Benefits and Bonuses 

Indirect Costs  

• Recruitment & Advertising Costs – Posting job ads, screening candidates, and interviewing all take time and money.  
• Payroll & Administrative Overheads – Managing wages, tax compliance, and HR paperwork adds to operational burdens.  
• HR Costs – Staff training, onboarding, and handling disciplinary procedures require additional resources.  
• Employee Turnover Costs – The time and expense involved in replacing employees who leave, including offboarding and rehiring.  
• Sickness & Absenteeism – Permanent staff are more likely to take paid leave, adding extra costs for replacement workers. 

Given these rising costs, businesses should explore alternative staffing models to remain competitive. Temporary staffing offers a flexible, cost-effective solution that allows employers to scale their workforce according to demand while avoiding many of the hidden costs of permanent employment.  

How Temporary Staffing Can Save You Money  

Given these rising costs, businesses should explore alternative staffing models to remain competitive. Temporary staffing offers a flexible, cost-effective solution that allows employers to scale their workforce according to demand while avoiding many of the hidden costs of permanent employment.  

Key Benefits of Temporary Staffing with The Best Connection

• Cost Savings – Avoid long-term payroll commitments and only pay for staff when you need them.  
• Faster Hiring Process – Gain immediate access to a large pool of pre-vetted workers.  
• Reduced HR & Admin Burden – We handle payroll, pension contributions, holiday pay, and compliance.  
• Flexibility & Adaptability – Scale your workforce up or down based on business demand.  
• Lower Recruitment Costs – Save time and money on advertising and recruitment processes.  

Bespoke Cost Calculator: Making Informed Staffing Decisions    

To help businesses assess the real cost of employment, The Best Connection has developed a bespoke Cost Calculator. This tool provides a tailored breakdown of employment costs, comparing permanent and temporary staffing solutions based on factors such as:  

• Pay rates & shifts  
• Hours worked  
• Annual leave  
• Pension contributions  
• National Insurance costs  
• Bonuses & benefits  
• Sickness & parental leave  

Our recruitment experts can help assess your specific costs to ensure you can see the full picture. 

Did You Know?  

If your business experiences seasonal fluctuations, temporary staffing could be the most cost-effective solution. For example, companies that see reduced staffing needs for just 5 weeks per year or 2 days per month Can save money by utilising temporary workers instead of maintaining full-time staff year-round. 

Why Choose The Best Connection?  

Outsourcing recruitment to The Best Connection provides numerous advantages beyond just cost savings:  

For Employers

• Immediate access to a broad, local talent pool.  
• Workers with proven experience, good attitudes, and strong work ethics.  
• No advertising or recruitment costs – we handle it all.  
• Centralised payroll – we manage wages, holiday pay, and pensions.  
• Full compliance with employment regulations.  
• Reduced HR burden – no need for internal monitoring, exit interviews, or disciplinary procedures.  

For Temporary Workers

• Weekly pay cycles, providing financial stability.  
• Access to a variety of job sectors and roles.  
• Ongoing support from trained recruitment consultants.  
• Work-life balance flexibility with adaptable shifts.  
• Access to exclusive benefits and perks. 

Key Takeaways  

• The cost of employment extends far beyond wages and includes numerous hidden expenses.  
• With economic uncertainty and rising employment costs, temporary staffing provides a strategic way to control labour expenses.  
• Our bespoke Cost Calculator helps businesses compare and analyse staffing costs to make informed decisions.  
• Partnering with The Best Connection ensures flexibility, reduced administrative burden, and significant cost savings.  

So, if you’re looking for a smarter way to manage staffing costs, get in touch with The Best Connection today. Let us help you optimise your workforce while keeping costs under control. 

If you would like to speak to one of experts about how we can help you, please contact our Central Sales team on 0121 504 3090.  Alternatively, click here to find your local branch.