On this page
- 01Key takeaways
- 02How do you calculate the cost of an employee hour?
- 03What is the hour worth beyond its cost?
- 04How does this guide outsourcing decisions?
- 05When do value estimates mislead?
- 06What does this look like in practice?
- 07Hour value checklist
- 08Next step
- 09Sources and further reading
- 10Frequently asked questions
Key takeaways
An hour of your team's time is worth at least its full cost, salary plus employer National Insurance, pension and holiday, and often much more in what it could produce. For growth roles, the second number matters most: an hour spent on routine admin by a salesperson costs its wage plus the growth it displaced. Price both before deciding what to outsource.
- Full cost: salary plus employer costs, per worked hour.
- £19.81 per worked hour for a UK employee on £30,000.
- Value: what the hour could produce in growth work.
- Compare both with the market cost of routine support.
Want your team's hourly cost and value worked out? Message us on WhatsApp.
Chat on WhatsApp →How do you calculate the cost of an employee hour?
Add salary, employer National Insurance, employer pension contributions and any other employment costs, then divide by hours worked in a year after paid holiday. UK workers on a five-day week are entitled to 5.6 weeks of paid holiday, which reduces worked hours. A UK employee on £30,000 costs about £19.81 per worked hour on this basis.
What is the hour worth beyond its cost?
For growth roles, an hour's value is the revenue or margin it could produce. Estimate it from results: if an account manager's reviews typically produce £60,000 of extra annual revenue from 300 hours of review work, each review hour is worth about £200 in revenue.
- Cost: what you pay for the hour.
- Value: what the hour could produce if spent on growth work.
- Gap: value minus market cost of moving routine work out.
How does this guide outsourcing decisions?
Compare the market cost of routine support, indicatively £9 to £18 an hour for managed offshore support, with both the cost and the value of the person doing the work now. The bigger the gap between their value and the support cost, the stronger the case for moving the work.
When do value estimates mislead?
When they assume every freed hour becomes growth. Discount for the handover period, management time and hours that leak. A realistic estimate assumes 60% to 80% of freed hours reach growth work once things settle.
What does this look like in practice?
A pattern we see: an owner says outsourcing at £14 an hour is expensive because his coordinator costs £16. Valuing the coordinator's sales support hours, which win repeat orders, changes the picture; the routine part of her week is worth moving.
Hour value checklist
- Calculate full cost per worked hour.
- Estimate value for growth roles.
- Compare with market support costs.
- Discount for leakage and management time.
- Prioritise roles with the biggest gap.
Next step
Calculate full cost per worked hour for your five key people. It takes 20 minutes and changes most outsourcing conversations.
Message us on WhatsApp for the hour value calculator, or book a 30-minute consultation.
Chat on WhatsApp →Sources and further reading
- Employee earnings in the UK (Annual Survey of Hours and Earnings) · Office for National Statistics
- Rates and thresholds for employers 2026 to 2027 · HM Revenue & Customs
- Workplace pensions: what you, your employer and the government pay · GOV.UK
- Holiday entitlement · GOV.UK
Frequently asked questions
How much does an employee cost per hour in the UK?
It depends on salary. As a guide, an employee on £30,000 costs about £19.81 per worked hour once employer National Insurance, minimum pension and paid holiday are included. Add more for equipment, software, office space and management time if you want a fuller picture.
How do you value an employee's time?
Start with full cost per worked hour. For growth roles, also estimate what an hour of their growth work typically produces in revenue or margin. That second figure shows the true cost of their time going on routine admin. Revisit the answer each quarter, because team capacity and priorities change as the business grows.
Is outsourcing cheaper than an employee's hourly cost?
Often per hour, but that is not the main point. The question is whether moving routine work out lets the employee spend more hours on work worth far more than either cost. Compare value as well as cost before deciding.
Written by
Global Bridge Labs (GBL) is a UK–Sri Lanka partner for social media, websites and BPO. Everything here comes from client delivery, not theory.
