Percentage error for the personnel cost forecast

This measure calculates total personnel expense forecasting percentage error. It is calculated as the absolute value of ((Projected – Actual personnel expense) / Actual personnel expense) * 100. This Process Efficiency measure is intended to help companies minimize waste and refine resource consumption related to the process "Perform planning/budgeting/forecasting".

Benchmark Data

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Measure Category:
Process Efficiency
Measure Id:
101761
Total Sample Size:
1,938 All Companies
Performers:
25th
Median
75th
Key Performance
Indicator:
No

Compute this Measure

Units for this measure are percent.

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Percentage error for the personnel cost forecast

Key Terms

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Personnel Cost

Personnel cost is the cost associated with personnel compensation and fringe benefits of employees (i.e., those classified as FTEs which includes both full-time and salaried/hourly employees) contributing to each respective process. Personnel cost should include all of the following costs.

Employee Compensation: Includes salaries and wages, bonuses, overtime and benefits.

Fringe: Includes contributions made towards the employees' government retirement fund, workers compensation, insurance plans, savings plans, pension funds/retirement plans, and stock purchase plans. This should also include special allowances, such as relocation expenses and car allowances.

Process efficiency

Process efficiency represents how well a process converts its inputs into outputs. A process that converts 100% of the inputs into outputs without waste is more efficient than one that converts a similar amount of inputs into fewer outputs.

Measure Scope

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Cross Industry (7.3.0)

  • 9.1.1.1 - Develop and maintain budget policies and procedures (10771) - Formulating financial budgetary guidelines and strategies. Develop a framework for rules and regulations regarding budgets. Create a step-by-step process to achieve financial goals.
  • 9.1.1.2 - Prepare periodic budgets and plans (10772) - Creating reports on a quarterly or annual basis for fund allocation. Create a financial statement that estimates revenues and expenses over a specific period of time. (Leverage budget methods such as cost-based and zero-based budgeting techniques, in light of the periodic targets outlined during Develop and maintain budget policies and procedures [10771].)
  • 9.1.1.3 - Operationalize and implement plans to achieve budget (20135) - Putting budgeting plans into practical use keeping within designated forecasting parameters.
  • 9.1.1.4 - Prepare periodic financial forecasts (10773) - Creating estimates of the projected income and expenses required over a predetermined time frame. Develop the projections of profit and loss statements, balance sheets, and the cash flow forecast.
  • 9.1.1.5 - Perform variance analysis against forecasts and budgets (20136) - Conducting a quantitative analysis between what was forecasted and budgeted and actual financial behavior.