Not all HR systems are built on this basis, and it is important for HR professionals to know whether a software vendor’s product has it or not.
A simplified way to describe it is that the company organisational structure and the posts within that structure are configured into the software to replicate the budgeted position, for salary, headcount and FTE.These ‘empty’ posts are then populated with the details of the current postholders, and the variables are then calculated.
Example:
Budgeted Position
Marketing Department
Actual Position
Notes:
Budgeted salary will be updated in the system each financial year or other interval.
Headcount represents the physical number of people for accommodation or compliance purposes.
FTE (Full Time Equivalent) is expressed as a fraction of hours worked or budgeted to be worked against standard working hours for the business.
Posts C and D are for three-quarters and two-thirds of the standard working hours.
Although Post C is currently vacant and therefore showing a budget surplus, costs of temporary backfill staff or overtime by existing staff need to be offset against this.
The advantage of this set-up is that it allows for more accurate reporting of the current situation at any point in time, and this type of report is essential for senior management.
