Step 7: Add Assumptions & Drivers for Staffing Related Costs

Create Assumptions & Drivers to plan for payroll taxes, benefits & bonuses

There are many other costs related to staffing in addition to salary. For example, payroll taxes have a direct correlation to salaries and benefits have a relationship with headcount. Utilize Assumptions & Drivers to build these interdependencies and plan for these costs.

Be Aware: The examples below are common methodologies used for planning these expenses. These examples should be adapted as needed to fit your business planning requirements.

Assumptions

Assumptions are global drivers for your business that do not vary by month and do not have actuals associated with them. As such, they are especially appropriate for planning staffing related costs like Payroll Tax % as this rate does not typically change during the plan year. 

To add your Assumptions for payroll related costs, follow the steps below:

  1. Define the Assumption Table
    Setup > Assumptions > Manage Tables > Add Assumption Table and name it Payroll Assumptions
  2. Define Assumptions within the Table 
    + Add Assumption for each of the following:
  3. Populate the Assumptions in the Plan
    Plans > Assumption > Populate the table and Save
Drivers

Now that we have defined our Assumptions, we can now create associated Drivers. Drivers are formulaic expressions used to model Benefits, Payroll Tax & Bonus expenses. Steps to add Drivers for these payroll-related items are shown below from Plans > Drivers > OpEx. 

  • Payroll Taxes: Calculated as a % of Salary
    1. Locate the Payroll Tax account and select the ellipsis (. . .) to the left of the account name to activate the context menu, choose to add a % of Another Account driver and apply it to All Departments.
    2. Populate the Driver name, select the Salary account for Input, select the Assumption for Payroll Tax % for Input 2 and Save.  Be sure to select "This Department" for Input 1.
  • Bonus: Calculated as a % of Salary
    1. Locate the Bonus account and select the ellipsis (. . .) to the left of the account name to activate the context menu, choose to add a % of Another Account driver and apply it to All Departments.
    2. Populate the Driver name, select the Salary account for Input, select the Assumption for Bonus % for Input 2 and Save.  Be sure to select "This Department" for Input 1.
  • Benefits: Calculated as a $ per Headcount
    1. Locate the Benefits account and select the ellipsis (. . .) to the left of the account name to activate the context menu, choose to add an Amount per Headcount driver and apply it to All Departments.
    2. Populate the Driver name, select the Cumulative Headcount account for Input 1,  select the Assumption for Benefit $ per HC for Input 2 and Save.  Be sure to select "This Department" for Input 1.


Upon completing the addition of these drivers, you will have a fully burdened headcount forecast tied to your Staffing plan.

Helpful Hints:

  • When applying Drivers to multiple departments, use "This Department" to dynamically reference the department where the driver is being added. 

 

Continue to Step 8: Plan for Staffing Changes