The true cost of IT field service labor
Think 1099 contractors are more expensive than W2 employees? Think again.
June 21, 2022
When comparing the cost of a full-time W2 technician to the cost of putting that work on a 1099 network, many companies incorrectly think the 1099 network is more expensive. In the infographic, we break down in actual dollars and cents why W2 labor is the more expensive option, and bring to light the many cost factors companies often forget to consider. Here are just three.
Utilization
100% utilization isn’t realistic for a W2. Even if you achieve 80% utilization, that doesn’t mean every single one of those hours is chargeable. 1099s on the other hand are 100% utilized because you’re only paying when you need them.
Travel costs
With a W2, you pay them for every minute they’re behind a windshield or on an airplane – and usually not billing the client for it. Independent contractors generally build travel costs into their hourly rate.
Additional costs
On top of a W2’s base salary, there’s a ~30% cost burden for benefits, plus overtime pay, plus mileage, plus availability pay, plus tools and training, and so on. The hourly rate of a 1099 is already fully burdened.
We get it – comparing costs is complicated. That’s why this infographic illustrates two different ways to look at labor cost: from a work order perspective and an annualized perspective.
Where did we get our numbers? From the 50+ years of combined field services experience of Jeff Novotny, Director of Network Development at Field Nation and Shawn Fields, Sr. Field Services Strategist at Field Nation. Before joining Field Nation, Jeff spent nearly two decades at CompuCom and several years at Fujitsu. Shawn is a veteran of NCR, CompuCom, Siemens, and General Electric.
Ready to see the per work order savings and annual savings you can realize by shifting some of your non-core work to a 1099 network?
Compare the true costs of W2 vs. 1099 labor
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