By Francis Goldwyn

Think about the last time your company purchased a piece of capital equipment or computer system. Assume the purchase price was between $150,000 and $300,000. Then let’s add in the cost of installation, service contracts, additional hardware and software, and insurance. People will need to be trained on how to use the new equipment or computer. Lastly, there is the cost benefit analysis to monitor the investment against predetermined parameters.

Now think about the last time your company hired a senior executive. Assume the salary and bonus was between $150,000 and $300,000. Add the direct costs of employee benefits and pension, and a multitude of indirect costs. And these are recurring costs where as the purchase price of the machine or computer is paid once.