Earlier today, I posted in a forum on the topic of employees using their own money to purchase equipment that they could then use at work.
An example was a second monitor, which has documented productivity improvements.
My contribution was to observe two things:
- Pre-Tax vs. Post-Tax: A company purchases equipment at a discount relative to the employee, since the company deducts the cost before taxes.
- It’s a tiny expense: As an example, I calculated that spending $600 on a dual-monitor setup for an office employee earning the average income for “Professional and Business Services” would be beneficial if the employee saved less than 2 minutes per day (over a 3 year time period).
It’s a pretty simply calculation:
- The average hourly wage is $25.13. But that’s not the cost to the employer of having an employee there – benefits accounts for 27.8% of total compensation. The cost per hour is actually $34.83.
- Dual monitors are unlikely to last only one year. Let’s assume a 3-year replacement period.
- The breakeven point is the employee saving 5:45 each year.
- If we assume 250 working days per year (50 weeks), that’s 00:01:22 (one minute 22 seconds) per day.
Of course, you could argue that (i) increases in employee productivity don’t map directly to profit, and (ii) that’s very difficult to measure.
But it’s interesting to note how fast some businesses are to waste time, and how slow to authorize relatively minor expenses (e.g. $600) to improve employee productivity.
That’s a failure of accounting, in my mind.
I’ve included a very basic spreadsheet below.
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