Now there’s room to grow™

Now there’s room to grow™

Quantifying how a variable workforce drives profitability for firms

To highlight the real costs of full-time vs. seasonal senior consultants, we created our Savings Calculator. This provides the estimated savings that clients can expect when adjusting their workforce to the computed optimal percentage of variable staff.

May 06 2022 • 6 min read

Quantifying how a variable workforce drives profitability for firms

The True Costs of Full-Time vs. Seasonal Senior Consultant

How Flexible Talent Gives High-Performing Firms Room to Grow

Today’s audit/advisory firms face a dilemma: the pressure to take on more work and to grow their practices, against the backdrop of double-digit attrition, workforce compression, and widespread burnout. Add COVID-19 and increased cost sensitivity into the mix and you have a very real growth ceiling…when what’s really needed is room to grow.

This is why clever companies are embracing a transformed model. It incorporates into the permanent workforce “just-in-time staffing”, in the form of quality consultants who understand auditing/advisory and the nuances of clients’ industries.

The variable workforce model releases the pressure valve for audit/advisory firms that battle attrition, compression, and the Full-Time Equivalent (FTE) conundrum, but that buckle under the considerable weight of seasonal demand.

And the growth ceiling…is gone.

Smart firms need not pick a side: full-time or flexible. The two are not mutually exclusive; the “new nimble” is win-win. In-house departments can retain lean full-time teams to enable managerial scale and handle core competency work, while being supported by on-demand, as-needed senior consultants.

Makosi’s research shows that a blended complement of full-time and seasonal senior consultants mitigates risk, boosts the capacity of the in-house team, and optimizes spend. As the global economy begins to re-set itself, the companies that are best positioned for growth see flexible talent as the secret sauce of high-performing firms.

Assessing the Costs of Full-Time vs. Seasonal:

The Savings Calculator

To highlight the real costs of full-time vs. seasonal senior consultants, Makosi has created the Savings Calculator. This user-friendly tool enables partners, audit managers, and HR managers to identify hidden hiring expenses and compare permanent talent with equivalent flexible resources, dollar for dollar.

Employing a full-time senior consultant means a host of costs on top of salary and bonus. Instead of comparing one full-time hire to one on-demand contractor, audit/advisory firms should envisage the cost of an employee as a pool of expenditure.

More specifically, the true cost-to-company of a permanent staff member extends to region-specific taxes, the costs of employee benefits, the costs of recruiting and training staff, staff development expenses, and more. Also critical to consider is the average industry turnover rate and the costs of making a bad hire.

Illustrative Example:

An audit firm in the USA requires an audit senior with 3 years of auditing experience, specific to the client’s industry, which is Financial Services.

The Savings Calculator compares the cost of hiring a full-time auditor ($95,000 salary and $152,713 total cost to company) with engaging a flexible contractor.

The calculator estimates the total savings from utilizing a variable workforce can be upwards of millions of dollars in savings, depending upon team size and appetite for flexibility.

The result of the savings is calculated based on taking the annual salary of one senior staff member and adding the necessary additional costs to equate to total cost to company for that staff member. 

Total cost to company includes items such as:

-Taxes which might include various types of payroll taxes, unemployment insurance tax, social security or medicare taxes. In the USA, we estimate this at 9.5% using the IRS 2022 revised publication 15.

-Benefits, according to the December 2021 news release from the Bureau of Labor Statistics cost employers approximately 25-30% of the employee’s salary for private industry workers, which include personal time off, retirement accounts, and comprehensive insurance.

-Our turnover rate is a Makosi best estimate based on feedback in the market, including consideration of the well-publicised "Great Resignation" where some public accounting firms are seeing upwards of 30% attrition in their workforce.

-When it comes to the cost of a bad hire, the US Department of Labor in 2019 estimated this cost could be up to 30% of an employee’s salary. Makosi believes that firms hire the right candidates 75% of the time.

The Savings Calculator also calculates the optimal percentage of the clients workforce that should be variable. This is computed by evaluating the workforce compression between busy season and non-peak season and establishing how many permanent staff members would be needed to meet demands in the non-peak months and the Makosi variable force will be used to meet the additional demand in the busy season.

Annual Utilization Rate

Unique to the audit industry is the need to consider the optimal utilization of billable hours and the realities of workforce compression as a function of busy/off seasons.

Here’s an example: If a single staff member bills 1500 hours per year, with their heaviest workloads in January, February and March, and an uneven/declining workload from April to December, they are under-utilized for nine months of the year.

Makosi’s experience shows that, given the demands of busy season, it is an industry norm for audit staff to work overtime during a compact period of time, to meet regulatory and other deadlines. Thus, busy season is defined as anything over 115% utilization.

We have defined under-utilization as below 100%.

Workforce compression – the uneven spread of core staff utilization throughout the year – can be analysed and optimized using the Savings Calculator, to yield the ideal percentages of core vs variable staff a firm should have for best results.

By bringing in a variable workforce over a firm’s busy season, fewer permanent staff are needed during the off-season period, which increases each staff member’s annual utilization rate.

The calculator enables users to quantify, in the context of the optimal billable hours per staff member, how many core staff should be retained for the full year, as well as how large the variable workforce should be.

The overall financial benefit can therefore be calculated, with contractors shown relative to total salaries (in terms of total cost-to-company) and the potential savings in terms of total labor cost.

In the graph below, we compare the average number of hours billed per staff member per year with the optimal* (or target) number of billable hours for each staff member to work per year.

* Disclaimer: Makosi has applied a cap to the number of hours per year, at 2100 hours. We advise, to avoid workplace stress, burnout, and human error, that you don’t allow staff to exceed this number of hours and have therefore set the field to a maximum of 2100 hours.

For an individual’s billable hours to reach an optimal number, you want to increase their utilization during off-season – but what if you don’t have more work?

To bill more, with the same volume of work, you’d need to lower the number of permanent staff members you employ. The Savings Calculator can do this for you, indicating exactly what your numbers should be.

Now, let’s say the Savings Calculator shows you what percentage of your workforce should ideally be variable, to optimize utilization… but you’re simply not comfortable with those numbers. You’d like to start off with fewer variable workers. Use the Calculator to settle on a percentage that works for you.

Remember, too, that Makosi’s Savings Calculator can show you how much of your turnover is generated during which period of the year (and help you with the top-up required to optimize workforce compression in your firm).

The High-Performing Audit Firm

Cost should never be sole metric by which audit/advisory firms gauge performance. True value requires that spend, risk, and talent management be optimized. All three are equally important when it comes to revealing the benefits of a flexible workforce.

In the ‘Power Pack’ below, we explore the value-adding features Makosi offers:


Makosi offers a unique data-driven approach to matching the appropriate Makosi consultant to each specific project. Understanding the level of experience and technical skills needed by each client and using this to provide the suitable Makosi rockstars for efficient and effective on-demand talent.


The access to on-demand consultants who are already onboarded, tech-enabled and sufficiently trained alleviates the stress of deployment from the client completely.  Makosi onboarding is quick, seamless, and entirely removed from the client's burden. Makosi has a trusted outsourced IT tech company assisting with any software and hardware issues adding to the seamless transition of a variable workforce for the client.


The Makosi Engagement Manager is a no-cost quality control resource for the client. On Makosi’s payroll, these individuals work behind the scenes to oversee deployment and integration; manage legal, HR and IT matters; ensure culture fit; safeguard the audit/advisory firm’s priorities; and handle paperwork.

With skills aligned to the firm’s particular practice, the Engagement Manager offers an extra layer of management, enabling our clients to easily scale capacity.


The Makosi guarantee applied to all of our consultants’ work mitigates the financial risk inherent in bad hires for clients. This offers clients 100% guarantee of consultants that suit their expectations and specified needs.

What now?

It may seem, at least at first, that experimenting with on-demand talent is contrary to the conservative nature of traditional audit firms. Allow Makosi to talk you through it.

Contact Tim Bruno (CRO) on [email protected] for support and consultation.

Contributors: Darren Isaacs, Taryn Mackeown, Tiffany Markman.

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