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Interim vs Permanent Cost Comparison

An senior Interim resource can provide up to 32% savings versus a permanent equivalent when the total employment costs are taken into account. This can be important when aiming to achieve budget reductions, while still delivering organisational objectives.

 

 Employment Costs Permanent Cost Interim Cost 
 Salary £120,000 NA
 Pension (13.6%) £16,320 zero
 Employers NI (10.1%) £12,120 zero
 Holiday (35 days paid) £16,600 zero
 Public holidays (8) £3,794 zero
 Sick days (9.2 national average) £4,364 zero
 Up to 10 Training days, including external costs for 5 days                             £9,743 zero
 Equivalent daily rate £723 £750
 12 months, 5 days a week, assumes 35 days unpaid leave £182,941 £163,500
 12 months, 4 days a week, assumes 35 days unpaid leave NA £123,750

 

Notes - based upon 253 Working days in the year, 365 days less 104 Weekends; 8 Public
holidays.

Sources: Ten Top Facts about the Local Government Pension Scheme – Unite (19.1.2010);
Local Government Employers Sickness Absence Survey 2008/09; Direct.gov.uk

 

Key advantages of using Interim vs a Permanent recruit:

Permanent Director                                 Interim Director

  • Fixed employment costs                 >    Daily rate charged for days worked              
  • 3 month notice period                   >    7 day notice period
  • 10 weeks to recruit                       >    3 days to recruit
  • Member of Paid Service                 >    Classed as a supplier
  • 6 month induction period              >    Performance measured from day 1
  • Redundancy liability *                    >    No redundancy liability
  • * A 55 year old with 22 years service carries a £280,307 exit cost