Before we approve a new recurring subscription for an operational AI platform, how do we calculate a realistic breakeven hurdle rate based on loaded employee capacity?

Question

Tyler Smith · Accepted Answer

Stop calculating return on investment using theoretical hours saved. If an employee saves five hours a week, those hours do not show up on your profit and loss statement unless you convert that recovered capacity into dropped payroll, eliminated contractor spend, or measurable revenue growth.

To establish a true breakeven hurdle rate, run the numbers through your employee loaded cost. Take the base salary of the seat being augmented, add payroll taxes, healthcare, software seats, and overhead, then divide by two thousand working hours. If an operations specialist costs forty dollars an hour loaded, and an AI workflow tool costs four hundred dollars a month, that tool costs ten loaded labor hours per month.

Do not approve the tool based on the assumption that the employee will simply work faster. Demand that the department leader identify which specific low-value tasks will be eliminated completely, and where that recovered capacity will be redirected.

Require a written commitment on three operational outcomes before greenlighting the spend:
- First, the exact manual task being decommissioned from the standard operating procedure.
- Second, the specific Scorecard measurable that will absorb the recovered capacity, such as a thirty percent increase in processed client files or a reduction in outsourced temp labor.
- Third, a sixty-day review date during your quarterly planning cycle. If the Scorecard metric has not moved or payroll has not been optimized within sixty days, pull the plug on the subscription immediately.