this post was submitted on 03 Dec 2023
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I’m extremely curious where you get those numbers from, I operate businesses and that doesn’t pass the sniff test.
I've used the 3x multiplier for staff planning at services companies since the early 2000s.
Perhaps there are regional differences, but they've rung true for planning billable rates of return at every services company I've worked at in the last 20 years here in AU.
I realise that the services aspect isn't relevant, but having the sum of indirect staff costs equivalent to staff salary cost when office space is involved isn't a massive stretch in my experience. (Indirect costs would include office rent, utilities, infrastructure and a share of shared functions such as IT, HR, facilities etc...)