Total cost to perform the HR function per FTE that performs the process group "manage employee information and analytics"

This measure calculates total cost to perform the HR function per full time equivalent (FTE) that performs the process group "manage employee information and analytics". Total cost is the sum of personnel (compensation/benefits), systems (direct and/or allocated), overhead (direct and/or allocated), other internal, and outsourced costs. The process group "manage employee information and analytics" includes [Managing the employee reporting processes, employee inquiry process, employee information and data, and the HR information systems. Create and administer the employee metrics. Develop and handle the time and attendance systems. Refurbish the indicators for employee retention and motivation.]. The Function "develop and manage human capital" includes [Delivering processes traditionally defined as "human resources". Process groups include those related to 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 process group "Manage employee information and analytics".

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure Id:
106365
Total Sample Size:
504 All Companies
Performers:
25th
Median
75th
Key Performance
Indicator:
Yes

Compute this Measure

Units for this measure are dollars.

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Total cost to perform the function "develop and manage human capital" / Number of FTEs who perform the process group "manage employee information and analytics"

Key Terms

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Process Cost Components

Total cost for a process, process group, or function consists of the following five components.

Internal/In-house operating cost consists of the first four components (personnel, systems, overhead, and other).

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.

Systems Cost

Systems costs include all expenses, paid or incurred, in conjunction with:
Computer hardware or computer software acquired by the organization or provided to the organization through service contracts.

Any related costs to process, service and maintain computer hardware or computer software. The costs of providing and maintaining services for each applicable process (e.g., computer system(s) processing (CPU) time, network/system communication charges, maintenance costs for applications and data storage). This includes the costs related to LANs, WANs, etc. This does not include one-time costs for major new systems developments/replacements. Consultant fees should not be included in depreciation of new system implementations. Include only those costs that occur more than six (6) months after implementation, as normal system maintenance costs. Any systems cost (e.g., maintenance) which is outsourced to a third party supplier should be captured in the separate cost category labeled outsourced cost.

Systems cost should include all salaries, overtime, employee benefits, bonuses or fees paid to full-time, part-time or temporary employees or independent contractors who perform services relating to computer hardware, computer software, processing or systems support.

Overhead Costs

For the purpose of this study, provide the total actual overhead costs for the year related to the specified process. These are costs that cannot be identified as a direct cost of providing a product or a service. Include the primary allocated costs such as occupancy, facilities, utilities, maintenance costs, and other major costs allocated to the consuming departments. Exclude systems costs that are allocated, since these will be captured separately as systems cost.

Other Cost

Other costs are costs associated with the specified process, but not specifically covered in personnel cost, systems cost, overhead cost and outsourced cost in this questionnaire. These other costs include costs for supplies and office equipment, travel, training and seminars. Include the cost of telephones, except for that portion captured in systems cost.

External/Outsourced Cost

In determining outsourced cost, include the total cost of outsourcing all aspects of the specified process to a third-party supplier. Exclude one-time charges for any type of restructuring or reorganization. Outsourced costs should also include costs for intracompany outsourcing (i.e., reliance on a shared services center or other business entity).

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

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.

Median

The metric value which represents the 50th percentile of a peer group. This could also be communicated as the metric value where half of the peer group sample shows lower performance than the expressed metric value or half of the peer group sample shows higher performance than the expressed metric value.

Full-time Employee, Part-time Employee, and Temporary Employee

Full-time Employee

For the purpose of this survey, a regular full-time employee is hired for an indefinite period of time and is normally scheduled to work forty hours per week. Appointment is continuous, subject to satisfactory performance and availability of funding.

Part-time Employee

For the purpose of this survey, a regular part-time employee is hired for an indefinite period of time and is scheduled to work less than forty hours per week.

Temporary Employee

A temporary employee is employed for a finite period of time, to fulfill a time-limited role, or to fill the role of a permanent employee who is absent from work. The length of time an employee can work for the organization and be considered a temporary employee may be governed by employment legislation.

Measure Scope

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Cross Industry (7.1.0)

  • 7.7.1 - Manage reporting processes (10522) - Providing information and reports regarding employees to management.
  • 7.7.2 - Manage employee inquiry process (10523) - Handling instances where an employee believes that he/she has been inappropriately treated or he/she desires clarification. Encourage employees to inquire when needed. Record and clarify the issues for which the enquiry has been made.
  • 7.7.3 - Manage and maintain employee data (10524) - Capturing and updating employee information and data and information on the employees.
  • 7.7.4 - Manage human resource information systems HRIS (10525) - Administering and maintaining HR information systems that take care of activities related to HR, accounting, management, and payroll.
  • 7.7.5 - Develop and manage employee metrics (10526) - Creating and maintaining performance metrics for employees. Create and manage a strategic system of data and statistics to accurately gauge each employee's information. Consider productivity metrics, efficiency metrics, training metrics, etc.
  • 7.7.6 - Develop and manage time and attendance systems (10527) - Developing and maintaining systems for managing the time and attendance of employees. Routinely upgrade the process and systems that track when employees start and stop work, the department where the work is performed, attendance in addition to tracking meals and breaks, the type of work performed, and the number of items produced.
  • 7.7.7 - Manage/Collect employee suggestions and perform employee research (10530) - Procuring and handling suggestions from employees, and performing research on employees. Manage and analyze the programs that help the organization to tap into employee ideas for improving the organization's processes and/or products. Use surveys, focus groups, and other data-gathering methods to find out the attitudes, opinions, and feelings of members of an organization.