It’s always interesting to us that so many people forget the first and primary cost of having a meeting.  Whether people are traveling or not – whether it’s 10 people or 10,000 – it’s the first investment that needs to be considered.

That cost – is people’s time.  And we mean people’s time expressed as a function of salary.  This is especially true of organizations that are paying the attendees – but it’s a value consideration for any company having any meeting.  It helps weigh decisions and budget issues in a new light.

The first budget and planning calculation you should make is the real cost of time.  It may not be incremental cost, but it’s a real cost that is too often overlooked.

For example.  if you are bringing 200 people together for a meeting – first estimate the average of earnings for the people in the room.  Since you’re not writing a check or authorizing payment, it’s not important to be exact – but it is important to be close.

If you’ve determined that the average salary of the 200 people attending is $65,000 a year, convert it to hourly by dividing by 2080 (52 weeks a year, 40 hours a week) to get an average hourly wage.  For this example, it’s $31.25.

Next, calculate the number of hours these people will be contributing their time to attending the meeting.  If they’re flying for a day and attending a cocktail reception on arrival day, call it a day and put down 8 hours (assuming no overtime).

Then add another 8 hours for every day of meetings, activities, and events.  And another 8 hours for the travel day home.

So if you fly people in on a Monday and meet on Monday night, then meet all day Tuesday and have an award program on Tuesday night, then have a breakfast meeting and send them home… that’s basically 3 days times 8 hours or 24 hours.

Multiply the 24 hours of contributive time by the average hourly rate (in this example, $31.25) and the number of attendees (200 in this example).

So for this example – we’ve already spent $150,000 to have these 200 people come in for the meeting.

The value received on the part of the attendees – and what they’ll remember, think, say, and DO as a result of attending – should far exceed this contributive cost of attendance PLUS all other conference costs.

The contributive cost of attendance – is before the travel & transfers, meals, activities, and heads in beds.  It’s also before room drops or program materials.

The reason we feel it’s so important to make this calculation first – is it puts perspective on every other decision.

We’ve seen people struggle over a $2500 coffee break or relatively small meeting enhancements.

This isn’t to say – by any means – that the overall budget should be tossed.  We realize that budgets are there for a reason.

But let’s use two other examples.

First – consider 1200 people for the same program.  Now, your contributive cost for attendance is up to $900,000.  This is the kind of meeting where costs can twist wildly out of control – because there are 1,200 people.  Anything you do – from coffee service to $7 cokes to $20 glasses of wine… are always multiplied by 1,200 and costs become material very fast.

What we’ve seen a number of companies do over the years, is accept the food and transportation and accommodation costs as “necessary evils” … and every other cost to be avoided at all costs.  They conclude, not inaccurately, that you have to get the attendees to the meeting, you have to feed them, you have to give them a place to sleep, and you have to have a room to meet in.

But that’s often where we see it fall apart.  They can justify (using the logic above) to justify a $36,000 coffee break and a $150,000 dinner.  But they are sometimes challenged to make the leap to quality meeting elements.

Can we afford an extra screen?  Or two?  Do we need delays?  Do we use house AV or hire an outside company?  Do we include interactive elements?  Do we develop a smartphone app?  All of these things add cost, for sure.  And again, we get that the budget is a critical consideration.  But if you’re bringing these people together for this meeting – and you really are spending $36,000 for cokes, coffee, and coffee cake… doesn’t it make sense to consider the other meeting components in the same light?

If people can’t see the speaker and the graphics, if they can’t hear the information, the money spent on food, travel, and accommodations is essentially lost.  If they can’t participate and engage, they’re not as likely to remember and take action.

And if they don’t take action – what’s the point?

The final example is one that is a little closer to everyday home – and still one that is lost on too many.

When you’re asking 10 people to come together for a 3 hour planning meeting – at your office.  No one is flying, there are no meals, there are no “real” expenses.

But calculate the contributive attendance cost.  $31.25 times 3 hours times 10 people.  That’s $937.50.  Is there $938 dollars worth of content?  Will they walk away from the meeting ready to contribute $938 worth of information and productivity to company objectives?

It’s important to keep these kinds of numbers in mind – no matter how many people you’re inviting.