Commercial
Total cost of ownership
Everything a hire or a project costs, not just the invoice.
Definition
The full cost of a decision over its life: salary or fees plus employer contributions, recruitment, equipment, management time, onboarding ramp, tooling, and the cost of the work not happening while a role sits open.
Why it matters
It is the only fair basis for comparing an in-house hire with an outsourced one, and both sides of the argument tend to avoid it. Comparing a salary against an invoice makes outsourcing look better than it is; ignoring vacancy cost makes hiring locally look better than it is.
Related
Read next
Burn rate
How fast a project is consuming its budget against its progress.
Read the definition ›Onboarding ramp
The time before a new person is fully productive.
Read the definition ›Year-one cost
What a role or engagement really costs in its first twelve months.
Read the definition ›All-in rate
A single rate that already contains every cost the provider will charge.
Read the definition ›Next step
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