I was sitting in a meeting with my sales team the other day. Due to my own lack of planning, the meeting, which I had called, was meandering. It was at the height of the meeting’s irrelevance that it struck me: as owner of the company, I was the only one not being paid to be there.
We were all sitting there admiring how nice the summer in Vancouver had been so far and everyone was making money except me.
I wound up that meeting fast.
That experience made me wonder just how much money is wasted in the corporate setting. In a virtual company like mine, a lot of overhead cost is avoided because we have no need for fancy offices and, when we do, there are places to rent or borrow (or there’s Starbucks for the price of a coffee). It’s been a while since my last formal corporate meeting where someone was dumb enough to pay me to be there, but the cost breakdown was likely something like this:
Assume six attendees all making an average of $100K per annum. That’s $47 an hour based on a 40-hour week with 52 weeks in the year.
Assume there is one weasel-like consultant, who some moron asked to attend at $100 an hour.
The labour cost then for a one-hour meeting is $382. But, as an IT guy, I’ll bet most one hour meetings take two hours. So now you’re at $764.
That figure does not include benefits. Since the cost of benefits is a better kept secret than how George W. Bush got elected president of the United States, I will take a stab in the dark and say the meeting now has cost $1,000.
That’s not counting the hidden labour costs to that meeting. The cleaning, security, management and administrative staff didn’t attend the meeting, but without them you would not have been able (or forced) to attend.
And it doesn’t end there. Downtown office space may run $20 to $35 per square foot. Which is why your cubicle is smaller than a toilet and why for all you city dwellers, your commuting time extended when enough highways were built to make the economics of moving out of downtown rather attractive.
Hydro and other physical plant issues – like amortization of the furniture, equipment, paper for flip charts, etc. – all are part of your meeting cost as well.
So, the price tag on your one hour meeting (that took two hours because some idiots were late and the figure skating scandals were preoccupying others) could easily be $1,500.
That’s a lot of money to some people. According to StatsCan, in 1999, the average employee wage was just over $16 an hour. For your $1,500 meeting, you could hire someone for 93.75 hours or 2.34 weeks.
The question is, was the meeting worth it?
IT projects and services exist for only a few key reasons: to help earn new revenue for the company, to reduce costs on an existing business process through automation and to ensure the business can keep providing services and collecting money.
When none of these objectives are met, the company must go somewhere for operating funds. They can sell shares or go into debt. Both are what our hunter-gatherer ancestors would have called eating your prey before you catch it, or trading the berries you haven’t picked yet for that new loincloth.
So the next time you and the rest of the IT staff are at a meeting, make sure you take away some nugget of information that will be useful – or at least that the cost justifies the wear and tear on the carpet.
Ford is the owner of Quokka Systems Consulting in Vancouver.