In the context of planning, personnel cost planning is often neglected. This is highly confidential data about which the cost center planner may not have any information at all for each employee, but only the total for each cost element in the past. In addition, the individual cost elements - thanks to the legislator - are interlocked with each other using non-trivial calculations. The fact that the expense period and the payment period (special payments, bonuses) are not the same makes it even more complicated for cash flow planning. And so many companies take the path of least resistance and simply update the historical data with a flat-rate adjustment.
However, personnel costs represent a massive block of costs in the company - one reason why they should not be updated at a flat rate.
The task can also be solved better. The cost center managers plan jobs, and thus employees, for increases or decreases. Temporary staff, students, interns or trainees are of course also included. The personnel area (or the cost center manager, depending on how data access to salary data is regulated in the enterprise) can then use this specification by the person responsible for operations to carry out detailed planning. This is then carried out in the level of detail that provides the necessary data basis, namely at employee level.
The known salaries or wages of the employees are updated accordingly and, if necessary, adjusted in accordance with the provisions of collective or individual agreements. The standard salaries or collectively agreed values are used for future positions.
The software for your personnel cost planning should use the information provided by your operational HR system to suggest a targeted plan for the period you have specified. It should intuitively take into account future changes in the usual framework conditions, such as social security contributions or the regulations on vacation and Christmas bonuses. Individual adjustments to individual measures such as a pay adjustment, regrouping or a new hire should be able to be carried out manually during planning with the help of the software. The resulting effects on costs were to be determined automatically in the planned schedule and thus provide transparency for the result.
An essential component of personnel cost planning should also be informative reporting (reporting system) with meaningful information.
Current evaluations of header figures, RTD and costs as well as target/actual comparisons should be included as standard. Deviations from past, actual or future values must be visualized precisely in order to make the right decisions in time. The HR department must be able to generate such reports itself without having to call on IT.
Using reporting dashboards, such business users can easily perform their ad hoc analyses "out-of-the-box" and make the reports available to their departments and management.
In order to be able to calculate further personnel costs accurately, several factors must be taken into account for the planning period:
Changes to the employment contract
Regulation of remuneration (individual or lump sum)
Changes in working hours
Tariff amendments or changes
Differentiation of the different wage types
The different wage types can be grouped together, since it can quickly become confusing to take all individual wage types into account. For transfer to the income statement, they are assigned to the cost types accordingly. In the next step, the above-mentioned additional costs for personnel must be included in planning. The employer's contribution to health or pension insurance, unemployment insurance or nursing insurance is now incurred. Leave or Christmas bonuses, as well as overtime pay or weekend or night bonuses must also be integrated for the individual positions.
The total personnel costs for the planning year can now be extrapolated from this data pool. A plausibility check determines whether the personnel cost planning corresponds to reality. This is done by comparing and analyzing the calculated costs with the previous data.
Data protection is important for all these models: Salary data at employee level may only be made available to authorized persons - often this is done by setting up the personnel planning tool in a separate instance and then comparing it with the integrated planning by transferring data.
The personnel costs of a company are one of the highest items in the expenses and must be effectively planned for the year. This is the only way to ensure that the budget can be optimized and that a quick reaction can be made in case of bottlenecks or deteriorating order situation.
Personnel cost planning also offers the advantage of identifying potential savings at an early stage and, by means of reporting, provides a good overview of whether hiring additional employees is possible, necessary or not feasible.