Personnel cost to perform the HR function per function FTE

This measure calculates the personnel cost to perform the function "develop and manage human capital" per full-time equivalent (FTE) that performs the function. Personnel cost refers to employee personnel compensation (salaries and wages, bonuses, overtime and benefits) and fringe benefits (e.g. contributions made towards the employees' government retirement fund, workers compensation, insurance plans, savings plans, pension funds/retirement plans, stock purchase plans, and special allowances such as relocation expenses and car allowances). These costs should describe both full-time and salaried/hourly employees contributing to the work in question. The function "develop and manage human capital" describes the work of developing and maintaining workforce strategy, recruiting employees, developing and counseling employees, managing employee relations, rewarding and retaining employees, redeploying and retiring employees, managing employee information, and managing employee communications. This Cost Effectiveness measure is intended to help companies understand this cost expenditure related to the function "develop and manage human capital".

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure Id:
106459
Total Sample Size:
1,541 All Companies
Performers:
25th
Median
75th
Key Performance
Indicator:
No

Compute this Measure

Units for this measure are dollars.

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Personnel cost to perform the function "develop and manage human capital" / Number of FTEs who perform the function "develop and manage human capital"

Key Terms

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FTE - (full-time equivalent employee)

To calculate the number of full-time equivalents employed during the year for each respective process or activity, you must prorate the number of employees and the hours spent performing each process/activity. Assume that a full-time worker represents 40 hours per week. Provide the average number of full-time equivalents employed during the year for each respective process. Include full-time employees, part-time employees, and temporary workers hired during peak demand periods. Allocate only the portion of the employee's time that relates to or supports the activities identified for an applicable process. Prorate management and secretarial time by estimating the level of effort in support of each activity, by process.

For example, a part-time secretary in the finance department for XYZ, Inc. charges all of his time to finance department activities. He works 20 hours per week. The secretary splits his time evenly supporting employees working in the general accounting process and the financial reporting process. Thus, his time should be allocated by process. So, if he works throughout the year and supports these two processes, his time would be split evenly as:

20hrs/40hrs = .5FTE * 50% for general accounting = .25FTE for general accounting

20hrs/40hrs = .5FTE * 50% for financial reporting = .25FTE for financial reporting

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.

Cost Effectiveness

Cost effectiveness measures are those in which two related variables, one of which is the cost and one of which is the related outcome related to the expenditure are used to determine a particular metric value.

Measure Scope

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Cross Industry (7.3.0)

  • 7.1 - Develop and manage human resources (HR) planning, policies, and strategies (17043)
    • 7.1.1 - Develop human resources strategy (20958)
      • 7.1.1.1 - Identify strategic HR needs (10418)
      • 7.1.1.2 - Define HR and business function roles and accountability (10419)
      • 7.1.1.3 - Determine HR function roles and structure (21430) - Establishing the roles that are required to execute the HR function. This process also examines the organizational structure required to support the organization.
      • 7.1.1.4 - Determine HR delivery model (21431) - Determining how an organization's human resources department offers services to and interacts with employees.
      • 7.1.1.5 - Determine HR costs (10420)
      • 7.1.1.6 - Establish HR measures (10421)
      • 7.1.1.7 - Communicate HR strategies (10422)
      • 7.1.1.8 - Develop strategy for HR systems/technologies/tools (10432)
      • 7.1.1.9 - Manage employer branding (20606)
      • 7.1.1.10 - Manage job families and positions (21432) - Overseeing a group of similar individual or teams with similar education, skills, training, or experience.
    • 7.1.2 - Develop and implement workforce strategy and policies (17045)
      • 7.1.2.1 - Perform workforce planning (10423)
      • 7.1.2.2 - Perform operational workforce planning (10424)
      • 7.1.2.3 - Develop compensation strategy (10425)
        • 7.1.2.3.1 - Establish incentive strategy (10210)
      • 7.1.2.4 - Develop succession plan (10426)
      • 7.1.2.5 - Develop high performers/leadership programs (16938)
      • 7.1.2.6 - Develop diversity, equity, and inclusion plan (10427)
      • 7.1.2.7 - Implement diversity, equity, and inclusion plan (21433) - Execution of diversity, equity, and inclusion plans within an organization. Often called a DEI plan.
      • 7.1.2.8 - Design talent development program (11622)
      • 7.1.2.9 - Design talent acquisition program (11623)
      • 7.1.2.10 - Develop other HR programs (10428)
      • 7.1.2.11 - Develop HR policies (10429)
      • 7.1.2.12 - Administer HR policies (10430)
      • 7.1.2.13 - Plan employee benefits (10431)
      • 7.1.2.14 - Develop workforce strategy models (10433)
      • 7.1.2.15 - Implement workforce strategy models (20122)
    • 7.1.3 - Monitor and update strategy, plans, and policies (10417)
      • 7.1.3.1 - Measure realization of objectives (10434)
      • 7.1.3.2 - Measure contribution to business strategy (10435)
      • 7.1.3.3 - Communicate plans and provide updates to stakeholders (10436)
      • 7.1.3.4 - Review and revise HR plans (10438)
    • 7.1.4 - Develop competency management models (17046)
  • 7.2 - Recruit, source, and select employees (10410)
    • 7.2.1 - Manage employee requisitions (10439)
      • 7.2.1.1 - Align staffing plan to work force plan and business unit strategies/resource needs (10445)
      • 7.2.1.2 - Develop and maintain job descriptions (10447)
      • 7.2.1.3 - Open job requisitions (10446)
      • 7.2.1.4 - Post job requisitions (10448)
      • 7.2.1.5 - Modify job requisitions (10450)
      • 7.2.1.6 - Notify hiring manager (10451)
      • 7.2.1.7 - Manage requisition dates (10452)
    • 7.2.2 - Recruit/Source candidates (10440)
      • 7.2.2.1 - Determine recruitment methods and channels (10453)
      • 7.2.2.2 - Perform recruiting activities/events (10454)
      • 7.2.2.3 - Manage recruitment vendors (10455)
      • 7.2.2.4 - Manage employee referral programs (17047)
      • 7.2.2.5 - Manage recruitment channels (17048)
    • 7.2.3 - Screen and select candidates (20123)
      • 7.2.3.1 - Identify and deploy candidate selection tools (10456)
      • 7.2.3.2 - Interview candidates (10457)
      • 7.2.3.3 - Test candidates (10458)
      • 7.2.3.4 - Select and reject candidates (10459)
    • 7.2.4 - Manage new hire/re-hire (10443)
      • 7.2.4.1 - Draw up and make offer (10463)
      • 7.2.4.2 - Negotiate offer (10464)
      • 7.2.4.3 - Hire candidate (10465)
    • 7.2.5 - Manage applicant information (10444)
      • 7.2.5.1 - Obtain candidate background information (10460)
      • 7.2.5.2 - Create applicant record (10466)
      • 7.2.5.3 - Manage/track applicant data (10467)
        • 7.2.5.3.1 - Complete position classification and level of experience (20124)
      • 7.2.5.4 - Archive and retain records of non-hires (10468)
  • 7.3 - Manage employee onboarding, training, and development (20599)
    • 7.3.1 - Manage employee orientation and deployment (10469)
      • 7.3.1.1 - Create/maintain employee onboarding program (10474)
        • 7.3.1.1.1 - Develop employee induction program (10477)
        • 7.3.1.1.2 - Maintain/Update employee induction program (10478)
      • 7.3.1.2 - Evaluate the effectiveness of the employee onboarding program (11243)
      • 7.3.1.3 - Execute onboarding program (17050)
    • 7.3.2 - Manage employee performance (10470)
      • 7.3.2.1 - Define employee performance objectives (10479)
      • 7.3.2.2 - Review employee performance (21434) - Execution of employee reviews/performance on a frequent basis.
      • 7.3.2.3 - Manage employee performance (21435) - Management of reviewing employee performance. This includes the tools that are used, the frequency of the reviews, and how the reviews are used within the organization.
      • 7.3.2.4 - Evaluate and review performance program (10481)
    • 7.3.3 - Manage employee career development (10472)
      • 7.3.3.1 - Define employee development guidelines (10487)
      • 7.3.3.2 - Develop employee career plans and career paths (10488)
      • 7.3.3.3 - Manage employee skill and competency development (17051)
    • 7.3.4 - Develop and train employees (10473)
      • 7.3.4.1 - Align employee with organization development needs (10490)
      • 7.3.4.2 - Define employee competencies and skills (16940)
      • 7.3.4.3 - Align learning programs with competencies and skills (10491)
      • 7.3.4.4 - Establish training needs by analysis of required and available skills (10492)
      • 7.3.4.5 - Develop, conduct, and manage employee and/or management training programs (10493)
      • 7.3.4.6 - Manage examinations and certifications (20125)
        • 7.3.4.6.1 - Liaise with external certification authorities (20126)
        • 7.3.4.6.2 - Administer certification tests (20127)
        • 7.3.4.6.3 - Appraise experience qualifications (20128)
        • 7.3.4.6.4 - Administer certificate issue and maintenance (20129)
      • 7.3.4.7 - Monitor and evaluate learning programs (21436) - Oversight of the organization's learning programs. This process also includes the effectiveness of these programs.
  • 7.4 - Manage employee relations (17052)
    • 7.4.1 - Manage labor relations (10483)
    • 7.4.2 - Manage collective bargaining process (10484)
    • 7.4.3 - Manage labor management partnerships (10485)
    • 7.4.4 - Manage employee grievances (10531)
    • 7.4.5 - Understand legal and regulatory environment (21437) - Awareness of the employee legislature that is in place for the organization. The regulatory environment could include areas, regions, or countries.
  • 7.5 - Reward and retain employees (10412)
    • 7.5.1 - Develop and manage reward, recognition, and motivation programs (21438)
      • 7.5.1.1 - Develop salary/compensation structure and plan (10498)
      • 7.5.1.2 - Develop benefits and rewards plan (10499)
      • 7.5.1.3 - Perform competitive analysis of benefits and rewards (10500)
      • 7.5.1.4 - Identify compensation requirements based on financial, benefits, and HR policies (10501)
      • 7.5.1.5 - Administer compensation and rewards to employees (10502)
      • 7.5.1.6 - Reward and motivate employees (10503)
      • 7.5.1.7 - Review retention and motivation indicators (10510)
      • 7.5.1.8 - Review compensation plan (10511)
    • 7.5.2 - Manage and administer benefits (10495)
      • 7.5.2.1 - Deliver employee benefits program (10504)
      • 7.5.2.2 - Administer benefit enrollment (10505)
      • 7.5.2.3 - Process claims (10506)
      • 7.5.2.4 - Perform benefit reconciliation (10507)
    • 7.5.3 - Manage employee assistance and retention (21439) - Managing activities centered around delivering programs to support work/life balance for employees; developing family support systems; reviewing retention and motivation indicators; and reviewing compensation plans.
      • 7.5.3.1 - Deliver programs to support work/life balance for employees (10508)
        • 7.5.3.1.1 - Manage flexible working (21440) - Creation and execution of a plan that might allow for work from home days, or alternate hours.
      • 7.5.3.2 - Develop family support systems (10509)
    • 7.5.4 - Administer payroll (10497)
  • 7.6 - Redeploy and retire employees (10413)
    • 7.6.1 - Manage promotion and demotion process (10512)
    • 7.6.2 - Manage separation (10513)
    • 7.6.3 - Manage retirement (10514)
    • 7.6.4 - Manage leave of absence (10515)
    • 7.6.5 - Develop and implement employee outplacement (10516)
    • 7.6.6 - Manage workforce scheduling (20132)
      • 7.6.6.1 - Receive required resources/skills and capabilities (20133)
      • 7.6.6.2 - Manage resource deployment (10517)
    • 7.6.7 - Relocate employees and manage assignments (17055)
      • 7.6.7.1 - Manage expatriates (10520)
  • 7.7 - Manage employee information and analytics (17056)
    • 7.7.1 - Manage reporting processes (10522)
    • 7.7.2 - Manage employee inquiry process (10523)
    • 7.7.3 - Manage and maintain employee data (10524)
    • 7.7.4 - Manage human resource information systems HRIS (10525)
    • 7.7.5 - Develop and manage employee measures (10526)
    • 7.7.6 - Develop and manage time and attendance systems (10527)
    • 7.7.7 - Develop workforce analytics (21441) - Understand, develop, and gather workforce data in support of stakeholder requirements.
      • 7.7.7.1 - Determine stakeholder requirements (21442) - Collect and manage requirements from various enterprise stakeholders about workforce analytics.
      • 7.7.7.2 - Identify research questions (21443) - Summarize stakeholder requirements into discrete research questions in support of workforce analytics.
      • 7.7.7.3 - Select workforce analysis methodology (21444) - Consider stakeholder requirements, research questions, and organizations standards around research to select appropriate research methodology in support of workforce analytics.
      • 7.7.7.4 - Identify workforce data sources (21445) - Identify appropriate data sources for workforce analytics data while considering organizational standards for data sources.
      • 7.7.7.5 - Gather workforce data (21446) - Collect and procure, as needed, workforce data from internal and external data sources in support of workforce analytics.
    • 7.7.8 - Implement workforce analytics (21447) - Transform, develop, and communicate workforce data into analytics in support of organizational requirements.
      • 7.7.8.1 - Transform workforce analysis data (21448) - Logically and statistically validate collected or purchased data in support of analytics needs
      • 7.7.8.2 - Develop insights into workforce analytics outcomes (21449) - Synthesize insights from workforce analytics data
      • 7.7.8.3 - Communicate workforce analysis outcomes (21450) - Summarize, package, and distribute results of workforce analysis.
    • 7.7.9 - Manage/Collect employee suggestions and perform employee research (10530)
  • 7.8 - Manage employee communication (21451) - Creating an effective plan that initiates and promotes communication and engagement among the employees and between employees and management.
    • 7.8.1 - Develop employee communication plan (10529)
    • 7.8.2 - Conduct employee engagement surveys (16944)
    • 7.8.3 - Deliver employee communications (10532)