When costing out contract costs, it is easy to think of the big cost items—pay, vacation, sick, retirement, and insurance. While these items make up the majority of labor costs, there are other contract costs that shouldn’t be ignored. Here’s a list of some of the other common areas that companies may not stress enough in labor costing:
1. Number of days off in a week or month
2. Scheduled work hours that either include or exclude a paid meal period
3. Monthly, annual, and maximum sick leave banks
4. Credit time for shift work when an employee is idle
5. Overtime assignments and awards
6. Payment of overtime—daily, weekly, time and one-half and/or double time
7. Amount of time it takes to fill a vacancy or to be displaced from a shift and/or location
8. Time spent in either on-the-job or classroom training
9. Money spent on uniforms, safety shoes, PPE, or monthly cleaning allowances
10. Administration of the contract in terms of programming and complexity