Hammond & Co
Introduction
For many landscaping and gardening limited company directors, taking on staff feels like a major step forward.
More people on site usually means:
- More work completed
- Larger jobs taken on
- Less pressure on you personally
But employing staff is also one of the biggest financial commitments your business will make — and one of the most commonly underestimated.
This guide breaks down the true cost of employing staff in landscaping and gardening businesses — beyond just the hourly rate — and explains why many growing companies end up busier than ever… but not necessarily more profitable.
The Common Starting Point: “I Can Afford the Wages”
Most hiring decisions begin with a simple thought:
“We can afford £X per hour.”
But wages are only one part of the picture.
The better question is:
“Can the business afford the full cost of employing this person — consistently?”
This is where many landscaping businesses get caught out.
The Visible Cost: Gross Wages
Let’s start with what’s obvious.
Gross wages include:
- Hourly or salaried pay
- Overtime
- Bonuses or incentives
In landscaping and gardening, wages can vary due to:
- Weather conditions
- Seasonal demand
- Project deadlines
But even here, the agreed hourly rate is rarely the true cost to the business.
Employer’s National Insurance
Once wages pass certain thresholds, the business must also pay Employer’s National Insurance.
This is:
- An additional cost to the company
- Not deducted from the employee’s pay
- Often overlooked when budgeting
It’s typically one of the first costs directors notice increasing as the team grows.
Workplace Pensions (Auto-Enrolment)
If you employ staff, you’ll likely need to:
- Enrol eligible employees into a pension scheme
- Make employer contributions
Even at minimum levels, this becomes a consistent cost — especially with multiple employees.
This isn’t optional — it’s a legal requirement.
Holiday Pay: Paying When Work Isn’t Being Done
Employees are entitled to paid holiday.
This means:
- You’re paying wages
- While no work is being completed
- Often during quieter periods
For seasonal landscaping businesses, this can feel particularly challenging — but it must be planned for.
Sick Pay & Absence
Even your most reliable team members will have time off.
This can include:
- Illness
- Emergencies
- Planned absences
Statutory Sick Pay and lost productivity are real costs that are often overlooked when hiring.
Training & Onboarding
New staff don’t deliver full value immediately.
There’s always a period of:
- Training
- Supervision
- Learning processes and standards
During this time:
- Wages are still being paid
- Productivity is lower
- Senior staff or directors spend time supporting
This is a hidden cost that many businesses don’t factor in upfront.
Equipment, PPE & Tools
Employing staff usually means providing:
- PPE
- Tools and equipment
- Uniform
- Access to machinery
In landscaping businesses, these costs can be significant — particularly where safety or specialist equipment is involved.
Vehicles, Fuel & Insurance
As your team grows, so do operational costs:
- Additional vans or shared transport
- Increased fuel usage
- Higher insurance premiums
These costs often build gradually and are only fully noticed over time.
Payroll & Compliance
Employing staff brings ongoing administrative responsibilities:
- Payroll processing
- RTI submissions to HMRC
- Pension reporting
- HR compliance
Even when outsourced, these services still carry a cost — both financially and in terms of management time.
The Productivity Gap
One of the most underestimated factors is the difference between paid time and productive time.
In reality, working hours include:
- Travel between jobs
- Set-up and pack-down
- Weather disruption
- Non-chargeable tasks
An employee paid for 40 hours may only generate:
If pricing doesn’t reflect this, margins reduce quickly.
The Seasonal Risk
Landscaping and gardening businesses are:
- Weather-dependent
- Seasonal in nature
- Prone to delays and cancellations
However, employment costs remain:
- Fixed
- Ongoing
- Payable regardless of workload
This mismatch is one of the biggest causes of cash flow pressure in growing businesses.
Why Being Busier Doesn’t Always Mean More Profit
Hiring staff often leads to:
- Increased turnover
- More responsibility
- Greater admin and oversight
But without proper planning and pricing, it doesn’t always lead to increased profit.
This is why many directors feel:
- Busier than ever
- Stretched financially
- Under-rewarded
Despite having a full diary and a growing team.
How to Employ Staff Sustainably
1. Understand the Full Cost
Before hiring, consider:
- Wages
- Employer’s NI
- Pension contributions
- Holiday and absence
- Equipment and vehicles
- Downtime and productivity gaps
This gives you a realistic cost per employee — not just an estimate.
2. Price Work Properly
Your pricing needs to cover:
- Labour
- Overheads
- Non-productive time
- Profit
If pricing is based on wages alone, margins will always be under pressure.
3. Plan for Seasonality
Busy periods should:
- Build reserves
- Fund quieter months
- Reduce future stress
Hiring decisions should reflect the full year — not just peak season.
4. Review Performance Regularly
With clear management accounts, you can:
- Track labour costs
- Measure output vs cost
- Identify issues early
Without this visibility, problems tend to build unnoticed.
How Hammond & Co Support Landscaping Businesses
We work closely with landscaping and gardening limited companies to:
- Understand the true cost of employing staff
- Analyse labour margins
- Price work sustainably
- Plan growth without creating financial pressure
Our focus is on profitable growth — not just keeping you busy.
Final Thoughts
Employing staff can transform your business — but only when the numbers support the decision.
The biggest mistake isn’t hiring.
It’s hiring without fully understanding the cost.
When you have clarity, decisions become easier — and far less stressful.
Thinking About Growing Your Team?
If you’re considering hiring — or want to understand whether your current team is truly profitable — we’re always happy to have a conversation.
No pressure. Just clear, practical advice.