When asked “What is an hour of your time worth?”, many engineers are quick to calculate an answer based on dividing their annual salary by 52 weeks and then by 40 hours. If you earn an average salary similar to that published by U.S. News & World Report in 2014, you may calculate something like this:
That answer may reflect how you value your time, but I assure you that it falls significantly short of what your time is actually worth. To fully realize why, you need to understand the concept of burden rates.
Burden rates are the indirect costs associated with employees, over and above gross compensation or payroll costs. Typical costs associated with the burden rate include payroll taxes, worker's compensation and health insurance. Paid time off, training, travel expenses, vacation, sick leave, pension contributions and other benefits also need to be included in the calculation. Not often discussed in your typical engineering curriculum, burden rates need to be added to any payroll costs to represent a more accurate picture of a person’s expense.
Generally, burden rates range between 30% and 40% for design and engineering. Therefore, a more realistic equation would be as follows:
By thinking in terms of fully loaded costs, you can make better decisions when implementing new processes and purchasing new tools to improve productivity. Low-value tasks that consume a mere 15 minutes a day can quickly add up to cost your company hundreds of dollars per employee every month. A worthwhile exercise is to understand your burden rates and the true hourly costs for your design team. Then, once a month, look for the frequent low-value tasks that impede your focus on higher-value activities.
At Onshape, we believe that there are numerous inefficiencies with traditional CAD tools. These range from the half-day update process whenever a service pack needs to be installed, to the flawed copy, zip, and email process that most engineers use to share files. Our full-cloud solution is not only a powerful CAD system, but it also improves daily productivity when used alongside traditional CAD.
Point blank, here’s why adding Onshape to your toolbox will give your company instant results. An engineer or designer who saves two hours a week by using Onshape alongside their traditional CAD system will save your company around $5,700 per year while also boosting productivity. With a team of 10 designers, your firm could save more than $45,000 per year!
Those savings only increase when Onshape is used as your primary CAD and data management tool as the costs of licenses, IT overhead (due to lengthy installations), and heavy hardware costs are virtually eliminated.
On those frustrating days when you feel like you’ve gotten nothing done, it is worth asking yourself where time was wasted and take action. After all, your time is much more valuable than you think.