Certified Building Official Management Practice Exam

What percentage of costs can employee expenses represent in public and nonprofit organizations?

1. 20% - 40%

2. 30% - 60%

3. 50% - 80%

4. 70% - 90%

The correct answer is: 50% - 80%

Employee expenses often make up a significant portion of the total costs for public and nonprofit organizations due to the nature of their operations. In these sectors, a large share of the budget typically flows toward salaries, benefits, and other related personnel costs. When you consider the operational structure of many public and nonprofit entities, which frequently rely heavily on human resources to deliver services and achieve their missions, it becomes clear why employee expenses can range from 50% to 80%. This extensive commitment to human capital reflects the need for adequate staffing to facilitate programs, support clients, and maintain operational effectiveness. The range suggested highlights that while organizations may have varying operational costs, a substantial proportion is consistently allocated to support their workforce. This emphasis on human capital is crucial, as employees are often the primary vehicles through which these organizations achieve their goals and serve their communities.