Automatically calculate specific benefits and other obligations by position

Description

This feature allows an organization to accurately assess, forecast and plan for its workforce-related expenditures. It provides detailed and precise information by automatically calculating benefits tied to each employee's position, such as health insurance, retirement contributions, bonuses, and other staff-related costs.

Example Use Case

Scenario: A medium-sized healthcare organization utilizes its CPM software to efficiently manage its workforce planning. The company has various positions, each with different sets of benefits. To ensure accuracy in workforce expenditure planning and avoid manual calculation errors, the organization implements a system that can automatically calculate specific benefits by position.

Solution: The CPM software automatically computes benefits for each position. For example, the system calculates the cost of health insurance for a researcher considered full-time, the retirement contribution for a specific management position, and the annual bonus for an executive. This automatic computation significantly reduces the risk of errors and simplifies the workforce budgeting process.

Considerations

Adding employees to a list by name or position is the simplest, most common way a CPM product will offer workforce planning. Some will simplify the planning by saying “salary + 30%” to calculate the burden. That may be okay in certain circumstances but is generally too summarized for real planning. Having the ability to select a location and have the tax burden automatically calculate is incredibly powerful. This provides a true forecast for expenses, and allows modeling of new hires based on location, benefits, and so on without the planning (usually a department head) having any particular financial skill.

Organizations that create or manipulate products often need a different model for shop floor staff that is driven by demand, not by named individuals. If this is you, make sure the vendor can offer two separate workforce models that are summed up in the forecast.

Questions to Ask a Vendor

• Automation Capabilities: How does your system handle automatic calculations of specific benefits by position? What steps are involved?
• Pre-Calculations Included: Which benefit calculations are included? Are there tables with calculation values for things like taxes, 401k contributions and so on?
• Flexibility: How easily can the system adapt to changes in company policies, benefits schemes, or job positions? What happens with underlying drivers change?