So you want to calculate the cost of your meeting. Maybe it's a dreaded time waster or merely a matter of finding out how much it really costs to get all 200 people from the company in one room.
Counting costs is a simple task in theory. Just count up each individual expense and add them all together, right?
But when it comes to calculating the time each individual meeting attendee is worth, the costs of your meeting facilities, and the costs of your meeting technology, it quickly becomes not-so-easy.
Should you want a simple way to estimate the cost of your meetings in a matter of seconds, check out our free meeting cost calculator tool. Otherwise, read on to learn how to calculate the exact cost of your meetings.
When calculating your meeting costs, you can use the equations below:
Individual Meeting Cost = [Duration] X ( [Hourly Setup Cost] + [Attendee Hourly Sum] )
Yearly Meeting Cost = [Duration] * [Occurences] ( [Hourly Setup Cost] + [Attendee Hourly Sum] )
However, for the equations to work, it's important that you make sure you're computing expenses based on the same scale. Because most typical meetings are a portion of an hour, the easiest way to get to a comparable cost value is to write all of your expenses as their cost per working hour. Once you do that, calculating your costs is simple arithmetic.
The first thing you need to do is to write down a list of all of the possible expenses your meeting entails. Things like:
The above costs are the ones that are going to stay the same regardless of how many times you meet. Find out how much each costs annually or monthly, and then divide the total cost by the number of hours in a workweek (typically, this is 40). Doing so will give you a picture of how much your meeting setup costs are per 1-hour meeting.
More than likely, the cost you spend per hour on your meeting set up is very low.
For most organizations, the real cost of meetings comes from your employees' time. Many calculators, including the Meeting Cost Calculator by Owl Labs, focus on attendee salaries more than anything else.
Your setup costs aren't likely to be the bulk of any meeting cost. The real cost of your meeting is your employees' time. So how do you calculate what their time truly costs?
It all starts with your employees' base pay.
Let's work through an example. Let's say we want to calculate the cost of a 30-minute standup meeting with five colleagues, two of whom work remotely. The standup includes two middle managers, one team director, and two junior employees. Let's say that these are their salaries:
Meeting Attendee |
Yearly Salary |
Director |
180,000 |
Specialist |
40,000 |
Specialist |
50,000 |
Manager |
90,000 |
Senior Manager |
110,000 |
When you have a salary, it's fairly simple to get your hourly pay. Simply divide the total salary by the number of weeks and hours worked in a year:
Hourly Rate = Salary / Weeks in a Year / Hours in Work Week
Ex. Hourly Rate = $180000 / 52 / 40
Hourly Rate = $86.54
But what about the other costs of having employees, like taxes and benefits?
If you have the power and information to know each of these exact costs, then go ahead and include those costs when calculating your employees' hourly pay.
If not, a good rule of thumb is to multiply your employees' hourly rate by 1.4, a multiplier we chose based on the average costs of employees to their employer.
Back to our example, the hourly pay for each meeting attendee would be as follows:
Meeting Attendee |
Yearly Salary |
Base Hourly Rate |
Hourly Rate * 1.4 |
Director |
180,000 |
$86.54 |
$121.15 |
Specialist |
40,000 |
$19.23 |
$26.92 |
Specialist |
50,000 |
$24.04 |
$33.65 |
Manager |
90,000 |
$43.27 |
$60.58 |
Senior Manager |
110,000 |
$52.88 |
$74.04 |
Total / Attendee Sum |
$316.35 |
Once you have the hourly rate for each employee, sum each hourly rate for each meeting attendee to get the base attendee cost for an hourly meeting. In our example, the meeting attendee sum would be $316.35.
Finally, now that we have our meeting expenses written in terms of an hourly cost, we can easily combine all of our information and find out meeting cost.
As a reminder, we calculate the total meeting cost using the following formula:
Yearly Meeting Cost = [Duration] * [Occurrences] * [Hourly Setup Cost] * [Attendee Hourly Sum]
In our example, we wanted to calculate the cost of a weekly, 30-minute standup with five attendees, whose Attendee Hourly Sum we calculated to be $316.35. Let's also assume that our hourly setup cost is $4.
Now, the duration of our meeting is 30 minutes. Since we've calculated all of our costs on an hourly rate, we can give one hour the duration value of 1. Because 30 minutes is half of that time, we'll give a 30-minute meeting the duration value of .5.
Additionally, we know that there are 52 weeks in a year, so we can assume that a weekly standup meeting would have 52 occurrences.
Now that we have all of our variable values, we can plug them into our formula:
Individual Meeting Cost = [Duration] X ( [Hourly Setup Cost] + [Attendee Hourly Sum] )
= [.5] * [4+316.35]
= $160.17
Now that we know our individual meeting cost, we can multiply it by the number of meeting occurrences to find out what our total yearly cost of that meeting is:
Yearly Meeting Cost = [Duration] X [Occurrences] ( [Hourly Setup Cost] + [Attendee Hourly Sum] )
= [.5] * [52] * [4+316.35]
= $8329.00
And there we have it. After all that work, we know that our weekly meeting costs the organization $160.17 per meeting and a total of $8,329.00. That may sound like a lot, but sometimes the costs of collaboration are necessary.
Okay, you may be thinking, "That's good to know how much we spend on the total meeting. But what about how much time we waste in all of those meetings?"
For that we have another equation:
Time Wasted Cost = [Number Minutes Wasted / 60] X [Occurrences] * [Sum of Attendees' Hourly Rate]
In our same example before, let's assume that the group wastes 10 minutes weekly. This time could be wasted on chatter, or maybe it's the time that was wasted getting the meeting all set up.
Time Wasted Cost = [10/60] * [52] * [316.35]
= $2,741.70
When you consider that the 10 minutes wasted is a full third of our meeting, you can see how those minutes spent turns into quite a big cost.
Now that you've calculated the costs of your meetings, make sure to check out our meeting cost calculator and share it with a colleague.
Topics: Meetings