The full cost of an in-house paid ads hire

When a business compares a hire with an agency, the hire usually looks like a salary and the agency usually looks like a fee. The salary is only one part of what an employee costs you, so the comparison is easily unfair to whichever option is simpler to price. This checklist lists the lines to ask about. I give no amounts, because they depend on the person, the role and your licence, and I will not guess them.

The cost lines

• Salary and allowances, as you would agree them.
• Recruitment: an agency or advertising fee, your own time and any relocation.
• Work permit and residence costs for an employee coming from outside the UAE. Ask your accountant or PRO what applies to your licence.
• Medical insurance. Ask what your emirate and your free zone require.
• End of service gratuity, covered below.
• Flights, leave and cover for the person’s absence.
• Equipment and software licences the person needs.
• Training and certification time, including renewals.
• Management time: someone has to set objectives and review the work.

Each line goes into one of two boxes in the hiring cost comparison. Costs that repeat every month go in the monthly boxes, and costs you pay once in the first year go in the one-off box.

End of service gratuity

The UAE Government portal sets out the rules for private sector workers. Full-time workers with one year or more of continuous service are entitled to gratuity, and workers with less than a year are not. It describes 21 days’ salary for each year of work between one and five years, and 30 days’ salary for each year after the first five. It also says the total gratuity shall not exceed the wage of two years, that it is calculated on the basic salary and not on allowances such as housing and transport, and that employers must pay all outstanding wages, other entitlements and gratuity within 14 days of the contract ending^[1].

The page also refers to a savings scheme that applies to private sector employers and employees and to free zones, so your position may differ from the standard rule. Ask your accountant or lawyer which applies to your business, and ask for a monthly figure you can set aside. Enter that figure in the monthly “other costs” box for the in-house option. This is general information about a federal rule, not legal advice.

The months before they start

A hire takes time to find, and your campaigns may need managing in the meantime. If advertising continues while the role is open, someone is covering it, and that cost belongs in the comparison. If advertising stops, the cost is what you did not earn. Neither appears on any salary slip, and I would write it down.

Entering it in the comparison

The tool uses the same lines for the freelancer and the agency, so you can see where the costs sit. For those options the lines are usually shorter, because the supplier carries its own employment costs. The cornerstone guide sets out the order in which I would make the decision, and the common mistakes include the ones that follow from leaving a line out. If you want a view on a specific set of numbers, you can ask me about managed PPC on my own site. I sell that service.