Get “SMART” !

Get Smart or Get “SMART”?

When people from my generation see the term Get Smart – they might first think of the old TV classic with Chief, Max and 99. While that was great for a laugh, here at Ridgeback, we refer to Getting “SMART” more in the business sense where employers can drastically reduce their expenses while also improving their capabilities.

Software developer true employee cost image

When well respected institutions like MIT estimates the true cost of an employee is 1.25 – 1.4 times higher than their salary. So if you hire a full-time senior software developer for $125,000 per year, you can expect to pay between $156,250 and $175,000 total for that employee.

“Getting SMART”

First off, the acronym for SMART simply represents a philosophy that will provide a


In order to “Get SMART” you simply need to follow the four simple SMART principles identified below.

  1. Outsource certain tasks to offload overhead.
  2. Think of your outsourced party more as a Strategic Partner than just a third party vendor. True Strategic partners realize the importance of your success and become a trusted agent that can plug directly into your processes and procedures.
  3. Put control measures in place to make sure you obtain Superior Results from your new strategic partner.
  4. Pay your strategic partner 20% Below your employees annual salary and bonus. Doing so means you’d probably be reducing your true employee cost by 50 % or more.

The “SMART” program isn’t your normal fee arrangement. It’s a fee that your company can pay to a highly capable and cost efficient outside party that will provide you certain needed capabilities.

As stated in principle #4, in order to be considered SMART, the fee must always be significantly less than what employers pay an employee (we recommend paying no higher than 80% of the employees salary and bonus).

Don’t know what your true employee cost is? Don’t worry, most executives and business owners don’t. Most just realize its significantly higher than salary alone.

But lets take a quick look at a simple example.

Let’s say you have a single employee with a $60,000 salary with 10% max bonus. Now, many employers just look at the salary but if we look a little deeper, we see not only that the bonus is on top of salary but so are many other factors like payroll taxes, benefits, Paid Time Off (PTO), office space, supplies, equipment, etc…

Salary $60,000
Payroll Taxes $6,650 (NYS)
Bonus $6,000
Benefits $6,896 single $13,927 family
Sub Total $79,546 single or $86,577 employee family benefits

Employee cost continues to climb when you add in PTO, office space, supplies, equipment, etc…

So, Why Should Your Organization Consider “Getting SMART?

First off, concern about expenses is nothing new. Organizations of all sizes often grapple with the question of outsourcing or hiring and maintaining employees. This issue mainly arises due to the need to control their expenses as well as the seasonal demand of business. However, many organizations don’t achieve the level of savings that can be made.

When weighing different factors and comparing the pros against the cons, it usually makes sense to outsource most of the work out to reliable “strategic partners” (not just a vendor) rather than maintain employees.

At Ridgeback, we looked at the true cost of maintaining employees and developed the SMART program to meet the needs of businesses of all sizes.

Many businesses make the mistake of just looking at the direct costs associated in maintaining employees and not the whole picture.

The truth is, employees are expensive to maintain and the salary you pay them is only one of many costs.

Let’s take a look at the some additional costs employees bring.

To learn how to Get SMART with your organization, contact us at:

Phone: (646) 883-2927

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