Employee or CNC

Hire a Skilled Employee or Invest in a Legacy CNC: Which is the Best Choice

As a business owner, you are constantly faced with the decision of whether to invest in human labor or automation to grow your business. One of the most common dilemmas in small and medium-sized workshops is choosing between hiring a skilled employee and purchasing a CNC (Computer Numerical Control) machine. The cost implications can significantly impact long-term profitability.  The following is a complete breakdown of the cost involved. 

Hiring an Employee

Hiring a new employee is a significant step for any business. While it can signal growth and opportunity, it also brings substantial costs—both direct and indirect. 

Training

Perhaps the most underestimated cost is the time it takes for a new employee to become fully productive.  The average ramp-up time is 3 to 6 months.  During this period, productivity may range from 25% to 75% of that of a seasoned employee.  It can also require training resources in both time and money. 

If a fully productive employee generates $5,000/month in value, and a new hire takes 4 months to reach full capacity, that’s $10,000–$15,000 in lost productivity alone.

Downtime

Employees will take sick leave, vacations, or make errors that reduce productivity.

Turn Over

It is inevitable that you will not be able to retain every employee you hire.  Training and bringing a new employee up to speed just to have them quit is an unavoidable frustration that will cost you precious time and money.

Wages

While an employee’s initial wages may start at $20.00 per hour or $41,600 per year, annual wage increases due to inflation, market competition, or performance is evitable.  Wages repeat year after year.

Additional Expenses

Social Security Tax, Medicare Tax, Federal Unemployment Tax (FUTA), State Unemployment Tax (SUTA), Workers’ compensation insurance, and costs related to OSHA compliance, safety training, protective equipment, etc. will add between 15% and 25% of wages paid. 
Other expenses may include health insurance and retirement contributions. 
Hiring and training a new employee is not just a matter of salary—it’s a strategic investment that affects every part of your organization.

Total Monthly Cost

If we only include wages and taxes and exclude health insurance and other perks, the monthly cost of an employee in this example would be $3,360 ($20 per hour) + federal and state taxes using the 20% example $670 ($4.00 per hour) for a total of $4,032 or $24 per hour)

Purchasing a Legacy CNC

Training & Installation 

Initial setup, tooling, and training can add between $1,000 and $5,000 

Maintenance 

While machines need servicing, they don’t require sick leave or shift differentials.

Initial Cost 

A Legacy CNC will cost between $30,000 and $65,000.  This expense can be paid in full but is often financed resulting in a monthly payment between $900 and $1,200.  That comes to between $5.36 and $7.14 per hour.  This payment disappears upon completion of the finance period of 5 years. 

Ongoing Cost 

As of the most recent data (early 2025), the average cost of electricity in the United States is approximately $0.16 per kilowatt-hour (kWh) for residential customers and $0.13 per kilowatt-hour (kWh) for commercial customers. The average cost of running a Legacy CNC averages around $1.750 per hour. 

Tooling will run between $0 and $200 per month depending upon usage.  That comes out to $1.19 per hour at the high end. 

While machines need servicing, they don’t require sick leave or shift differentials.

Total Monthly Operating Cost 

When you combine the higher monthly payment of $1,200 ($7.14 per hour), electrical cost or $294 ($1.75 per hour), and tooling at $200.00 ($1.19 per hour) you get a total of $1,694 per month or $10.08 per hour.  

Conclusion 

Based on this scenario, the monthly cost of owning and operating a Legacy CNC is $1,694 for five years and then is reduced to the ongoing electrical and tooling cost of between $294 and $494 while the monthly cost of an employee starts $4,000 per month and will continue to increase over time.