The fully loaded cost of an employee for a business is not the employee's salary.

"The fully-loaded costs of employees are much higher than their salary: exactly how much higher depends on your locality’s laws, your benefits package, and a bunch of other HR administrivia, but a reasonable guesstimate is between 150% and 200% of their salary." -https://www.kalzumeus.com/2012/01/23/salary-negotiation/

Most employees' salaries are not 100k.

> Most employees' salaries are not 100k

I'd hypothesis that most employees on whom companies spend $10k for cloud software are making $100k+.

Obviously the fully-loaded cost of an employee goes beyond the cash compensation.

But even so, the average salary in the US is < $60k. Use whatever multiplier you want, $200k is way high.

Companies are spending far less than $200k/employee all-in.

So to slightly rephrase the OP's question:

> Do people really believe that $100k is a normal salary?

Yes but companies that are spending $60K on an employee aren’t spending $10K on their SaaS.

I don't know much about jobs outside of tech, but I know most of them at the entry level to a few years of experience in accounting, finance, real estate, etc. do not pay much over $60k (if that) and pretty much all of those jobs are going to use things like Salesforce or other expensive SAAS tools and software.

Salesforce "Enterprise" is $1800/user/year [0], and presumably large enterprises are negotiating better rates than the published ones. Every single employee would need to be using five and a half packages like this at full list price to hit $10k/year.

In Sales you would have SFDC plus some kind of enablement tool like Salesloft/Outreach plus a prospecting tool like Sales Navigator or DiscoverOrg plus enterprise Gmail plus a communication tool like Zoom; and then there's the analytics stuff, the HR/finance parts, etc...10k is probably way too high an estimate but 5k is believable for a B2B startup with a scaling sales team.

I won't quibble too much with the precision of the $10k number, which will vary widely.

But it's pretty obvious that a basic "customer support" combo like Office 365 + Okta + Zendesk + Intercom + Slack + Zenefits starts to add up to a meaningful percentage of the employee's take-home compensation. (Remember these are positions where $20/hr is a good rate.) And remember, the comparison figure for managers over 50 is roughly $0, which approximates the spend on these functions as far back ago as 2008.

The assumption is a $100K salary. The other $100K is benefits, management, overhead, etc.

I don't know about most enterprises but I'm guessing any given cost per employee includes a lot more than salary.

In London, I'd guess the median salary for most enterprises is around £30-40K. National insurance, a desk, and a few other benefits are probably £20K on top of that.

If you're talking central London, that should be a fair bit higher.

I'm going on my recent experiences in the City (i.e. the financial district).

Recruitment, payroll, HR, facilities are other costs.

Factoring in all compensation, that is still a ridiculous figure.

Fully loaded costs (health benefits, 401k matching, cost of computer, HR business partners, etc.) for an employee are roughly 2x what their salary is. So yeah, 200k is a good estimate.

That's still very high. Average salary is much lower than $100k in the US. Even among college grads with 10+ years of experience, $100k is still a high-end job paying a high-end salary. It's nowhere near the average.

Take out all the low wage workers that don't use any apps, and the average goes up.