Question

Meetings cost money, why?

There are six [6] employees in a healthcare morning meeting. Five [5] of the employees earn $45 per hour; and, one[1] employee earns $50 per hour.

Calculate the direct cost of a one [1] hour meeting to the organization.

Do not consider travel time or fringe benefits.

Answer 1

Meetings form a crucial element in the decision making process of most organizations, if not all. Organizations conduct meetings to identify and understand the solutions to the complex business problems. However, this activity is an expense to the organizations as the time spent on meetings by employees does not add to the productivity of the organization i.e. No real outputs by the employees during the period of meeting.

The lost productivity impacts the balance sheet of the organization which would otherwise been utilized for productive activities. Thus meetings do add up to the costs of the organizations .Hence it very essential that organizations spend meeting time effectively and efficiently to address their business problems and not waste time unnecessarily by discussing about irrelevant topics and ideas.

Cost of Five employees at $45 per hour =5*45=$225

Cost of One employee at $50 per hour=1*50=$50

Total cost =$225+50=$275

Total cost =$275*[number of hours of meeting] =275*1=$275

To account for lost productivity, multiply the total cost by 2

Direct cost to organization=$275*2

                                           =$550