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Manual Process Cost Calculator

Before deciding whether to automate something, it helps to know what it costs today. Enter the people, the hours and the error rate, and get an annual figure — including the correction time that never appears in any budget.

How do you calculate the cost of a manual process?

Multiply the number of people doing the work by the hours each spends per week, then by their fully-loaded hourly cost and by 52 weeks. Then add rework: the time spent correcting errors, which is usually invisible because it is absorbed into "the job". The total is the number to compare against an automation build estimate. If a process costs less per year than it would cost to automate, the correct decision is to leave it alone or simplify it — and a good calculator should be willing to tell you that.

Methodology

How this is calculated

Published in full, so you can disagree with it. A tool that hides its model is a lead form.

Weekly hours = people × hours each. Annual hours = weekly hours × 52.
Annual cost = annual hours × fully-loaded hourly cost.
Rework is estimated by treating the monthly hours as roughly 15-minute units of work, applying your error rate, and multiplying by your average fix time.
The headline figure is direct labour plus rework. It excludes management time, the cost of delay, and the opportunity cost of what those people would otherwise do.

Assumptions and limits

Fully-loaded hourly cost should include employer taxes, benefits, tooling and a share of management. It is typically 1.25–1.4× the bare wage.
52 working weeks. If your team takes significant leave, the figure is slightly overstated.
The 15-minute work unit used for rework is a proxy. If your process handles large batches rather than individual items, treat the rework line as indicative only.
Downstream consequences of errors — a lost customer, a late shipment, a compliance issue — are not modelled and are often the larger cost.

Worked examples

4 people, 6 hours each per week
Roughly 1,250 hours a year — about two thirds of a full-time role — before rework. That is the number to hold up against a build estimate.

One person, 3 hours a week
Under the threshold where a custom build repays. Simplify the process, fix the template, or use an off-the-shelf tool.

FAQ

Questions about this tool

A useful rule of thumb: the annual cost should exceed the build cost, and the process should be stable enough that it will still exist in two years. High-volume, rule-bound and stable is the profile that repays. Low-volume or constantly changing is not.

It changes it. A high error rate often means the process itself is unclear or the input data is bad. Automating an unclear process makes it produce wrong answers faster. Fix the definition first.

Ideally yes — chasing, checking and reporting on a manual process is real cost. We left it out to keep the model simple and conservative, which means your true figure is higher than shown.

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